enbridge

In next week’s Successful Investor Hotline, we’ll reveal our #1 stock pick for 2012. Don’t miss this unique opportunity to profit. CANADIAN PACIFIC RAILWAY LTD., $69.08, Toronto symbol CP, rose 4% this week on media reports that Pershing Square Capital Management, L.P. is pressuring the company to replace its current chief executive officer with Hunter Harrison, the retired CEO of rival Canadian National Railway Co. (Toronto symbol CNR). Pershing Square is an activist investment firm that is now CP’s largest shareholder. CP’s shares have gained 8.3% since October 28, 2011 when Pershing Square said that it had bought 12.2% of the company on. Pershing Square now owns 14.2% of CP....

BANK OF NOVA SCOTIA $51.85 (Toronto symbol BNS: Shares outstanding: 1.1 billion; Market cap: $57.0 billion; TSINetwork Rating: Above Average; Dividend yield: 4.0%, www.scotiabank.com) earned $5.3 billion in the year ended October 31, 2011. That’s up 21.4% from $4.3 billion in 2010. Earnings per share rose 18.2%, to $4.62 from $3.91, on more shares outstanding. Revenue rose 11.5%, to a record $17.3 billion from $15.5 billion. Strong gains at its international and wealth-management operations offset slower growth at its Canadian banking and securities-trading divisions. The bank’s 2012 earnings should rise to $4.82 a share. The stock trades at just 10.8 times that figure. The $2.08 dividend yields 4.0%. The bank paid out 44% of its earnings as dividends in fiscal 2011, which was within its target of 40% to 50%. That gives it room to raise its dividend in fiscal 2012....

Pat McKeough responds to many personal questions on specific stocks and other investing topics from the members of his Inner Circle. Every week, his comments and recommendations on a selection of the most intriguing questions of the past week go out to all Inner Circle members. And every Friday, we offer you one of the highlights from these Q&A sessions. This week, one Inner Circle member asked for an update on a pipeline firm that sometimes appears to be overshadowed by the most prominent names in the industry like TransCanada and Enbridge. Here is Pat’s reply. ...

TRANSCANADA CORP. (Toronto symbol TRP; www.transcanada.com) has agreed to reroute its proposed Keystone XL oil pipeline around an environmentally sensitive aquifer in Nebraska’s Sandhills region. The state government will work closely with TransCanada to find an acceptable route. That should speed up the environmental approval process for this Canadian stock’s biggest pipeline project....

PEMBINA PIPELINE $29.75 (Toronto symbol PPL; Shares outstanding: 167.3 million; Market cap: $5.0 billion; TSI Network Rating: Extra Risk; Dividend yield: 5.2%; www.pembina.com) owns pipeline systems with a total length of over 7,500 kilometres. These lines pump oil and gas from fields in B.C. and Alberta to refineries, or feed into major pipelines, such as the Enbridge Pipeline System. Pembina also owns the Syncrude, Horizon and Cheecham pipelines, which pump crude oil from the Alberta oil sands. In addition, the company holds a 50% stake in the Fort Saskatchewan Ethylene Storage Limited Partnership. It also owns the Cutbank Complex, a network of natural gas gathering and processing facilities. In the three months ended September 30, 2011, Pembina’s cash flow rose 57.0%, to $84.8 million, or $0.51 a share, from $54.0 million, or $0.33 a share, a year earlier. That’s because producers shipped more oil and gas through Pembina’s pipelines....

TRANSCANADA CORP. $42.88 (Toronto symbol TRP; Shares outstanding: 704.0 million; Market cap: $30.2 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%; www.transcanada.com) has agreed to reroute its proposed Keystone XL oil pipeline around an environmentally sensitive aquifer in Nebraska’s Sandhills region. The state government will work closely with TransCanada to find an acceptable route. That should speed up the environmental approval process. Keystone XL will pump oil from the Alberta oil sands through Oklahoma to refineries on the U.S. Gulf Coast. Last week, the U.S. State Department postponed a final decision on the project until 2013 to give TransCanada time to find a better route through Nebraska. This compromise makes it less likely that TransCanada will have to write off the $1.9 billion that it has already spent on the $7-billion project....

TRANSCANADA CORP., $41.57, Toronto symbol TRP, has agreed to reroute its proposed Keystone XL oil pipeline around an environmentally sensitive aquifer in Nebraska’s Sandhills region. The state government will work closely with TransCanada to find an acceptable route. That should speed up the environmental approval process. Keystone XL will pump oil from the Alberta oil sands through Oklahoma to refineries on the U.S. Gulf Coast. Last week, the U.S. State Department postponed a final decision on the project until 2013 to give TransCanada time to find a better route through Nebraska. This compromise makes it less likely that TransCanada will have to write off the $1.9 billion U.S. that it has already spent on the $7-billion U.S. project. To put these figures in context, the company’s cash flow was $2.8 billion (Canadian), or $3.97 a share, in the first nine months of 2011....

ENBRIDGE INC. $35 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 774.5 million; Market cap: $27.1 billion; Price-to-sales ratio: 1.5; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.enbridge.com) is buying 50% of a 300-megawatt wind power project northeast of Quebec City. This investment will cost Enbridge $330 million, or 25% of the $1.3 billion, or $1.75 a share, of cash flow that it reported for the first half of 2011. Wind farms are uneconomic, but operators profit from subsidies. This project has a 20-year deal to sell its power to Hydro-Quebec. Enbridge is a buy.

Enbridge continues to build new oil and gas pipelines. These are expensive projects, but the company’s regulated businesses give it lots of cash flow to keep expanding and raising its dividend. ENBRIDGE INC. $34.46 (Toronto symbol ENB; Shares outstanding: 760.0 million; Market cap: $26.2 billion; TSINetwork Rating: Above Average; Dividend yield: 2.8%; www.enbridge.com) gets 80% of its revenue by operating pipelines that pump crude oil and natural gas from western Canada to eastern Canada and the U.S. The remaining 20% mainly comes from distributing gas to two million consumers in Ontario, Quebec and parts of New York State. It’s also developing a gas distribution system in New Brunswick....

ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $19.60 (Toronto symbol XDV; buy or sell through a broker; ca.ishares.com) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of its assets. The fund’s MER is 0.50%. Its yield is 2.7%. The fund’s top holdings are CIBC, 6.6%; Bank of Montreal, 5.3%; Bonterra Energy, 5.2%; National Bank, 4.9%; TD Bank, 4.9%; Telus, 4.8%; IGM Financial, 4.3%; Enbridge, 4.2%; BCE, 4.2%; Canadian Utilities, 3.7%; and Manitoba Telecom, 3.7%. The fund holds 50.2% of its assets in financial stocks. Utilities are next, at 26.4%. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector....