enbridge

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....

EMERA INC. $33 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 121.8 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 4.1%; TSINetwork Rating: Average; www.emera.com) gets 70% of its revenue from Nova Scotia Power Inc., which is Nova Scotia’s main electrical-power supplier. It gets the rest comes from its interests in pipelines and power companies in the U.S. and Caribbean. Emera’s regulated businesses provide over 80% of its earnings. That gives it plenty of steady cash flows for dividends: Emera recently raised its quarterly dividend by 3.8%, to $0.3375 a share from $0.325. The new annual rate of $1.35 yields 4.1%. Emera is a buy....

ISHARES S&P/TSX 60 INDEX FUND $16.56 (Toronto symbol XIU; buy or sell through a broker; 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, it holds a few we wouldn’t include. The index’s top holdings are Royal Bank, 6.7%; TD Bank, 6.4%; Bank of Nova Scotia, 5.5%; Barrick Gold, 4.8%; Suncor Energy, 4.1%; Potash Corp., 3.9%; Goldcorp, 3.8%; Bank of Montreal, 3.7%; Canadian Natural Resources, 3.2%; CN Railway, 3.2%; BCE Inc., 3.0%, TransCanada Corp., 2.9%, CIBC, 2.9%; Enbridge, 2.6%; Cenovus Energy, 2.3% and Manulife Financial, 2.1%....

PRECISION DRILLING CORP., $9.54, Toronto symbol PD, sells contract-drilling services to oil and natural-gas producers. Precision owns 360 drilling rigs in Canada, the U.S. and Mexico. The company continues to see strong demand for its Super Series horizontal-drilling rigs. Horizontal drilling involves drilling development wells sideways or at an angle to reach isolated pockets of oil or gas, or to follow a reservoir spread out in a narrow layer. Horizontal drilling works well in situations where conventional drilling is either impossible or too expensive. This week, Precision announced that it will build eight more Super Series rigs. That brings the total number of Super Series rigs it will build this year up to 38. Precision expects to deliver 18 of these rigs in 2011, and the remaining 20 in 2012. Customers have already signed long-term contracts for these rigs. That cuts the risk of these investments....