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PENGROWTH ENERGY $4.49 (Toronto symbol PGF; Shares outstanding: 509.0 million; Market cap: $2.3 billion; TSINetwork Rating: Average; Dividend yield: 10.7%; www.pengrowth.com) plans to spend $770 million on upgrades to its oil and natural gas properties in 2013. That’s up 46.7% from the $525 million it probably spent in 2012.

Of this total, $300 million will go toward its Lindbergh oil sands project in Alberta. As a result, Lindbergh’s first phase will start in 2015, one year earlier than planned.

The company expects its cash flow to rise 14% in 2013, to $680 million. However, that’s 11.7% less than its spending plans. To make up the difference, Pengrowth plans to raise $700 million by selling certain properties. The cash from these sales should also help it maintain its monthly dividend of $0.04 a share. The annual rate of $0.48 yields 10.7%.

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PEYTO EXPLORATION & DEVELOPMENT CORP. $23.06 (Toronto symbol PEY; Shares outstanding: 148.5 million; Market cap: $3.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.1%; www.peyto.com) produces and explores for oil and natural gas in Alberta. Peyto’s average daily production of 46,033 barrels of oil equivalent is 89% gas and 11% oil.

In the three months ended September 30, 2012, the company’s cash flow was $0.54 a share, down 12.9% from $0.62 a share a year earlier. Lower gas prices offset a 26.5% rise in production.

The shares trade at 7.3 times Peyto’s forecast 2013 cash flow of $3.14 a share. The company’s long-term debt of $615 million is a low 18.1% of its $3.4-billion market cap.

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BONAVISTA ENERGY $13.57 (Toronto symbol BNP; Shares outstanding: 176.9 million; Market cap: $2.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.1%; www.bonavistaenergy.com) explores for oil and natural gas in Alberta, Saskatchewan and B.C. Bonavista’s production is weighted 61% to gas and 39% to oil.

In the three months ended September 30, 2012, the company’s cash flow per share fell 42.9%, to $0.48 from $0.84 a year earlier. Gas prices declined by 38.0%, to $2.56 per thousand cubic feet from $4.13. Production also dropped 8.6%, to 65,464 barrels of oil equivalent per day (including gas) from 71,636 barrels.

Bonavista has cut its monthly dividend by 41.7%, to $0.07 from $0.12. That will help the company conserve cash to invest in its exploration and development program. The new annual rate of $0.84 a share still yields a high 6.1%. As well, Bonavista will now pay out just 39% of its cash flow as dividends, so further dividend cuts are unlikely.

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PRIMARIS RETAIL REAL ESTATE INVESTMENT TRUST $27.02 (Toronto symbol PMZ.UN; Units outstanding: 97.8 million; Market cap: $2.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.7%; www.primarisreit.com) has received a friendly $28-a-share takeover bid.

The offer is from H&R REAL ESTATE INVESTMENT TRUST $23.73 (Toronto symbol HR.UN; Units outstanding: 194.2 million; Market cap: $4.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.7%; www.hr-reit.com).

The H&R bids tops the $26-a-share in-cash hostile takeover bid from a consortium led by Canadian private equity firm Kingsett Capital. This group includes RioCan REIT $26.67.

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TRANSCANADA CORP. $48.17 (Toronto symbol TRP; Shares outstanding: 705.1 million; Market cap: $34.0 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.transcanada.com) has won a contract from Progress Energy Canada to build and operate a new $5-billion, 750-kilometre pipeline that will pump natural gas from northeastern B.C.’s Montney region to Prince Rupert, B.C.

Progress is a wholly owned subsidiary of Petronas, Malaysia’s state-owned oil company. Progress plans to build a facility near Prince Rupert that will liquefy the gas and ship it by tanker to customers in Asia.

The Prince Rupert line should begin operating in 2018.

