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TELUS $69.31 (Toronto symbol T; Shares outstanding: 326.0 million; Market cap: $22.6 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.telus.com) will split its common shares on a 2-for-1 basis on April 16, 2013. Following the split, the company will have roughly 653.6 million common shares outstanding.

The split will make Telus’s shares more liquid. The lower trading price could also entice more investors to buy the stock.

Even without the positive impact that usually accompanies stock splits, Telus’s outlook remains bright. Demand for wireless services should continue to rise, particularly as more users upgrade from cellphones to smartphones. As well, Telus’s new Internet television service, Optik TV, is helping it compete with cable companies.
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LOBLAW COMPANIES $42.01 (Toronto symbol L; Shares outstanding: 281.8 million; Market cap: $11.8 billion; TSINetwork Rating: Above Average; Dividend yield: 2.1%; www.loblaw.ca) started selling its popular Joe Fresh clothing and accessories in its supermarkets in 2006. It has also opened 20 stand-alone Joe Fresh stores in Canada and the U.S.

Sales of Joe Fresh products should rise sharply now that J.C. Penney (New York symbol JCP) has opened Joe Fresh boutiques inside nearly 700 of its 1,100 department stores in the U.S. (J.C. Penney is a recommendation of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks.) Penney will also sell Joe Fresh products through its website.

Loblaw is a buy.
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IMPERIAL OIL $40.62 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $34.4 billion; TSINetwork Rating: Average; Dividend yield: 1.2%; www.imperialoil.ca) has completed its purchase of 50% of Celtic Exploration Ltd. from its parent company, ExxonMobil Corp. (New York symbol XOM).

Celtic owns large undeveloped shale gas deposits along the B.C.-Alberta border. These fields hold a total of 128 million barrels of oil equivalent. At the end of 2012, Imperial’s proved reserves totalled 3.6 billion barrels of oil equivalent.

The company paid $1.55 billion for its half of Celtic. That’s equal to 42% of the $3.7 billion, or $4.42 a share, that it earned in 2012.
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BCE INC. $46.60 (Toronto symbol BCE; Shares outstanding: 775.4 million; Market cap: $36.1 billion; TSINetwork Rating: Above Average; Dividend yield: 5.0%; www.bce.ca) has restructured its $3.4-billion deal to buy Astral Media (Toronto symbols ACM.A and ACM.B).

Montreal-based Astral owns 22 TV stations, 84 radio stations and several pay TV and specialty channels. It also owns billboards and sells other outdoor advertising.

In November 2012, the Canadian Radiotelevision and Telecommunications Commission (CRTC) rejected the takeover, as the purchase would have given BCE an overwhelming share of Canada’s English-language TV market.

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ISHARES DEX UNIVERSE BOND INDEX FUND $31.42 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the DEX Universe Bond Index. The 732 bonds in the portfolio have an average term to maturity of 9.78 years. The fund’s MER is 0.33%.

The bonds in the index are 68.2% government and 31.8% corporate.

The fund yields 3.2%, compared to the Short-Term Bond Fund’s 2.8%. Its yield to maturity is 2.24%, 0.78% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.
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ISHARES DEX SHORT-TERM BOND INDEX FUND $28.91 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through brokers) mirrors the performance of the DEX Short-Term Bond Index.

This index consists of a wide range of investmentgrade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 347 bonds with an average term to maturity of 2.87 years. The bonds in the index are 63.4% government and 36.6% corporate. The fund’s MER is 0.28%.

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BANK OF NOVA SCOTIA $58.08 (Toronto symbol BNS: Shares outstanding: 1.2 billion; Market cap: $69.7 billion; TSINetwork Rating: Above Average; Dividend yield: 4.1%, www.scotiabank.com) has received approval from the Chinese government to buy 33% of a joint venture that will offer wealth management services in that country.

This business’s long-term outlook is bright, because rising prosperity in China is giving its citizens more money to invest. Bank of Nova Scotia’s experience selling wealth management services in other parts of Asia should also make this venture more profitable.

The bank is still waiting for approval for its September 2011 deal to buy 19.99% of the Bank of Guangzhou; the Chinese government owns the remaining 80.01%. Bank of Nova Scotia will pay $719 million for this stake.
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GUGGENHEIM CHINA SMALL CAP ETF $22.80 (New York Exchange symbol HAO; buy or sell through brokers; www.guggenheimfunds.com) aims to track the AlphaShares China Small Cap Index, which is made up of all Chinese stocks that are legal for foreign investors and have market caps between $200 million and $1.5 billion.

