enbridge

BMO DIVIDEND FUND $41.10 (BMO Mutual Funds, 77 King Street West, Suite 4200, Royal Trust Tower, Toronto, Ont., M5K 1J5, Tel: 1-800-665-7700; Web site: www.bmo.com. No load — deal directly with the bank) (CWA Rating: Conservative) holds about 48.5% of its portfolio in the Finance sector. The fund’s next-largest sectors are Energy (23.4%), Consumer Discretionary (5.9%) and Materials (5.0%). The $3.9-billion BMO Dividend Fund’s largest stock holdings are Bank of Nova Scotia, CIBC, Royal Bank, Suncor Energy, Manulife Financial, Toronto-Dominion Bank, TransCanada Corporation, EnCana Corporation, Enbridge and Goldcorp. The fund’s MER is 1.71%....

INNERGEX POWER INCOME FUND $9.95 (Toronto symbol IEF.UN; Shares outstanding: 29.4 million; Market cap: $292.6 million; SI Rating: Extra Risk) owns interests in 10 hydroelectric power plants in Quebec, Ontario, British Columbia and Idaho, as well as two wind farms in Quebec. The company’s hydroelectric plants in Quebec are at La Chaudiere, Saint-Paulin, Montmagny and Windsor. There are also three facilities at Portneuf. The Ontario plant is at Batawa, the B.C. station is at Rutherford Creek and the Idaho facility is at Horseshoe Bend. Innergex’s 10 hydroelectric plants have long-term power agreements that average 14.9 years. The two wind farms have 20-year power purchase agreements with Hydro-Quebec....

FORT CHICAGO ENERGY PARTNERS L.P. $8.47 (Toronto symbol FCE.UN; Units outstanding: 136.3 million; Market cap: $1.1 billion; SI Rating: Extra Risk) owns and operates energy infrastructure across North America. One of its major holdings is a 50% interest in the Alliance natural-gas pipeline, which runs 3,000 kilometres from Fort St. John, B.C., to Chicago. Enbridge Inc. owns the other 50%. Fort Chicago and Enbridge also own 85.4% of the Aux Sable natural gas liquids plant. As well, Fort Chicago owns 100% of the 1,324-kilometre Alberta Ethane Gathering System. Fort Chicago has added to its power-plant holdings over the last couple of years. It now owns natural gas-fired cogeneration plants in Ontario, California and Colorado, plus power plants in Ontario and Prince Edward Island....

EPCOR POWER, L.P. $15.04 (Toronto symbol EP.UN; Shares outstanding: 53.9 million; Market cap: $810.7 million; SI Rating: Extra Risk) has interests in 25 power plants in Canada and the U.S. These generate a total of 1,400 megawatts. In the three months ended June 30, 2009, EPCOR’s revenue rose 14.8%, to $165.2 million from $143.9 million. Cash flow per unit rose 29.1%, to $0.71 from $0.55. The trust’s plants generated and sold more power, including output from the Morris cogeneration facility in Illinois, which EPCOR bought late last year for $72.2 million U.S. Despite the improved results, EPCOR was still paying out almost all of its cash flow to unitholders, so it cut its quarterly distribution by 30.2%, to $0.44 a unit from $0.63, with the June 2009 payment. At this rate, it will pay out roughly 75% of its cash flow. EPCOR believes it can sustain this rate regardless of whether it remains a trust or converts to a corporation in 2011, when Ottawa’s new income-trust tax takes effect. EPCOR now yields 11.2%....

Claymore 1-5 Yr Laddered Corporate Bond ETF (exchange-traded fund), $20.78, symbol CBO on Toronto (Shares outstanding: 8.8 million; Market cap: $182.9 million), invests in a portfolio of short-term bonds drawn from the DEX (formerly Scotia Capital) Bond Index. The ETF is a recent new issue that first sold units to the public at $20 each, and began trading on Toronto on February 25, 2009. It has a 0.25% annual management fee and pays a $0.0715 quarterly distribution, which yields 1.4% on a yearly basis. The fund’s 25 holdings are divided into five staggered, or “laddered,” equally weighted maturities that range from one to five years. Each maturity includes five or more bonds with a minimum credit rating of “A”. Each year, the longest-term bonds will reach maturity, and the shorter-term bonds will be a year older. The fund can use proceeds of the matured bonds to buy new bonds that restore the desired portfolio balance....