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POWERSHARES QQQ ETF $67.02 (Nasdaq symbol QQQQ; buy or sell through brokers; www.invescopowershares. com), formerly called Nasdaq 100 Trust Shares, holds stocks that represent the Nasdaq 100 Index. That index consists of the 100 largest shares on the Nasdaq exchange, based on market cap.

The Nasdaq 100 Index contains shares of companies in a number of major industries, including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain financial companies. The fund’s expenses are about 0.20% of its assets.

The index’s highest-weighted stocks are Apple, Microsoft, Qualcomm, Google, Cisco Systems, Intel, Amazon.com, Oracle Corp., Comcast Corp. and eBay.

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SPDR DOW JONES INDUSTRIAL AVERAGE ETF $138.76 (New York symbol DIA; buy or sell through brokers; www.spdrs.com) holds the 30 stocks that make up the Dow Jones Industrial Average.

The fund’s top holdings are IBM, ExxonMobil, Chevron Corp., 3M, Travelers Companies, Mc- Donald’s Corp., Johnson & Johnson, Caterpillar Inc., United Technologies and Boeing. The fund’s expenses are about 0.18% of its assets.

SPDR Dow Jones ETF is a buy.

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ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $22.24 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of its assets. The fund’s MER is 0.50%. It yields 4.2%.

The fund’s top holdings are CIBC, 6.7%; Bonterra Energy, 6.0%; National Bank, 6.0%; TD Bank, 5.5%; Bank of Montreal, 5.4%; Royal Bank, 4.4%; Telus Corp., 4.4%; Bank of Nova Scotia, 4.1%; BCE Inc., 4.1%; and IGM Financial, 3.9%.

The fund holds 51.5% of its assets in financial stocks. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector.

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ISHARES S&P/TSX 60 INDEX FUND $18.50 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets.

The index mostly consists of high-quality companies. However, as the fund must ensure that all sectors are represented, it holds a few stocks we wouldn’t include.

The index’s top holdings are Royal Bank, 7.8%; TD Bank, 6.7%; Bank of Nova Scotia, 6.0%; Suncor Energy, 4.6%; Bank of Montreal, 3.6%; CN Railway, 3.6%; Potash Corp., 3.3%; Enbridge, 3.1%; Trans- Canada Corp., 3.0%; BCE Inc., 3.0%; CIBC, 2.9%; Canadian Natural Resources, 2.9%; Barrick Gold, 2.9%; Goldcorp, 2.6%; Manulife Financial, 2.3%; Cenovus Energy, 2.2%; and Telus Corp., 1.9%.

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ENCANA CORPORATION $19.79 (Toronto symbol ECA; Shares outstanding: 735.4 million; Market cap: $14.6 billion; TSINetwork Rating: A v e r a g e ; D i v i d e n d y i e l d : 4 . 0 % ; www.encana.com) is selling its 30% stake in a proposed liquefied natural gas (LNG) terminal in Kitimat, B.C., to Chevron Corp. (New York symbol CVX).

LNG plants are not Encana’s area of expertise, so it has decided to let Chevron focus on building and operating the facility.

Chevron’s experience with similar LNG plants in Australia should help speed up the Kitimat project and let it conclude contract negotiations with Asian LNG buyers.

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INNERGEX RENEWABLE ENERGY $10.16 (Toronto symbol INE; Shares outstanding: 93.7 million; Market cap: $952.0 million; TSINetwork Rating: Extra Risk; Dividend yield 5.7%; www.innergex.com) operates 22 hydroelectric facilities, five wind farms and one solar-power plant in Quebec, Ontario, B.C. and Idaho. Innergex gets 55% of its power from hydroelectric plants. Wind farms supply 39% and solar generates 6%.

Like Algonquin, Innergex makes sure it has firm long-term power-purchase contracts in place before it makes acquisitions or starts building new facilities.

Innergex aims to keep increasing its hydroelectric and wind-power capacity; right now, it is developing or building eight projects.

