enbridge

BANK OF NOVA SCOTIA, $63.61, Toronto symbol BNS, continues to benefit from strong car loan and credit card demand in Canada, rising stock markets and an acquisition. The bank’s November 2012 purchase of ING Direct, which offers no-fee banking services over the Internet, continues to spur its growth. Bank of Nova Scotia will soon change this business’s name to Tangerine, which will let it keep using the orange colour associated with the ING Direct brand. As well, rising stock markets have increased the value of the assets the bank’s wealth management business administers. However, volatile currency exchange rates and higher costs have hurt profits at its international banking operations....

Exchange traded funds (ETFs) are set up to mirror the performance of a stock-market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index.

ETFs trade on stock exchanges, just like stocks....

In late 2012 and early 2013, Alberta’s heavy oil, or bitumen, was trading at a discount of around $40 U.S. a barrel to U.S. benchmark West Texas Intermediate (WTI) light crude. Bitumen from the oil sands is a thick, tar-like form of oil that requires more processing than regular crude. The lower price for Canadian bitumen was mostly due to a lack of pipeline and refinery capacity. As well, increased U.S. light oil production drove down the price of Alberta’s harder-to-process heavy oil. Since then, though, the discount has narrowed: earlier this month, Alberta oil sold for $19.50 U.S. a barrel less than U.S. benchmark WTI light crude....

ENBRIDGE INC. $47 (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 831.1 million; Market cap: $39.1 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www. enbridge.com) plans to expand its storage terminal near northern Alberta’s Christina Lake oil sands project, which will help it take advantage of t h i s p r o p e r t y ’ s r i s i n g production. The company will also build pipes and other infrastructure to connect the expansion with its existing pipelines. This project will cost $200 million. That’s equal to 72% of the $278 million, or $0.34 a share, that Enbridge earned in the third quarter of 2013. It expects to finish construction in the third quarter of 2015. Enbridge is a buy.

IGM FINANCIAL INC. $55 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 252.3 million; Market cap: $13.9 billion; Price-to-sales ratio: 5.3; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www. igmfinancial.com) is Canada’s largest independent mutual fund company....

POWER CORP. $29.88 (Toronto symbol POW; Shares outstanding: 411.4 million; Market cap: $12.2 billion; TSINetwork Rating: Above Average; Div. yield: 3.9%; www.powercorporation.com) is a diversified holding company. It holds its financial assets through 65.8%-owned Power Financial.

These financial assets include 68.1% of Great- West Lifeco, one of Canada’s largest life insurers (see column on page 9), and 58.7% of IGM Financial, a leading Canadian mutual fund provider.

Power Financial also owns 50% of holding company Parjointco, which holds 55.6% of Switzerland- listed Pargesa Holdings SA....

In next week’s Successful Investor Hotline, we’ll reveal our #1 stock pick for 2014. Don’t miss this unique opportunity to profit. CGI GROUP INC., $34.37, Toronto symbol GIB.A, fell 2.5% on Friday after the U.S. government said it would use another company to fix the Healthcare.gov website, which lets Americans shop for health insurance plans under the Affordable Care Act (or Obamacare). GCI is the lead contractor for the website. Since the site began operating on October 1, 2013, visitors have had trouble logging on and evaluating the various health plans. As a result, fewer users than expected have signed up....

ENBRIDGE INC. $46.57 (Toronto symbol ENB; Shares outstanding: 828.2 million; Market cap: $38.2 billion; TSINetwork Rating: Above Average; Yield: 3.0%) has won regulatory approval for its Northern Gateway pipeline.

This line would pump crude from Alberta’s oil sands to Kitimat, B.C....

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%....

ISHARES MSCI CANADA INDEX FUND $28.59 (New York symbol EWC; buy or sell through brokers; ca.ishares.com) holds the stocks in the Morgan Stanley Capital International Canada Index. The fund has a 0.49% MER.

The index’s top holdings are Royal Bank, 7.4%; TD Bank, 6.5%; Bank of Nova Scotia, 5.7%; Suncor Energy, 4.0%; CN Railway, 3.7%; Bank of Montreal, 3.5%; Manulife Financial, 2.7%; Canadian Natural Resources, 2.7%; CIBC, 2.7%; Valeant Pharmaceuticals, 2.7%; and Enbridge, 2.5%.

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