enbridge

PowerShares Canadian Dividend Index ETF, $18.44, symbol PDC on Toronto (Shares outstanding: 250,000; Market cap: $4.6 million; www.investco.ca), aims to replicate the performance of the Indxis Select Canadian Dividend Index. PowerShares Canadian Dividend Index ETF was launched on June 16, 2011. The units began trading at $20. However, the fund duplicates the PowerShares Canadian Dividend Index mutual fund, which started up in November 2009. The fund holds 35 stocks, eight real estate investment trusts (REITs) and two income trusts. It has an expense ratio of 0.50%, and yields 3.6%. Its top 10 holdings are Royal Bank, 10.0%; TD Bank, 10.0%, Bank of Nova Scotia, 9.7%; Bank of Montreal, 7.4%; CIBC, 5.6%; TransCanada Corp., 5.4%; Thomson Reuters, 5.2%; Enbridge, 4.6%; Great-West Lifeco, 4.4%; and Power Financial, 3.9%....

TORONTO-DOMINION BANK, $71.10, Toronto symbol TD, has agreed to buy MBNA’s Canadian credit card operations from Bank of America (New York symbol BAC). This purchase will add 1.8 million customers to TD’s roughly 4.0 million credit-card accounts. MBNA is also the largest issuer of MasterCard cards in Canada, which will diversify TD’s Visa cards. TD will pay $8.5 billion for MBNA’s Canadian credit-card operations when the deal closes, probably early next year. To put that in context, TD earned $5.2 billion, or $5.77 a share, in its 2010 fiscal year, which ended October 31, 2010....

Both TransCanada and Enbridge are building new oil pipelines. These are expensive projects, but the companies’ regulated businesses give them lots of cash flow for expansion and continued dividend increases. TRANSCANADA CORP. $40 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 703.0 million; Market cap: $27.3 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.transcanada.com) operates a pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. It also owns or invests in over 20 power plants in Canada and the U.S. In June 2010, the company opened the first phase of its Keystone pipeline. This phase pumps crude oil from Alberta to refineries in Illinois. The second phase extends to Oklahoma, and began operating in February 2011....

PLEASE NOTE: Our next Hotline will go out on Friday, July 8, 2011. SNC-LAVALIN GROUP INC., $58.88, Toronto symbol SNC, rose 9% this week in response to its purchase of certain assets of Atomic Energy of Canada Ltd. from the federal government. The purchase mainly consists of Atomic Energy’s Candu nuclear-reactor division. All of Canada’s reactors use the Candu design and technology. The division has also sold reactors to Argentina, Romania, India, South Korea and China....

Claymore Investments, Inc., is the wholly owned Canadian subsidiary of Chicago-based Guggenheim Partners. The Canadian branch now offers 29 exchange-traded funds (ETFs) that trade on the Toronto exchange. All of the funds aim to combine what Claymore sees as the advantages of passive investment in an index, along with active management to eliminate stocks from the index that it expects to perform poorly. The funds use a variety of mathematically formulated models, or quantitative investment methodologies. The managers see this as a systematic approach to equity selection, portfolio monitoring and portfolio management....

ENBRIDGE INC. $31 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 774.3 million; Market cap: $24.0 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.2%; TSINetwork Rating: Above Average; 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 natural gas to 2 million consumers in Ontario, Quebec and parts of New York State. The company is also developing a gas distribution system in New Brunswick. ...

PEMBINA PIPELINE CORPORATION $24.55 (Toronto symbol PPL; Shares outstanding: 163.8 million; Market cap: $4.1 billion; TSI Network Rating: Extra Risk; Dividend yield: 6.4%; www.pembina.com) owns nine pipeline systems with a total length of over 8,000 kilometres. These pipelines bring oil and gas from fields in northeastern B.C. and western and northern Alberta to refineries, or feed into major pipelines, such as the Enbridge Pipeline System. It also owns the Syncrude, Horizon and Cheecham pipelines, which pump crude oil from the Alberta oil sands. As well, it 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 March 31, 2011, Pembina’s cash flow rose 12%, to $74.5 million, or $0.45 a share, from $66.5 million, or $0.41 a share, a year earlier....

Brompton Equity Split Corp., $12.97, symbol BE on Toronto (Shares outstanding: 1.7 million; Market cap: $21.9 million; www.bromptongroup.com) mainly invests in large-cap Canadian stocks. The fund was scheduled to wind up on May 31, 2011. However, it now plans to merge with Dividend Growth Split Corp., $9.21, symbol DGS on Toronto (Shares outstanding: 4.3 million; Market cap: $40.0 million; www.bromptongroup.com), on May 18, 2011. The new Dividend Growth Split Corp., symbol DGS on Toronto, will have a termination date of November 30, 2019....

Dividend 15 Split Corp., $12.30, symbol DFN on Toronto (Shares outstanding: 13.6 million; Market cap: $167.3 million; www.dividend15.com), is a split-share investment corporation that holds shares of 15 companies: BCE Inc., CI Financial Corporation, Bank of Nova Scotia, Thomson Reuters, National Bank of Canada, TransAlta Corporation, Sun Life Financial, Canadian Imperial Bank of Commerce, TransCanada Corporation, Manulife Financial, TD Bank, Royal Bank of Canada, Bank of Montreal, Telus Corporation and Enbridge. The company can also invest up to 15% of its portfolio in other stocks. Dividend 15 Split Corp. has two share classes: Dividend 15 Split Corp. capital shares (Toronto symbol DFN), and Dividend 15 Split Corp. preferred shares (Toronto symbol DFN.PR.A)....

Cenovus Energy Inc., symbol CVE on Toronto, operates three oil-sands properties in Alberta, and one in Saskatchewan. Cenovus ships the heavy bitumen from these projects to refineries in Illinois and Texas. ConocoPhillips (New York symbol COP) owns 50% of these refineries, as well as 50% of Cenovus’ two main oil-sands projects. Cenovus also owns conventional oil and natural gas properties. Cenovus split off from EnCana Corp. in December 2009. In 2010, Cenovus earned $993.0 million, or $1.32 a share. That’s up 21.4% from $818.0 million, or $1.09 a share, in 2009. The oil stock’s production rose, as did oil prices. These were the main reasons for the higher earnings. These gains were somewhat offset by higher costs for shipping oil due to problems along the Enbridge pipeline system, and costs to upgrade its U.S. refineries. The oil stock’s cash flow fell 15.1% in 2010, to $2.4 billion, or $3.21 a share, from $2.8 billion, or $3.79 a share in 2009. Lower volumes and selling prices for natural gas were the main reasons for the declines....