atco
A holding company is a company that owns all or a substantial part of a variety of different businesses. These businesses may be private companies, or publically traded. Holding companies may own all, or a majority or a minority, of companies in which they invest. The one thing most holding companies have in common is that they trade for less than the combined value of their holdings. This “holding company discount” is a well-known phenomenon in finance. It represents a special kind of hidden asset and potential profit for investors in holding companies. When holding companies sell assets or break themselves up into their constituent parts, much if not all of the discount may disappear. In other words, holding companies can usually sell their assets for fair market value, rather than at a discount. In addition, fair market value may turn out to be be more than analysts figured they were worth. Even without a break-up, buying a holding company at a discount to its asset value puts more assets to work for you for each dollar you invest....
ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $46 and ACO.Y [class II voting] $46; Income Portfolio, Utilities sector; Shares outstanding: 115.1 million; Market cap: $5.3 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.atco.com) owns 50% of Torngait Services, a partnership with a Labradorbased aboriginal firm.
Torngait recently won a contract to provide support services to 1,000 workers building a line that will transmit power from Labrador’s Muskrat Falls to the island of Newfoundland. Under the deal, Torngait will supply catering, laundry and janitorial services until mid-2018.
The contract is worth $40 million to $45 million; using the midpoint of that range, ATCO’s share is worth $21.25 million. That’s small next to the company’s revenue of $1.2 billion in the quarter ended December 31, 2014. However, deals like this enhance ATCO’s already strong reputation and should help it win more contracts in this region. The class I (X) non-voting shares are more liquid than the class II (Y) voting shares.
...
Torngait recently won a contract to provide support services to 1,000 workers building a line that will transmit power from Labrador’s Muskrat Falls to the island of Newfoundland. Under the deal, Torngait will supply catering, laundry and janitorial services until mid-2018.
The contract is worth $40 million to $45 million; using the midpoint of that range, ATCO’s share is worth $21.25 million. That’s small next to the company’s revenue of $1.2 billion in the quarter ended December 31, 2014. However, deals like this enhance ATCO’s already strong reputation and should help it win more contracts in this region. The class I (X) non-voting shares are more liquid than the class II (Y) voting shares.
...
MOLSON COORS CANADA INC. (Toronto symbols TPX.A $94 and TPX.B $99; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 185.9 million; Market cap: $18.4 billion; Price-to-sales ratio: 3.5; Dividend yield: 2.1%; TSINetwork Rating: Average; www.molson coors.com) has paid an undisclosed sum for Mount Shivalik Breweries, which operates two breweries in India. As a result, Molson now has three breweries in that country. The company’s brewing expertise should make Shivalik more efficient. The move will also help it launch and distribute its own brands, including Coors Light, in India. The class B shares have less voting power to elect directors than the class A shares, but they are more liquid and receive the same dividend....
EMERA INC. $43 (www.emera.com) earned $2.23 a share in 2014, up 13.8% from $1.96 in 2013. Revenue jumped 33.3%, to $3.0 billion from $2.2 billion. These gains are largely due to the company’s November 2013 purchase of three gas-fired power plants in New England for $541 million U.S. Higher earnings from its energy-trading business also contributed to the increase. In addition, Emera raised its quarterly dividend by 3.2% with the May 2015 payment, to $0.40 a share from $0.3875. The new annual rate of $1.60 yields 3.7%. Best Buy. CANADIAN UTILITIES LTD. $40 (www.canadianutilities.com) has raised its quarterly dividend by 10.3%, to $0.295 a share from $0.2675. The new annual rate of $1.18 yields 3.0%. Buy. ATCO LTD. $48 (www.atco.com) is the parent company of Canadian Utilities (see above). It recently raised its dividend by 15.1%. The new annual rate of $0.99 yields 2.1%. Best Buy....
ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $48 and ACO.Y [class II voting] $48; Income Portfolio, Utilities sector; Shares outstanding: 115.1 million; Market cap: $5.5 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.atco.com) holds 53.2% of Canadian Utilities (see left). It also owns 75.5% of ATCO Structures & Logistics, which builds temporary buildings for construction and energy exploration firms; Canadian Utilities owns the remaining 24.5%.
The drop in oil prices is hurting growth at the structures business. As a result, ATCO likely earned $3.02 a share in 2014, down 10.9% from 2013. But higher earnings from Canadian Utilities should raise its 2015 earnings to $3.39 a share, and the stock trades at 14.2 times that estimate. The $0.99 dividend yields 1.8%.