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ALGONQUIN POWER & UTILITIES CORP. $7.42 (Toronto symbol AQN; Shares outstanding: 169.0 million; Market cap: $1.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.2%; www.algonquinpower.com) holds interests in 20 hydroelectric plants in Canada and the northeastern U.S. It also owns seven thermal energy facilities and five wind farms.

Algonquin’s subsidiary, Liberty Utilities, has operations in Arizona, California, Illinois, Iowa, Missouri, New Hampshire and Texas. These include 21 water-distribution and sewage-treatment plants, as well as four natural gas and two electricity distribution operations with over 257,000 customers.

Emera (Toronto symbol EMA), which is a recommendation of The Successful Investor, our conservative growth advisory, holds a 19.9% interest in Algonquin.

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IMPERIAL OIL $43.85 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $37.2 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.imperialoil.ca) reported that its earnings per share jumped 20.8% in the three months ended September 30, 2012, to $1.22 from $1.01 a year earlier.

Cash flow per share rose 18.8%, to $1.52 from $1.28, while revenue gained 4.9%, to $8.3 billion from $7.9 billion.

Maintenance shutdowns and asset sales lowered production by 3.7%, to 285,000 barrels a day. However, earnings from oil refining and distribution (52% of the total) rose 97.1%.

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CANADIAN REIT $44.81 (Toronto symbol REF.UN; Units outstanding: 68.2 million; Market cap: $3.1 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.3%; www.creit.ca) owns over 190 properties, including retail, industrial and office buildings, across Canada and in Chicago. These holdings contain over 19.3 million square feet of leasable area. The trust’s occupancy rate is 94.8%.

In the three months ended September 30, 2012, Canadian REIT’s revenue rose 13.1%, to $94.7 million from $83.7 million a year earlier. Cash flow per unit rose 11.7%, to $0.67 from $0.60.

Canadian REIT added $308.4 million of properties in the first three quarters of 2012, including two office buildings, a further investment in the Dartmouth Crossing (Atlantic Canada’s largest unenclosed mall) and the completion of several development projects. That total also included its $156.0- million purchase of a 50% interest in Calgary Place, a 575,000-square-foot office and retail complex.

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ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $34.39 (Toronto symbol AP.UN; Units outstanding: 64.0 million; Market cap: $2.2 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.0%; www.alliedpropertiesreit.com) owns 126 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 9.1 million square feet of leasable area.

Class I refers to 19th- and early-20th-century light industrial buildings that have been converted to office and retail space. They usually feature exposed beams, interior brick and hardwood floors.

The trust bought $456 million worth of properties in 2011. In the first three quarters of 2012, it added a further $300 million of acquisitions. Allied has a 92.1% occupancy rate.

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BANK OF NOVA SCOTIA $58.80 (Toronto symbol BNS: Shares outstanding: 1.2 billion; Market cap: $70.6 billion; TSINetwork Rating: Above Average; Div. yield: 3.9%, www.scotiabank.com) is the third-largest of Canada’s five big banks, with assets of $668.0 billion.

The bank earned $1.18 a share in its fiscal fourth-quarter ended October 31, 2012. That’s up 21.6% from $0.97 a share a year earlier. Revenue rose 15.1%, to $4.9 billion from $4.2 billion.

Higher demand for loans and an increase in deposits pushed up the Canadian banking division’s earnings by 14.8%. This includes the contribution of ING Direct, which Bank of Nova Scotia bought for $3.1 billion late last year. ING Direct offers a wide variety of no-fee banking services, mainly over the Internet. It has 1.8 million customers and $30 billion of deposits.

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Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific investment advice on a wide range of topics, including strategies for international stock markets. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Foreign investments can strengthen your portfolio and here are 3 ways you can do it with less risk.”...

