encana
Toronto symbol ECA, and New York symbol ECA, is a leading North American producer of natural gas and oil.
ENCANA CORP. $20.16 (Toronto symbol ECA; Shares outstanding: 735.4 million; Market cap: $14.8 billion; TSINetwork Rating: Average; Dividend yield: 4.0%; www.encana.com) has agreed to sell 40% of its undeveloped Cutbank Ridge shale gas property in northeastern B.C. to Japan’s Mitsubishi Corp.
Encana will receive $1.45 billion (Canadian) when the sale closes at the end of February 2012. Mitsubishi will also invest an additional $1.45 billion over the next five years to develop this property. To put these figures in context, Encana’s cash flow was $4.2 billion U.S., or $5.66 U.S. a share, in 2011.
Adding a partner to help develop this field cuts Encana’s risk. Mitsubishi’s involvement will also help Encana open up new markets for its gas in Asia.
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Encana will receive $1.45 billion (Canadian) when the sale closes at the end of February 2012. Mitsubishi will also invest an additional $1.45 billion over the next five years to develop this property. To put these figures in context, Encana’s cash flow was $4.2 billion U.S., or $5.66 U.S. a share, in 2011.
Adding a partner to help develop this field cuts Encana’s risk. Mitsubishi’s involvement will also help Encana open up new markets for its gas in Asia.
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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....
ENCANA CORP. $20.16 (Toronto symbol ECA; Shares outstanding: 735.4 million; Market cap: $14.8 billion; TSINetwork Rating: Average; Dividend yield: 4.0%; www.encana.com) has agreed to sell 40% of its undeveloped Cutbank Ridge shale gas property in northeastern B.C. to Japan’s Mitsubishi Corp. Encana will receive $1.45 billion (Canadian) when the sale closes at the end of February 2012. Mitsubishi will also invest an additional $1.45 billion over the next five years to develop this property. To put these figures in context, Encana’s cash flow was $4.2 billion U.S., or $5.66 U.S. a share, in 2011. Adding a partner to help develop this field cuts Encana’s risk. Mitsubishi’s involvement will also help Encana open up new markets for its gas in Asia....
TELUS CORP., Toronto symbols T $57.22 and T.A $56.71, wants to merge its common shares and its non-voting class A shares into a single class. Telus created the non-voting shares in 1998, when U.S.-based Verizon Communications Inc. (New York symbol VZ) held a major interest in the company. The move let Telus comply with regulations preventing foreign control of Canadian telecom firms. Verizon sold its non-voting shares in 2004. Right now, non-Canadian investors hold less than 20% of Telus’s stock. The company currently has about 174.9 million common shares and 149.9 million non-voting shares outstanding. Under the terms of the proposal, each non-voting share will become one common share. Investors holding two-thirds of each share class, voting separately, must approve the plan at a special meeting on May 9, 2012....
ENCANA CORP. $19 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $14.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.0%; TSINetwork Rating: Average; www.encana.com) is one of North America’s largest natural gas producers. The company prefers to focus on large unconventional reserves, including shale gas, which is natural gas that is trapped in rock formations. To extract it, companies must pump water and chemicals into the rock. This fractures the rock and releases the natural gas. Encana’s proven and probable reserves could last 23 years.
In 2011, the company agreed to sell $3.5 billion of non-essential assets (all amounts except share price and market cap in U.S. dollars).
The sales are part of Encana’s plan to focus on its main gas-producing properties in Alberta, B.C., Wyoming, Michigan, Colorado and Louisiana. The company will also use the proceeds to maintain its quarterly dividend of $0.20 U.S. a share, for a 4.0% annualized yield.
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In 2011, the company agreed to sell $3.5 billion of non-essential assets (all amounts except share price and market cap in U.S. dollars).
The sales are part of Encana’s plan to focus on its main gas-producing properties in Alberta, B.C., Wyoming, Michigan, Colorado and Louisiana. The company will also use the proceeds to maintain its quarterly dividend of $0.20 U.S. a share, for a 4.0% annualized yield.