Based on current prices, you can buy an ATCO share for $48 and get roughly $51 worth of Canadian Utilities. That means you get ATCO’s structures business, which provides around 25% of its earnings, for free.
...
The drop in oil prices is hurting growth at the structures business. As a result, ATCO likely earned $3.02 a share in 2014, down 10.9% from 2013. But higher earnings from Canadian Utilities should raise its 2015 earnings to $3.39 a share, and the stock trades at 14.2 times that estimate. The $0.99 dividend yields 1.8%.
Based on current prices, you can buy an ATCO share for $48 and get roughly $51 worth of Canadian Utilities. That means you get ATCO’s structures business, which provides around 25% of its earnings, for free.
...
CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $42 and CU.X [class B voting] $42; Income Portfolio, Utilities sector; Shares outstanding: 263.3 million; Market cap: $11.1 billion; Price-to-sales ratio: 3.1; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.canadianutilities.com) distributes electricity and natural gas in Alberta and Australia. It also operates 18 power plants in Canada, Australia and the U.K. ATCO Ltd. owns 53.2% of the company.
Alberta power regulators recently selected Canadian Utilities to build and operate a new 500- kilometre transmission line between Edmonton and Fort Mc- Murray, an area where power demand could double in the next 10 years.
The company will own 80% of a joint venture that will build this project. Quanta Services (New York symbol PWR) will own the remaining 20%. Canadian Utilities’ share of the $1.43-billion cost is $1.14 billion. Construction will begin in 2017, and the new line should start up in 2019.
...
Alberta power regulators recently selected Canadian Utilities to build and operate a new 500- kilometre transmission line between Edmonton and Fort Mc- Murray, an area where power demand could double in the next 10 years.
The company will own 80% of a joint venture that will build this project. Quanta Services (New York symbol PWR) will own the remaining 20%. Canadian Utilities’ share of the $1.43-billion cost is $1.14 billion. Construction will begin in 2017, and the new line should start up in 2019.
...
Canadian Utilities and ATCO (see box) offer investors two ways to buy essentially the same businesses. We like both stocks, but income-seeking investors should pick the subsidiary, Canadian Utilities, while value seekers should buy the parent, ATCO. CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $42 and CU.X [class B voting] $42; Income Portfolio, Utilities sector; Shares outstanding: 263.3 million; Market cap: $11.1 billion; Price-to-sales ratio: 3.1; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.canadianutilities.com) distributes electricity and natural gas in Alberta and Australia. It also operates 18 power plants in Canada, Australia and the U.K. ATCO Ltd. owns 53.2% of the company....
ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $48 and ACO.Y [class II voting] $48; Income Portfolio, Utilities sector; Shares outstanding: 115.1 million; Market cap: $5.5 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.atco.com) holds 53.2% of Canadian Utilities (see left). It also owns 75.5% of ATCO Structures & Logistics, which builds temporary buildings for construction and energyexploration firms; Canadian Utilities owns the remaining 24.5%. The drop in oil prices is hurting growth at the structures business. As a result, ATCO likely earned $3.02 a share in 2014, down 10.9% from 2013. But higher earnings from Canadian Utilities should raise its 2015 earnings to $3.39 a share, and the stock trades at 14.2 times that estimate. The $0.99 dividend yields 1.8%. Based on current prices, you can buy an ATCO share for $48 and get roughly $51 worth of Canadian Utilities. That means you get ATCO’s structures business, which provides around 25% of its earnings, for free....
We still think investors will profit most—and with the least risk—by buying shares of well-established, dividend-paying stocks with strong business prospects.
These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace.
Stocks like these give investors an additional measure of safety in today’s volatile markets. And the best ones offer an attractive combination of moderate p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects.
Here are 20 stocks we think meet those criteria:
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
...
These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace.
Stocks like these give investors an additional measure of safety in today’s volatile markets. And the best ones offer an attractive combination of moderate p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects.
Here are 20 stocks we think meet those criteria:
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
...
CANADIAN PACIFIC RAILWAY LTD., $224.99, Toronto symbol CP, recently offered to merge with CSX Corp. (New York symbol CSX), the third-largest railway in the U.S. CSX has rejected the proposal. A merger would help CP ship more crude oil from producers in North Dakota’s Bakken region to refineries in the Midwest and on the U.S. east coast. It would also help CP speed up shipments, because the company would not have to transfer railcars to another railway. The combined firm would be one of North America’s largest railways. However, regulators would have likely blocked the merger or required CP and CSX to sell significant parts of their operations. Still, the prospect of a future deal adds to CP’s long-term appeal....