The $266.7-millon fund’s top holdings are Youku Tudou, 1.3%; Sino Biopharmaceutical, 1.2%; China Resources Gas Group, 1.2%, Air China, 1.1%; Tsingtao Brewery Co., 1.1%; Guangzhou R&F Properties, 1.0%; BYD Co., 1.0%; Nine Dragons Paper Holdings, 1.0%; China Everbright International, 1.0%; and China Communications Services Corp., 1.0%.

As China’s economy matures and wages rise, domestic spending should continue to increase. As well, China’s leaders will likely need to spend more on programs to ease the growing gap between the rich and poor. Guggenheim China Small Cap ETF is well positioned to benefit from both of these trends.
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SPDR S&P CHINA ETF $68.23 (New York Exchange symbol GXC; buy or sell through brokers; www.spdrs.com) is an ETF that aims to track the S&P China BMI Index, which is made up of all publicly traded Chinese stocks that are available to foreign investors. Right now, SPDR S&P China ETF holds 184 stocks.

The $1.1-billion fund’s top holdings are China Construction Bank, 7.9%; China Mobile, 6.7%; Industrial & Commercial Bank, 6.2%; Tencent Holdings, 4.1%; Bank of China, 4.0%; CNOOC Ltd., 3.9%; PetroChina, 3.5%; Baidu, 2.9%; China Petroleum & Chemical, 2.5%; and China Life, 2.5%;

The fund’s breakdown by industry is as follows: Financials, 34.9%; Oil and Gas, 14.0%; Information Technology, 11.4%; Industrials, 9.2%; Telecommunication Services, 8.6%; Consumer Discretionary, 6.2%; Consumer Staples, 5.6%; Basic Materials, 4.8%; Utilities, 3.2%; and Health Care, 2.1%.
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TORSTAR $7.26 (Toronto symbol TS.B; Shares outstanding: 79.7 million; Market cap: $578.6 million; TSINetwork Rating: Above Average; Dividend yield: 7.2%; www.torstar.com) reports that its revenue fell 4.1% in 2012, to $1.49 billion from $1.55 billion in 2011. Before onetime items, earnings per share fell 25.0%, to $1.35 from $1.80.

Torstar continues to struggle with falling newspaper ad sales. Strong competition and unfavourable foreign exchange rates are also hurting profits at Harlequin Enterprises, the world’s leading romance novel publisher.

To improve its profitability, Torstar continues to cut jobs and sell surplus real estate. The company also plans to start charging users to access its websites.
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ISHARES MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND $24.07 (New York symbol ESR; buy or sell through brokers), is an ETF that aims to track the MSCI Emerging Markets Eastern Europe Index. The fund’s geographic breakdown is as follows: Russia, 75.4%; Poland, 18.4%; Czech Republic, 3.2%; and Hungary, 2.6%.

The fund’s top holdings are Gazprom (Russia: gas utility), 15.4%; Sberbank (Russia: bank), 11.5%; Lukoil (Russia: oil), 11.1%; Magnit OJSC (Russia: retailing), 4.0%; Mobile TeleSystems (Russia: wireless), 3.6%; Novatek (Russia: natural gas), 3.3%; Uralkali (Russia: potash), 3.3%; Rosneft Oil Company (Russia: oil and gas), 3.3%; Tafneft (Russia: oil and gas), 3.2%; and PKO Bank Polski SA (Poland: banking), 3.1%.

iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.69%.
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ISHARES S&P INDIA NIFTY 50 INDEX FUND $23.61 (Nasdaq symbol INDY; buy or sell through brokers; us.ishares.com) is an ETF that aims to track the S&P CNX Nifty Index, which represents the 50 largest, most liquid Indian securities.

The fund’s top holdings are ITC Ltd. (conglomerate), 9.3%; Infosys Technologies (software), 7.6%; Housing Development Finance, 7.1%; Reliance Industries Ltd. (conglomerate), 7.0%; ICICI Bank, 6.7%; HDFC Bank, 6.4%; Tata Consultancy Services (information technology), 4.4%; Larsen & Toubro Ltd. (conglomerate), 4.1%; Oil & Natural Gas Corp., 3.0%; and State Bank of India, 3.0%.