Consumers’ Waterheater Income Fund, $6.34, symbol CWI.UN on Toronto (Units outstanding: 49.5 million; Market cap: $314 million), owns a portfolio of about 1.3 million installed gas-fired water heaters. These are mainly rented to residential customers in Ontario. About 40% of the 3.4 million households connected to the Ontario natural-gas system rent from the fund. These are mainly located in the Greater Toronto Area. Direct Energy (formerly part of Enbridge Inc.) services the fund’s water heaters and gets 35% of most rental revenue. In June 2006, Direct Energy sold its 19.9% equity interest in the fund. Enbridge started the water-heater rental program in the late 1950s, to encourage Ontario customers to switch to natural gas. This, in turn, would build year-round demand for Enbridge’s gas supply. Through the rental program, homeowners can install and maintain their water heaters with no capital outlay. The Canadian water-heater rental market is mainly limited to Ontario....

Enbridge Income Fund, $11.63, symbol ENF.UN on Toronto (Units outstanding: 34.6 million; Market cap: $403.3 million), holds a 50% interest in the Canadian portion of the Alliance Pipeline, and owns 100% of the Saskatchewan System. The Saskatchewan System operates crude-oil and liquids pipelines, including the Saskatchewan gathering, Westspur, Weyburn and Virden pipeline systems. The Alliance Pipeline, which went into operation in late 2000, is a 36-inch diameter pipeline with a daily capacity of 1.3 billion cubic feet of natural gas. It runs for 3,000 kilometres, from Fort St. John, British Columbia, to Chicago, Illinois. Alliance uses technology that makes it more efficient than many other pipelines. Aside from pipelines, Enbridge Income Fund holds a number of “green power” assets. These include a 50% interest in NRGreen Power Limited Partnership, which operates a waste heat recovery plant at Kerrobert, Saskatchewan. The plant converts exhaust heat from Alliance Pipeline’s natural-gas compressor station into electricity. The fund also owns a 50% interest in the SunBridge wind project in Saskatchewan, and a 33.3% interest in the Magrath and Chin Chute wind projects in southern Alberta....

HOME CAPITAL GROUP INC. $28 has adopted a shareholders’ rights plan, or “poison pill.” These plans let existing shareholders buy new shares at a discount if a hostile bidder acquires more than 20% of the outstanding shares. The extra shares would then drive up the cost to a potential buyer. While these plans sometimes protect management more than investors, we feel that the company’s strong prospects offset this risk. Home Capital has also increased its quarterly dividend by 7.7%, to $0.14 from $0.13. The new annual rate of $0.56 yields 2.0%. Best Buy. HART STORES INC. $1.30 will conserve cash for expansion by suspending its annual dividend payments. It last paid $0.10 a share on July 10, 2008. Hart currently operates 90 mid-sized department stores in eastern Canada, and plans to open a new store in Ontario later this year. The company focuses on smaller cities that big retail chains tend to avoid, which cuts its risk. Hold. SHAWCOR LTD. $20 has won a $50-million contract to provide coatings for Enbridge’s Alberta Clipper pipeline, which will pump crude oil from Alberta to Wisconsin. The company has also won contracts totalling $50 million related to pipeline projects in Europe. These deals are equal to 7% of ShawCor’s annual revenue of $1.4 billion. Buy....

BMO DIVIDEND FUND $37.58 (BMO Mutual Funds, 77 King Street West, Suite 4200, Royal Trust Tower, Toronto, Ont., M5K 1J5, 1-800-665-7700; Web site: www.bmo.com. No load — deal directly with the bank) (CWA Rating: Conservative) currently holds about 43.3% of its portfolio in the Financial services industry. Its next-largest holding is Energy at 23.1%. The $3.7 billion BMO Dividend Fund’s largest holdings are Bank of Nova Scotia, CIBC, Royal Bank, Canadian National Railway, Manulife Financial, TD Bank, TransCanada Corporation, EnCana Corporation, Enbridge and Goldcorp. The fund’s MER is 1.71%. Over the five years to May 31, 2009, the fund posted a 3.7% annual rate of return. The S&P/TSX index returned 6.9% annually. The index gained from the big run up in resources prices that lasted until early in 2008. The S&P/TSX index holds a high 46% or so of its holdings in Resources stocks....

PEMBINA PIPELINE INCOME FUND $14.86 (Toronto symbol PIF.UN; Units outstanding: 151.7 million; Market cap: $2.3 billion; SI Rating: Extra risk) owns nine pipeline systems with a total length of over 8,000 kilometres. This network is the largest feeder operation in Canada. 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. Pembina also owns the Syncrude, Horizon and Cheecham pipelines which transport crude oil from the Alberta oil sands. As well, it holds a 50% interest in the Fort Saskatchewan Ethylene Storage Limited Partnership. In the three months ended March 31, 2009, Pembina’s cash flow per unit fell 2.6%, to $0.37 from $0.38, largely due to enhanced maintenance programs. The fund pays a monthly distribution of $0.13. Pembina’s units now yield 10.5%. The fund flows about 90% of its cash flow through to its unitholders....