Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendations on the stocks we profile, with a full explanation of how we arrived at our opinion. You’ll read about stocks making moves you should know about, from coverage in one of our three newsletters featuring Canadian stocks—The Successful Investor, Stock Pickers Digest and Canadian Wealth Advisor.
VERESEN (Toronto symbol VSN; www.vereseninc.com) owns pipelines, power plants and gas-processing facilities across North America.
A major holding is 50% of the Alliance gas line, which runs 3,000 kilometres between Chicago and Fort St. John, B.C.
Veresen also owns the Alberta Ethane Gathering System, 42.7% of the Aux Sable NGL plant, and the Hythe/Steeprock natural gas gathering and processing complex in the Cutbank Ridge region of Alberta and B.C.
In the quarter ended September 30, 2014, Veresen’s cash flow per share rose 4.5%, to $0.23 from $0.22.
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Dividend stocks: Safe dividend continues to yield a high 6.4% for Veresen
Veresen recently formed a joint venture with noted venture capital firm KKR & Co. LP (symbol KKR on New York) (see our recent report on KKR & Co. here).
The venture is called Veresen Midstream. The partners have just agreed to buy natural gas gathering and compression assets in northeastern B.C. from Encana and Japan’s Mitsubishi Corp. for $1 billion.
The partners will now undertake a $5-billion expansion for gas producers, including Encana. The expansion is backed by 30-year contracts that will significantly cut Veresen Midstream’s risk.
The company’s longer-term outlook is sound. The stock trades at 14.4 times Veresen’s forecast 2015 cash flow of $1.13 a share. It yields a high 6.4%, and the dividend appears safe.
Veresen is a buy recommendation of our advisory on safety-conscious investing, Canadian Wealth Advisor.
Tomorrow in our Investor Toolkit see how to achieve a “double win” with your RRSP. |
