Pat McKeough

A professional investment analyst for more than 30 years, Pat has developed a stock-selection technique that has proven reliable in both bull and bear markets. His proprietary ValuVesting System™ focuses on stocks that provide exceptional quality at relatively low prices. Many savvy investors and industry leaders consider it the most powerful stock-picking method ever created.

As early as 1980, Pat was recognized as #1 in the world of published investment advice by the Washington, DC–based Newsletter Publishers Association, and he was the first multi-year winner of The Globe and Mail’s stock picking contest.

Both CBS MarketWatch and The Hulbert Financial Digest recognized Pat as one of North America’s top stock analysts. The Wall Street Journal called him “one of only four investment newsletter advisors who have managed to serve their readers well over the long haul.”

A best-selling Canadian author, he wrote Riding the Bull, his 1993 book that predicted the stock-market boom of the last half of that decade. Through his many television appearances, he is well-known to investors for his insightful analysis and his candid, unpretentious style.

Bottom line: Pat’s conservative, reduced-risk strategy is a proven approach to safe investing.

Posts by the author
A conservative, step-by-step Canadian guide: account choice, W-8BEN, FX cost cuts, first trade, and DRIP, built for steady dividend income.
CANADIAN PACIFIC RAILWAY LTD. $231.77 (Toronto symbol CP; Shares outstanding: 171.0 million; Market cap: $39.4 billion; TSINetwork Rating: Average; Dividend yield: 0.6%; www.cpr.ca) has agreed to form a 50/50 joint venture with DREAM Unlimited Corp., Toronto symbol DRM.

This new business—called DREAM Van Horne Properties—will redevelop several of CP’s real estate holdings, helping the company unlock some of their hidden value.

These assets include 75-acre Schiller Park in Chicago; Obico, a 74-acre site near Toronto; the 92-acre South Edmonton Yard, close to downtown Edmonton; and Lucien L’allier, a three-acre site in Montreal.

...
IBM $156.96 (New York symbol IBM; Shares outstanding: 989.7 million; Market cap: $157.0 billion; TSINetwork Rating: Above Average; Dividend yield: 2.8%; www.ibm.com) reported better-than-expected earnings in the latest quarter, but that was mainly due to cost cuts, as demand for the company’s mainframes and computer services has weakened.

In the three months ended December 31, 2014, IBM’s per-share earnings fell 5.7%, to $5.81 from $6.16. That beat the consensus estimate of $5.41.

Revenue fell 11.9%, to $24.1 billion from $27.4 billion, missing the consensus estimate of $24.8 billion. If you adjust for foreign exchange rates and the sale of the company’s server business, revenue declined by 2%.

...
PENGROWTH ENERGY $4.01 (Toronto symbol PGF; Shares outstanding: 530.1 million; Market cap: $2.2 billion; TSINetwork Rating: Average; Dividend yield: 6.0%; www.pengrowth.com) has cut its capital spending plans and dividend to conserve cash in the face of falling oil prices.

Capital spending will drop 74.0%, to $200 million from $770 million in 2014. The company is also cutting its monthly dividend by 50.0%, from $0.04 a share to $0.02. The new rate still yields a high 6.0%.

Pengrowth is still a buy.

...
IMPERIAL OIL $49.56 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $43.0 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.imperialoil.ca) owns roughly 500 of the 1,700 Esso gas stations in Canada.

The company is considering selling its companyowned stations to independent operators. It’s likely that it would only sell to buyers who agree to purchase their fuel from Imperial and keep using the Esso brand.

Imperial is also looking at options to spur growth at its On the Run convenience stores. It may sell them outright or set them up as franchises.

...
POWER CORP. $31.38 (Toronto symbol POW; Shares outstanding: 412.6 million; Market cap: $15.1 billion; TSINetwork Rating: Above Average; Divd. yield: 3.7%; www.powercorporation.com) is a diversified holding company. It holds its financial assets through 65.7%-owned Power Financial.

These financial assets include 68.1% of Great- West Lifeco, one of Canada’s largest life insurers, and 58.7% of IGM Financial, a leading Canadian mutual fund provider.

Power Financial also owns 50% of holding company Parjointco, which holds 55.5% of Switzerland- listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European companies: Imerys (minerals), Total SA (oil), Pernod Ricard (wine and spirits), SGS (inspection, testing and certification services) and Lafarge (cement and building materials). Power Corp. also has investments in Asia.

...
ENBRIDGE INC. $62.78 (Toronto symbol ENB; Shares outstanding: 848.8 million; Market cap: $53.5 billion; TSINetwork Rating: Above Average; Divd. yield: 3.0%; www.enbridge.com) has won a contract to build an underwater pipeline that will pump crude oil from a new platform in the Gulf of Mexico to an existing pipeline network.

This deal is worth $130 million, which is small next to the $8.3 billion of revenue the company reported for the three months ended September 30, 2014.

However, deals like this enhance Enbridge’s already strong reputation in the region; its pipelines already carry about 40% of the natural gas produced in the Gulf’s deeper areas. The new line should start up in 2018.

...
INNERGEX RENEWABLE ENERGY $11.91 (Toronto symbol INE; Shares outstanding: 100.7 million; Market cap: $1.2 billion; TSINetwork Rating: Extra Risk; Dividend yield 5.0%; www.innergex.com) operates 26 hydroelectric plants, six wind farms and one solar power facility in Quebec, Ontario, B.C. and Idaho. The company gets 73% of its power from hydroelectric plants. Wind supplies 26% and solar generates 1%. In contrast to Algonquin, Innergex is growing slowly, mostly by building its own hydroelectric and wind facilities, rather than through acquisitions. Right now, the company has five projects under construction.

But like Algonquin, Innergex makes sure it has firm long-term power-purchase contracts in place before it starts building new plants.

...
ALGONQUIN POWER & UTILITIES CORP. $10.41 (Toronto symbol AQN; Shares outstanding: 238.1 million; Market cap: $2.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.8%; www.algonquinpower.com) has nearly tripled in size over the past three years through acquisitions. Now it’s expanding further with new purchases.

The most recent was late last year, when Algonquin paid $327 million U.S. for Park Water, owner of three regulated water utilities with 74,000 customers in California and Montana.

Algonquin’s regulated utility businesses now provide water, electricity and natural gas to over 488,000 customers, up sharply from 120,000 three years ago. In addition, its hydroelectric, thermal energy, solar and wind facilities generate 1,150 megawatts, up from 460.

...
CENOVUS ENERGY $25.04 (Toronto symbol CVE; Shares outstanding: 757.1 million; Market cap: $19.4 billion; TSINetwork Rating: Average; Dividend yield: 4.3%; www.cenovus.com) has cut its capital spending plans for the second time in two months due to lower oil prices.

The company now expects to spend $1.8 billion to $2.0 billion in 2015, down from $2.5 billion to $2.7 billion in its earlier plan (and down from an estimated $3.1 billion in 2014). As part of these cuts, it will suspend drilling for conventional oil in Alberta and Saskatchewan, and defer some oil sands work.

Cenovus now expects its cash flow for the year to fall by roughly half, to $1.4 billion, or $1.85 a share. That could prompt the company to cut its $1.065-a-share dividend, which yields 4.3%. Cenovus’s dividend payments total $800 million a year.

...