enbridge

U.S. Geothermal, $0.42, symbol HTM on New York (Shares outstanding: 102.1 million; Market cap: $42.4 million; www.usgeothermal.com), is in the renewable energy business. The company acquires and develops geothermal systems in the western U.S. Geothermal energy is the natural heat energy stored in the earth’s crust. In some areas, geothermal energy is commercially viable and can be converted into electricity. U.S. Geothermal operates three power plants; Neal Hot Springs in Oregon (20% of which it just sold to Enbridge) Raft River Unit I in Idaho and a facility in Nevada’s San Emidio Desert....

Macro Enterprises, $6.42, symbol MCR on Toronto (Shares outstanding: 29.1 million; Market cap: $185.7 million; www.macroenterprises.ca), is a Calgary-based company that builds and maintains pipelines and other facilities. Its clients include Enbridge, Talisman, TransCanada, Cenovus, Nexen, Spectra, AltaGas and Pembina. In the three months ended June 30, 2013, Macro’s revenue rose 34.1%, to $37.3 million from $27.8 million a year earlier. Earnings per share rose sharply, to $0.21 from $0.11. The company holds cash of $9.4 million, or $0.32 a share. Its $14.2 million of debt is a low 7.6% of its $185.7-million market cap....

SNC-LAVALIN GROUP INC., $44.62, Toronto symbol SNC, rose 8% this week after it said that it plans to sell all or part of AltaLink, which provides electricity to 85% of Alberta’s population through 12,000 kilometres of power lines and 280 substations. SNC could also spin off AltaLink as a separate publicly traded firm. The company did not say when it expects to complete this process. As of June 30, 2013, AltaLink’s net book value was $856.8 million. That’s equal to 13% of SNC’s $6.8-billion market cap (or the value of all its outstanding shares). The sale is part of SNC’s plan to sell some of its less important operations. The company will invest the cash from these sales in engineering projects in areas with strong potential, such as mining, water treatment and oil and gas....

ENBRIDGE INC. $42.55 (Toronto symbol ENB; Shares outstanding: 825.7 million; Market cap: $35.0 billion; TSINetwork Rating: Above Average; Yield: 3.0%) invested $23.8 million in 2010 for a 20% interest in the 35-megawatt Neal Hot Springs facility in Oregon, which was then under construction....

ENBRIDGE INC. $42 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 1.0 billion; Market cap: $42.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.enbridge.com) has opened its first geothermal power plant. This facility, which is located near Vale, Oregon, taps into heat from the earth’s core to generate electricity.

Enbridge paid $23.8 million for a 20% stake in this plant. U.S. Geothermal Inc. (New York symbol HTM) owns the other 80%.

Power from geothermal plants is much more reliable than solar and wind projects. That cuts the risk of this investment. As well, the plant has a 25-year deal to sell its electricity to Idaho’s power grid.
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VERESEN $11.74 (Toronto symbol VSN; Shares outstanding: 199.9 million; Market cap: $2.4 billion; TSINetwork Rating: Average; Yield: 8.5%) owns pipelines, power plants and gas-processing facilities across North America. A major holding is 50% of the Alliance gas line, which runs 3,000 kilometres between Chicago and Fort St. John, B.C. Enbridge owns the other 50%. Veresen also owns the Alberta Ethane Gathering System, and Veresen and Enbridge together hold 85.4% of the Aux Sable NGL plant.

In February 2012, Veresen paid Encana Corp. $920 million for the Hythe/Steeprock natural gas gathering and processing complex. Encana signed a long-term deal to buy most of this facility’s gas.

To diversify beyond pipelines and gas-processing plants, Veresen continues to expand its power generation business. This includes hydroelectric facilities, wind farms, natural gas fired plants and waste-heat facilities.
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BLACKBERRY LTD., $8.28, Toronto symbol BB, has accepted a $9.00 U.S.-a-share takeover offer from a consortium led by Fairfax Financial Holdings (Toronto symbol FFH). Fairfax is the smartphone maker’s largest investor, with roughly 10% of its outstanding shares. This tentative agreement gives BlackBerry until November 4, 2013, to secure a better deal. It will also give Fairfax and its potential partners time to examine BlackBerry’s financial condition. If BlackBerry accepts a rival offer, it will have to pay a $157.2-million U.S. break fee to Fairfax. That fee would rise to around $262 million U.S. if the company signs a binding deal with Fairfax and does not go through with it. However, Fairfax would not have to pay a fee if it cancels the deal....

ENBRIDGE INC. $42 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 1.0 billion; Market cap: $42.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.enbridge.com) has opened its first geothermal power plant....

Growth by acquisition can be risky, as newly purchased companies may develop unforeseen problems, especially in an unsettled economy. But Pembina lowered that risk with last year’s purchase of a rival in a business where it’s already a leader. Meanwhile, Veresen aims to add power plants with long-term contracts already in place.

PEMBINA PIPELINE $32.36 (Toronto symbol PPL; Shares outstanding: 310.3 million; Market cap: $10.1 billion; TSINetwork Rating: Average; Div....

BCE INC. $44.58 (Toronto symbol BCE; Shares outstanding: 775.9 million; Market cap: $34.8 billion; TSINetwork Rating: Above Average; Yield: 5.2%; www.bce.ca) has gained in response to U.S.-based Verizon Communications’ (New York symbol VZ) announcement that it will not enter the Canadian wireless market right now (see box below).

BCE is Canada’s second-largest wireless carrier, with 7.72 million subscribers....