enbridge

Enterprise Product Partners L.P., $52.25, symbol EPD on New York (Shares outstanding: 871.3 million; Market cap: $45.5 billion; www.enterpriseproducts.com), is a leading provider of natural gas and natural gas liquids processing, transportation and storage services in the U.S. and Canada. In the three months ended December 31, 2011, Enterprise’s revenue rose 20.9%, to $11.6 billion from $9.6 billion a year earlier. Earnings per share rose 148.5%, to $0.82 from $0.33. The company has seen steady growth across all of its businesses. Enterprise should process and ship more natural gas liquids (NGLs) this year, and its profit margins from these activities should increase, as well. Natural gas prices are at 10-year lows, but companies continue to increase their drilling and production....

CANADIAN PACIFIC RAILWAY LTD., $76.45, Toronto symbol CP, reported higher-than-expected earnings this week. In the three months ended March 31, 2012, the company’s earnings soared 317.6%, to $142.0 million from $34.0 million a year earlier. Earnings per share rose 310.0%, to $0.82 from $0.20, on more shares outstanding. That beat the consensus estimate of $0.75 a share. Severe winter weather and avalanches in B.C. delayed the company’s trains and depressed the year-earlier results. This was the main reason for the earnings jump....

ENBRIDGE INC. $39.42 (Toronto symbol ENB; Shares outstanding: 782.2 million; Market cap: $30.8 billion; TSINetwork Rating: Above Average; Div. yield: 2.9%; www.enbridge.com) continues to expand in the U.S. In November 2011, the company agreed to buy half of the Seaway pipeline for $1.15 billion U.S. Enterprise Product Partners LP owns the other half and operates the pipeline. Right now, Seaway pumps crude oil from Houston, Texas, to storage facilities in Cushing, Oklahoma. But the partners plan to reverse the line’s flow by mid-2012....

PLEASE NOTE: Our next Hotline will go out on Thursday, April 5, 2012. RESEARCH IN MOTION LTD., $14.63, Toronto symbol RIM, earned $418 million, or $0.80 a share, in its fiscal 2012 fourth quarter, which ended March 3, 2012 (all amounts except share price in U.S. dollars). These figures exclude a $346-million (after-tax) writedown of goodwill and a $197-million writedown of inventory of unsold BlackBerry smartphones. On this basis, RIM’s latest earnings fell short of the consensus estimate of $0.81 a share. The latest earnings are also down 55.2% from $934 million, or $1.78 a share, a year earlier....

ENBRIDGE INC. $38 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 782.3 million; Market cap: $29.7 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.enbridge.com) plans to build a new pipeline that would pump shale oil from the Bakken region of North Dakota to refineries in the U.S. and Canada. If it can sign up enough oil shippers, this new line would increase Enbridge’s capacity in the region by 67,000 barrels a day by the end of 2013. Right now, the company’s North Dakota pipelines can pump 210,000 barrels a day.

The new line would cost $650 million, which is equal to 59% of the $1.1 billion, or $1.48 a share, that Enbridge earned in 2011. However, investments like this will help it take advantage of rising oil production in North Dakota, which has quadrupled since 2005.

Enbridge is a buy.

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BCE INC. $39.64, Toronto symbol BCE, is buying Astral Media Inc. (Toronto symbols ACM.A and ACM.B). Montreal-based Astral owns 22 TV stations, 84 radio stations and several pay TV and specialty channels, such as The Movie Network, Family Channel and Teletoon. It also owns billboards and sells other outdoor advertising services in Quebec, Ontario and B.C. The purchase price is $3.4 billion, including $380 million of Astral’s debt. BCE will pay roughly 75% of this cost in cash and 25% in common shares. To put this purchase in context, BCE earned $2.4 billion, or $3.13 a share, in 2011....

ENBRIDGE INC. $38 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 782.3 million; Market cap: $29.7 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.enbridge.com) plans to build a new pipeline that would pump shale oil from the Bakken region of North Dakota to refineries in the U.S. and Canada. If it can sign up enough oil shippers, this new line would increase Enbridge’s capacity in the region by 67,000 barrels a day by the end of 2013. Right now, the company’s North Dakota pipelines can pump 210,000 barrels a day. The new line would cost $650 million, which is equal to 59% of the $1.1 billion, or $1.48 a share, that Enbridge earned in 2011. However, investments like this will help it take advantage of rising oil production in North Dakota, which has quadrupled since 2005. Enbridge is a buy.

SNC-LAVALIN GROUP INC., $40.00, Toronto symbol SNC, fell 18% this week after the company warned that its 2011 earnings will be $80 million, or 18% below its earlier forecast. In 2010, SNC earned $437.0 million, or $2.87 a share. The earnings drop is partly due to $35 million in unusual payments related to certain construction contracts. Because of the recent civil war, SNC will also write down the value of its Libyan operations, including a prison, an airport and a water treatment system, by $23 million. The company did not say if the unusual payments are connected to its Libyan projects. SNC is working with its external auditors and legal advisors to examine these payments and certain other contracts. The company still aims to report its 2011 earnings by March 30, 2012. However, the stock will likely remain under pressure until SNC clarifies the nature and extent of these payments....

LOBLAW COMPANIES $34.72 (Toronto symbol L; Shares outstanding: 281.4 million; Market cap: $9.8 billion; TSINetwork Rating: Above Average; Dividend yield: 2.4%; www.loblaw.ca) continues to make progress with its multi-year plan to streamline its supply chain and avoid product shortages. The company says that about 99% of its products are now in stock at its 1,000 supermarkets across Canada. These upgrades have helped improve Loblaw’s results: in 2011, sales gained 1.3%, to $31.3 billion from $30.8 billion in 2010. Same-store sales rose 0.9%. Earnings rose 13.9% in 2011, to $769 million, or $2.71 a share, from $675 million, or $2.38. Loblaw is a buy....

ISHARES S&P/TSX 60 INDEX FUND $17.91 (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.

Most of the stocks in the index are high-quality companies. However, as it must ensure that all sectors are represented, the fund holds a few we wouldn’t include.

The index’s top holdings are Royal Bank, 6.9%; TD Bank, 6.4%; Bank of Nova Scotia, 5.2%; Suncor Energy, 5.0%; Barrick Gold, 4.5%; Canadian Natural Resources, 4.0%; Potash Corp., 3.7%; Goldcorp, 3.6%; Bank of Montreal, 3.4%; CN Railway, 3.1%; BCE Inc., 2.9%; CIBC, 2.8%; Enbridge, 2.7%; TransCanada Corp., 2.7%; Cenovus Energy, 2.5%; and Manulife Financial, 1.9%.

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