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ENCANA CORP. $19 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $14.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.0%; TSINetwork Rating: Average; www.encana.com) is one of North America’s largest natural gas producers. The company prefers to focus on large unconventional reserves, including shale gas, which is natural gas that is trapped in rock formations. To extract it, companies must pump water and chemicals into the rock. This fractures the rock and releases the natural gas. Encana’s proven and probable reserves could last 23 years. In 2011, the company agreed to sell $3.5 billion of non-essential assets (all amounts except share price and market cap in U.S. dollars). The sales are part of Encana’s plan to focus on its main gas-producing properties in Alberta, B.C., Wyoming, Michigan, Colorado and Louisiana. The company will also use the proceeds to maintain its quarterly dividend of $0.20 U.S. a share, for a 4.0% annualized yield....
ENCANA CORP. $19.59 (Toronto symbol ECA; Shares outstanding: 737.6 million; Market cap: $14.4 billion; TSINetwork Rating: Average; Dividend yield: 4.1%; www.encana.com) is selling two plants in the Cutbank Ridge area of northeastern B.C. to VERESEN $15.31 (Toronto symbol VSN; Shares outstanding: 169.8 million; Market cap: $2.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.5%). Veresen owns and operates energy pipelines and processing plants across North America.
These plants process natural gas from nearby wells. The sale also includes 370 kilometres of pipelines. Veresen will pay Encana $920 million (Canadian) when the deal closes in early 2012.
Including this deal, Encana sold or agreed to sell $3.5 billion U.S. of non-essential assets in 2011. The sales are part of its plan to focus on its main gas-producing properties in Alberta, B.C., Wyoming, Michigan, Colorado and Louisiana.
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These plants process natural gas from nearby wells. The sale also includes 370 kilometres of pipelines. Veresen will pay Encana $920 million (Canadian) when the deal closes in early 2012.
Including this deal, Encana sold or agreed to sell $3.5 billion U.S. of non-essential assets in 2011. The sales are part of its plan to focus on its main gas-producing properties in Alberta, B.C., Wyoming, Michigan, Colorado and Louisiana.
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H&R REAL ESTATE INVESTMENT TRUST $23.16 (Toronto symbol HR.UN; Units outstanding: 157.3 million; Market cap: $3.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.8%; www.hr-reit.com) owns stakes in 39 office buildings, 117 industrial properties and 133 retail properties across Canada. H&R has a 98.9% occupancy rate.
In the three months ended September 30, 2011, the REIT’s revenue rose 11.0%, to $169.6 million from $152.8 million a year earlier. Cash flow per unit rose 5.7%, to $0.37 from $0.35.
H&R is nearly finished building The Bow, a $1.33-billion, two-million-square-foot office building in Calgary. Encana Corp. has already leased the entire building for 25 years.
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In the three months ended September 30, 2011, the REIT’s revenue rose 11.0%, to $169.6 million from $152.8 million a year earlier. Cash flow per unit rose 5.7%, to $0.37 from $0.35.
H&R is nearly finished building The Bow, a $1.33-billion, two-million-square-foot office building in Calgary. Encana Corp. has already leased the entire building for 25 years.
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CANADIAN PACIFIC RAILWAY LTD., $70.77, Toronto symbol CP, is our “Stock of the Year” for 2012. Next week, Stock Pickers Digest, our newsletter for aggressive investors, will reveal its #1 pick for 2012. We’ve had great success with CP since we recommended it in the first issue of The Successful Investor in January 1995. In October 2001 the old CP broke up into five separate companies: CP Rail, CP Ships, Fording Coal, Pan Canadian and Fairmont Hotels. In 2002, PanCanadian merged with Alberta Energy to form EnCana, which broke up into Encana and Cenovus in December 2009. All of these mergers and breakups unlocked significant shareholder value. Railways are highly cyclical. Unpredictable factors, such as weather, also add risk: in 2011, avalanches in B.C. and spring floods in the Prairies delayed CP’s trains and hurt its earnings....
CANADIAN REIT $36.18 (Toronto symbol REF.UN; Units outstanding: 67.3 million; Market cap: $2.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.0%; www.creit.ca) owns over 160 properties, including retail, industrial and office buildings, located across Canada and in the Chicago area. These properties contain over 24 million square feet of leasable area. Its occupancy rate is 93.7%. In the three months ended September 30, 2011, the real estate investment trust’s revenue rose 5.5%, to $83.7 million from $79.4 million a year earlier. Cash flow per unit rose 5.3%, to $0.60 from $0.57. Canadian REIT bought $264.5 million of properties in 2011, including its June 2011 purchase of two fully leased malls in Mississauga, Ontario, for $174.4 million. Tenants include Future Shop, Famous Players, Chapters, Rona and National Sports....