emera

ALGONQUIN POWER & UTILITIES CORP. $7.24 (Toronto symbol AQN; Shares outstanding: 206.3 million; Market cap: $1.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.7%; www.algonquinpower.com) has nearly tripled in size over the last two years through acquisitions.

Algonquin bought four companies in 2012 and another five in 2013....

iShares S&P/TSX Canadian Dividend Aristocrats Index Fund ETF, $24.56, symbol CDZ on Toronto (Units outstanding: 37.6 million; Market cap: $923.5 million; ca.ishares.com), seeks to replicate the performance of the S&P/TSX Canadian Dividend Aristocrats Index. The ETF’s MER is 0.66%, and it yields 3.2%. The S&P/TSX Canadian Dividend Aristocrats Index only includes stocks or trusts that have increased their dividends every year for five years—although it has changed that to include stocks or trusts that have maintained the same dividend for a maximum of two consecutive years within that five-year period. That means the index excludes a number of sound companies that pay dividends but haven’t increased them every year, such as three of Canada’s big-five bank stocks. The ETF’s top 10 holdings are AGF Management, 4.3%; AG Growth International, 3.7%; Bird Construction, 3.5%; Reitmans (Canada), 3.1%; Exchange Income Corp., 3.1%; Northern Property REIT, 2.9%; Enbridge Income Fund Holdings, 2.9%; IGM Financial, 2.5%; Laurentian Bank of Canada, 2.4%; and Emera Inc., 2.4%....

FORTIS INC., $30.12, Toronto symbol FTS, fell 4% this week after it agreed to buy UNS Energy Corp. (New York symbol UNS), which distributes electricity and natural gas to 654,000 clients in Arizona. UNS also operates power plants with a total capacity of 2,420 megawatts. These facilities get their power from coal (59%), natural gas (34%), solar (1%) and other fuels (6%). Fortis will pay $4.3 billion U.S., which includes assuming $1.8 billion U.S. of UNS’s debt. This is a big purchase for Fortis, which has a $6.4-billion (Canadian) market cap (or the value of all its outstanding shares). The company aims to complete the deal by the end of 2014. After the purchase, Fortis will pay an additional $200 million U.S. to help UNS fund its planned purchases of two gas-fired plants. That will lower its reliance on coal....

EMERA INC. $30 (www.emera.com) earned $0.29 a share before unusual items in the three months ended September 30, 2013, down 17.1% from $0.35 a year earlier. That’s mainly due to higher income taxes and maintenance costs at its main Nova Scotia Power subsidiary....

ALGONQUIN POWER & UTILITIES CORP. $6.79 (Toronto symbol AQN; Shares outstanding: 205.6 million; Market cap: $1.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.0%) has nearly tripled in size over the last year through a series of acquisitions.

Algonquin made four acquisitions in 2012, and it has completed another four so far in 2013. Most recently, it paid $140.7 million U.S. for a natural gas distributor in Georgia that serves 64,000 clients.

The company’s regulated utility businesses now provide water, electricity and natural gas to over 470,000 customers, up from 120,000 a year ago. In addition, Algonquin’s hydroelectric, thermal energy and wind facilities generate 1,100 megawatts of power, up from 460.
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EMERA INC. $30 (www.emera.com) earned $0.29 a share before unusual items in the three months ended September 30, 2013, down 17.1% from $0.35 a year earlier. That’s mainly due to higher income taxes and maintenance costs at its main Nova Scotia Power subsidiary....

ALGONQUIN POWER & UTILITIES CORP. (Toronto symbol AQN; www.algonquinpower.com) has nearly tripled in size over the last year through a series of acquisitions....

ALGONQUIN POWER & UTILITIES CORP. $6.79 (Toronto symbol AQN; Shares outstanding: 205.6 million; Market cap: $1.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.0%) has nearly tripled in size over the last year through a series of acquisitions.

Algonquin made four acquisitions in 2012, and it has completed another four so far in 2013....

EMERA INC. $29 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 132.4 million; Market cap: $3.8 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.8%; TSINetwork Rating: Average; www.emera.com) is Nova Scotia’s main power supplier. It also holds interests in electrical utilities in the U.S. and the Caribbean.

The company continues to invest in promising new projects. For example, it recently agreed to pay $541 million U.S. for three natural-gas-fired power plants in New England. Emera also plans to pay $390 million for a 34.5% stake in a power plant in Labrador. In addition, it will spend $1.5 billion to build an undersea cable that will transmit 20% of this facility’s power to Nova Scotia.

Closing a non-regulated power plant for maintenance helped cut Emera’s second-quarter earnings by 8.0%, to $42.6 million from $46.3 million a year earlier. Earnings per share fell 13.5%, to $0.32 from $0.37, on more shares outstanding. However, overall revenue still rose 1.0%, to $506.5 million from $501.3 million, thanks to colder-than-normal weather in Nova Scotia and higher power rates.
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MANITOBA TELECOM SERVICES INC., $29.00, Toronto symbol MBT, fell 11% this week after the federal government blocked its recent deal to sell its Allstream subsidiary to a private company controlled by an Egyptian billionaire. Allstream provides integrated telephone, Internet and other communication services to over 50,000 businesses across Canada, as well as government agencies. Ottawa felt that selling Allstream to a foreign investor could risk national security. Manitoba Telecom planned to contribute $130 million of the $405 million net proceeds from the sale to its underfunded employees’ pension fund. It would have also paid back $70 million of short-term loans it took out to fund recent pension contributions....