The fund’s industry breakdown includes Banks, 20.4%; Computers, 14.5%; Cigarettes, 9.3%; Refineries, 7.5%; Housing, 7.1%; Pharmaceuticals, 5.3%; Engineering, 4.1%; Oil Exploration and Production, 3.9%; Automobiles, 3.1%; and Utilities, 2.8%; The ETF has a 0.92% expense ratio.
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PENGROWTH ENERGY $4.98 (Toronto symbol PGF; Shares outstanding: 512.6 million; Market cap: $2.6 billion; TSINetwork Rating: Average; Dividend yield: 9.6%; www.pengrowth.com) produced 85,748 barrels of oil equivalent a day (60% natural gas and 40% oil) in 2012. That’s up 15.9% from 73,973 barrels in 2011.

The stock is down 47% in the past year. That’s because investors are concerned that low gas prices and Pengrowth’s high debt ($1.8 billion, or 69% of its market cap) will force it to cut its $0.04-a-share monthly dividend, for a 9.6% annualized yield.

However, Pengrowth’s rising oil production will cut its risk. This includes its Lindbergh oil sands project, which is now under construction. Moreover, the company has $4.5 billion of tax pools that it can use to cut its tax bill until 2017.
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ENBRIDGE INC. $46.66 (Toronto symbol ENB; Shares outstanding: 806.5 million; Market cap: $37.6 billion; TSINetwork Rating: Above Average; Dividend yield: 2.7%; www.enbridge.com) gets 90% of its revenue from pipelines that pump oil and gas from western Canada to eastern Canada and the U.S.

The remaining 10% mainly comes from distributing gas to 2 million consumers in Ontario, Quebec and parts of New York State.

Enbridge is spending $27 billion on expansion projects between 2012 and 2016. This excludes the controversial $5.5-billion Northern Gateway pipeline—but it includes a $6.2-billion plan to build pipelines and rail links to move oil from the Bakken region of North Dakota and Saskatchewan, as well as $5.8 billion of new lines to pump more oil from western Canada to the Gulf Coast.
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MCKESSON CORP. (New York symbol MCK; www.mckesson.com) is the largest wholesale drug distributor in the U.S. and Canada. It also owns 49% of Mexico’s largest drug distributor. McKesson’s clients include 40,000 pharmacies, as well as doctor’s offices, hospitals and clinics. It also sells surgical tools and health and beauty products....

CANADIAN PACIFIC RAILWAY $122.51 (Toronto symbol CP; Shares outstanding: 174.2 million; Market cap: $21.3 billion; TSINetwork Rating: Above Average; Dividend yield: 1.1%; www.cpr.ca), transports freight between Montreal and Vancouver and connects with hubs in the U.S. midwest and northeast.

In the quarter ended December 31, 2012, CP’s revenue rose 6.7%, to $1.50 billion from $1.41 billion a year earlier. Earnings rose 17.9%, to $224 million, or $1.28 a share, from $190 million, or $1.11.

CP’s operating ratio improved to 74.3% in the latest quarter from 78.5% a year ago. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.) The company shipped more goods and made better use of its assets in the latest quarter. CEO Hunter Harrison feels he can cut CP’s operating ratio to as low as 65% by 2016.
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ENCANA CORP. $18.66 (Toronto symbol ECA; Shares outstanding: 736.3 million; Market cap: $13.7 billion; TSINetwork Rating: Average; Dividend yield: 4.4%; www.encana.com) is one of North America’s largest natural gas producers. Its proven reserves should last over 11 years.

In the three months ended December 31, 2012, Encana’s cash flow per share fell 17.3%, to $1.10 from $1.33 a year earlier (all amounts except share price and market cap in U.S. dollars).

Natural gas accounts for 95% of Encana’s production. In response to lower gas prices, the company cut its output by 14.8% during the quarter, to 2.9 billion cubic feet per day from 3.5 billion; this was the main reason for the lower cash flow.
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CENOVUS ENERGY $30.90 (Toronto symbol CVE; Shares outstanding: 755.0 million; Market cap: $23.3 billion; TSINetwork Rating: Average; Dividend yield: 3.1%; www.cenovus.com) has three heavy oil projects in Alberta and one in Saskatchewan. The oil sands supply about half of its output. The other half is conventional oil and gas.