MOTOROLA SOLUTIONS INC. (New York symbol MSI; www.motorolasolutions.com) makes specialized electronic equipment, such as bar-code scanners and radios for police and fire vehicles. It gets 69% of its revenue by selling its products to governments; the U.S. government is the company’s largest single customer, accounting for 7% of its overall revenue. Businesses supply the remaining 31% of Motorola Solutions’revenue....

BCE INC. $45 (www.bce.ca) purchased The Source chain of 700 mall-based electronic stores in 2009. This ear, it plans to open 20 new outlets. These stores give BCE a low-risk way to promote its mobile phones and TV services. Best Buy.

CANADIAN UTILITIES LTD. $74 (www.canadianutilities.com) has raised its dividend every year since 1972. The new annual rate of $1.94 a share, up 9.6% from $1.77, yields 2.6%. Buy.

ATCO LTD. $83 (www.atco.com) has raised its quarterly dividend by 14.5%, to $0.375 a share from 0.3275. The new annual rate of $1.50 yields 1.8%. The company has raised its dividend each year for the past 20 years. Moreover, at current rices, you can buy a share of ATCO for $83 and get roughly $86 worth of 52.8%-owned subsidiary Canadian Utilities (see below)....

AGRIUM INC. $114 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 149.4 million; Market cap: $17.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.8%; TSINetwork Rating: Average; www.agrium.com) has soared 60% in the past year. That’s mainly because activist investment firm Jana Partners wants Agrium to spin off its retail business as a separate company. Jana owns 6% of Agrium’s shares.

The retail division has 1,250 stores in North America, South America and Australia that sell seed, fertilizer and other products to farmers. These outlets supply 60% of Agrium’s revenue. The remaining 40% mainly comes from making fertilizers from natural gas.

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IMPERIAL OIL LTD. $44 (Toronto symbol IMO; Conservative Growth Portfolio; Resources sector; Shares outstanding: 847.6 million; Market cap: $37.3 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.1%; TSINetwork Rating: Average; www.imperialoil.ca) now estimates that the first phase of its 71%-owned Kearl oil sands project will cost $12.9 billion. That’s up 18.3% from its earlier forecast of $10.9 billion. Exxon Mobil Corp. (New York symbol XOM) owns the remaining 29% of Kearl. Exxon also owns 69.6% of Imperial.

Shipping delays and unusually cold winter weather have slowed Kearl’s development and boosted its costs. Imperial now aims to start production by the end of March 2013.

Kearl’s first phase will produce 110,000 barrels a day (Imperial’s share is 78,100 barrels) by the end of 2013. Kearl’s second phase, which will cost $8.9 billion, will add a further 78,100 barrels to Imperial’s daily production by late 2015. To put these figures in context, the company produced an average of 282,000 barrels of oil equivalent a day in 2012.

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CANADA BREAD CO. LTD. $52 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.canadabread.ca) is closing its bakeries in Grand Falls, New Brunswick, and Edmonton, Alberta. It will shift production from these facilities to other plants.

The company did not say how much these closures will save it. However, it expects to pay $6.3 million in severance and other related costs. That’s equal to 26% of the $24.2 million, or $0.95 a share, that Canada Bread earned in the three months ended September 30, 2012.

Canada Bread is still a hold.

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TRANSCONTINENTAL INC. $12 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.2 million; Market cap: $938.4 million; Price-to-sales ratio: 0.4; Dividend yield: 4.8%; TSINetwork Rating: Average; www.tctranscontinental.com) has paid an undisclosed sum for privately held Groupe Modulo, which publishes Frenchlanguage textbooks for schools and universities across Canada.

Many traditional book publishers have suffered due to rising competition from cheaper e-books. However, specialized textbooks are still highly profitable, and the purchase looks like a nice fit with Transcontinental’s current textbook business: it will expand the company’s catalogue of French-language titles to 11,000 from 8,000.

Moreover, adding Groupe Modulo’s high-quality titles would be a plus for Transcontinental if it decides to expand its own electronic-textbook business.

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