enbridge

AGRIUM INC., $94.59, Toronto symbol AGU, plans to continue expanding its retail operations after shareholders decided not to elect five nominees from activist investment firm Jana Partners to Agrium’s 12-member board of directors. The retail division has 1,220 stores in North America, South America and Australia that sell seed, fertilizer and other products to farmers. These outlets supply about 70% of Agrium’s revenue. The remaining 30% mainly comes from making fertilizers from natural gas. Jana, which owns 7.5% of Agrium’s shares, wants Agrium to spin off its retail division as a separate company. However, steady revenue streams from these stores help offset the cyclical nature of Agrium’s fertilizer operations....

ENBRIDGE INC. $46 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 806.5 million; Market cap: $37.1 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.enbridge.com) has agreed to build a 50-kilometre pipeline that will connect the Hangingstone oil sands project in Alberta to its existing pipeline system....

ENBRIDGE INC. $46.66 (Toronto symbol ENB; Shares outstanding: 806.5 million; Market cap: $37.6 billion; TSINetwork Rating: Above Average; Dividend yield: 2.7%; www.enbridge.com) gets 90% of its revenue from pipelines that pump oil and gas from western Canada to eastern Canada and the U.S.

The remaining 10% mainly comes from distributing gas to 2 million consumers in Ontario, Quebec and parts of New York State.

Enbridge is spending $27 billion on expansion projects between 2012 and 2016....

ENBRIDGE INC. $46 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 806.5 million; Market cap: $37.1 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.enbridge.com) operates pipelines that pump crude oil and natural gas from western Canada to customers in eastern Canada and the U.S. The company’s pipelines handle around 65% of all western Canadian crude oil exports.

Pipelines supply 90% of Enbridge’s revenue. The remaining 10% mainly comes from distributing gas to 2 million consumers in Ontario, Quebec, New Brunswick and New York State.

Enbridge’s revenue fell 22.7%, from $16.1 billion in 2008 to $12.5 billion in 2009, as the recession cut gas sales and prices. In 2010, the company started up the $3.5-billion Alberta Clipper pipeline, which pumps oil from Alberta to refineries in Illinois. That helped push up Enbridge’s revenue by 103.0% in 2012, to $25.3 billion.

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TECK RESOURCES LTD., $28.73, Toronto symbol TCK.B, fell 6% this week, along with other mining stocks, partly due to concerns about the outlook for prices of coal, copper and other commodities. China is a major resource consumer, and growth in the country has slowed along with its exports to Europe and the U.S. China’s inflation rate is also rising, which could make it more difficult to spur growth through stimulus spending or lower interest rates. As well, investors are concerned that Teck may buy control of privately held Iron Ore Company of Canada (IOC); Rio Tinto (New York symbol RIO) is IOC’s largest shareholder, with a 58.7% stake. This company mines and processes iron ore in Labrador City, Newfoundland. Trains then take the iron ore pellets to the port of Sept-Îles, Quebec, for shipment to steel mills around the world....

Exchange Income Corp., $28.05, symbol EIF on Toronto (Shares outstanding: 20.6 million; Market cap: $579.6 million; www.exchangeincomecorp.ca), operates in two niche businesses: aviation and specialty manufacturing. The aviation segment consists of regional airlines Perimeter Aviation, Keewatin Air, Calm Air International, Bearskin Lake Services and Custom Helicopters. The specialty manufacturing business includes Jasper Tank Ltd., Overlanders Manufacturing, Water Blast Manufacturing, Stainless Fabrication, Inc. and WesTower Communications. The company reported cash flow of $13.4 million in the latest quarter. It paid out $8.6 million, so it should be able to maintain its dividend if its cash flow remains steady. The stock yields 6.0%....

Enbridge still hopes to begin building its Northern Gateway pipeline in 2014. This $5.5-billion project would pump crude from Alberta’s oil sands to Kitimat, B.C. From there, tankers would ship the oil to customers in Asia. However, growing opposition from environmentalists and First Nations will probably prompt regulators to reject the project.

Even without Northern Gateway, Enbridge’s long-term outlook remains bright....

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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iShares S&P/TSX Canadian Dividend Aristocrats Index Fund ETF, $23.47, symbol CDZ on Toronto (Shares outstanding: 36.9 million; Market cap: $866.0 million; ca.ishares.com), seeks to replicate the performance of the S&P/TSX Canadian Dividend Aristocrats Index. The ETF’s MER is 0.60%, 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 now 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, including three of Canada’s big-five banks. The ETFs top 10 holdings are AGF Management, 6.4%; Atlantic Power, 4.6%; AG Growth International, 3.8%; Reitmans (Canada), 3.2%; Transcontinental Inc., 3.1%; Exchange Income Corp., 2.8%; IGM Financial, 2.6%; Enbridge Income Fund Holdings, 2.6%; Bird Construction, 2.3%; and Keyera Corp., 2.3%....

Most stock markets have risen lately. But as always, they remain subject to unexpected downturns. Even so, we feel the long-term outlook is for higher stock prices. One way to profit from rising markets is to add exchange traded funds (ETFs) that track major stock indexes to your portfolio. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You must pay brokerage commissions to buy and sell ETFs, but their low management fees still give them a cost advantage over most mutual funds....