U.S.-based ConocoPhillips (New York symbol COP) owns 50% of Cenovus’s main Foster Creek and Christina Lake oil sands projects. Cenovus ships the heavy bitumen from these assets to refineries in Illinois and Texas, which are also 50% owned by ConocoPhillips.

In the quarter ended December 31, 2012, cash flow per share fell 17.8%, to $0.92 from $1.12 a year earlier. Expansion pushed up oil output by 23.1%, to 177,646 barrels a day from 144,273, but that was offset by lower prices. Cenovus aims to boost its production to 500,000 barrels a day by 2021.
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RUSSEL METALS (Toronto symbol RUS; www.russelmetals.com) is one of North America’s largest metal distributors. It serves its 39,000 clients through 54 locations in Canada and 12 in the U.S. In the three months ended December 31, 2012, Russel’s revenue rose 7.6%, to $765.9 million from $711.6 million a year earlier....

BLACKBERRY INC. $15 (www.blackberry.com) plans to shut down BBM Music, a music-streaming service for the company’s BlackBerry smartphones. The company’s new phones, which run on the BlackBerry 10 operating system, do not offer this service, so cancelling it will have little impact on future sales. Hold.

BOMBARDIER INC. $4.13 (www.bombardier.com) has won a $440-million U.S. contract to design high-speed railcar components for a German rail operator. The company will also help build these trains. It did not say when it would begin deliveries, but the deal is equal to 3% of its 2012 revenue of $16.8 billion U.S....

PENGROWTH ENERGY CORP. $5.16 (www.pengrowth.com) has completed the sale of its 10.02% stake in the Weyburn oil project in Saskatchewan. It received $316.0 million, which is equal to 59% of its 2012 cash flow of $538.8 million, or $1.20 a share. The company used the cash to pay down its long-term debt....

GREAT-WEST LIFECO INC. $27 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 950.6 million; Market cap: $25.7 billion; Price-to-sales ratio: 0.8; Dividend Yield: 4.6%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is Canada’s secondlargest insurance company after Manulife, with $545.8 billion of assets under administration. It also sells mutual funds and retirement planning and wealth management services. Power Financial Corp. (Toronto symbol PFC) owns 68.2% of Great-West.

Revenue fell 11.9%, from $33.9 billion in 2008 to $29.9 billion in 2011. That’s partly because low interest rates have cut the interest income the company earns on its investment portfolio. However, revenue rose 0.5%, to $30.1 billion, in 2012.


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SHAWCOR LTD. $41 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 58.8 million; Market cap: $2.4 billion; Price-to-sales ratio: 1.9; Dividend yield: 1.0%; TSINetwork Rating: Average; www.shawcor.com) has completed its plan to convert its class A (one vote per share) and class B (10 votes per share) shares into a single class of common shares (one vote per share).

Under the plan, each class A share became one common share. Class B shareholders had the option of receiving 1.1 common shares or $43.43 in cash for each share they held (the company capped the cash portion at 90% of the total compensation). ShawCor will also pay a special dividend of $1.00 a share to all shareholders on April 19, 2013.

The total cost of buying back the class B shares and the special dividend is roughly $580 million. To help pay for this, ShawCor has borrowed $350 million U.S. That pushed up its total debt to $368 million (Canadian), which is still a low 15% of its market cap.
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RIOCAN REAL ESTATE INVESTMENT TRUST $28 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 300.8 million; Market cap: $8.4 billion; Price-to-sales ratio: 4.9; Dividend yield: 5.0%; TSINetwork Rating: Average; www.riocan.com) has teamed up with Allied Properties Real Estate Investment Trust (Toronto symbol AP.UN) and privately held Diamond Corp. to buy a second property in downtown Toronto. In December 2012, the partners acquired a larger, adjacent building. They plan to redevelop these two holdings into a single retail-office complex.

As before, RioCan and Allied will each own 40%, while Diamond will own 20%. RioCan’s share of this latest purchase is $14.9 million. To put that in context, its cash flow was $116 million, or $0.39 a unit, in the fourth quarter of 2012.

RioCan is a buy....