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Consumers may grumble, but these oligopolies are great for investors

www.theglobeandmail.com Consumers may grumble, but these oligopolies are great for investors

Introducing the top stocks in sectors with limited competition

Consumers may grumble, but these oligopolies are great for investors

Canada: three oligopolies in a trenchcoat.

Bank service charges and overdraft fees can infuriate consumers, and more choices could lower their temperature.

From the perspective of investors, though, Canada’s cozy network of oligopolies – in which a few players dominate one sector – can look very different. Slim competition can keep upstarts out and profits in, driving strong shareholder returns and attractive dividends over the long term.

“We have a handful of oligopolies that are able to fend off new entrants (whether regional or foreign) without needing to destroy profits for an extended period of time, or where we need a government financed solution,” Ian de Verteuil, head of portfolio strategy at CIBC Capital Markets, said in an e-mail.

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