high dividend

In the February 2013 issue of Canadian Wealth Advisor, we named Bank of Nova Scotia our #1 safety-conscious pick for 2013 at $58.80 a share. The stock hit all-time highs and by the end of the year it had risen by 12.9%, or 16.8% including dividends. We think it has further gains ahead....

TRANSCONTINENTAL INC. $14 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.1 billion; Price-to-sales ratio: 0.5; Dividend yield: 4.1%; TSINetwork Rating: Average; www. tctranscontinental.com) is Canada’s leading printer of flyers, magazines, newspapers and books. This business accounts for 67% of its revenue and 85% of its earnings. The remaining 33% of revenue and 15% of earnings comes from publishing 35 magazines and 175 daily and weekly newspapers.

Advertisers continue to shift to the Internet. That’s why Transcontinental’s revenue fell from $2.2 billion in 2009 to $2.0 billion in 2011 (fiscal years end October 31). In 2012, the company traded its Mexican printing plants for six Canadian facilities. The new plants brought its revenue up to $2.1 billion in both 2012 and 2013.


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Capstone Infrastructure Corp., $3.71, symbol CSE on Toronto (Shares outstanding: 92.8 million; Market cap: $356.4 million; www.capstoneinfrastructure.com), is an electricity producer with 439 megawatts of capacity. It operates gas, wind, hydro, biomass and solar facilities and is developing wind power projects capable of generating a total of 79 megawatts of capacity. Capstone also invests in utilities, including a 33.3% stake in a municipal-heating business in Sweden and 50% of a regulated water utility in the U.K. The company continues to look for acquisitions. That adds risk, especially since it has previously added a wide range of operations, including solar and biomass, and made acquisitions as far away as Sweden....

TRANSCONTINENTAL INC. $14 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.1 billion; Price-to-sales ratio: 0.5; Dividend yield: 4.1%; TSINetwork Rating: Average; www. tctranscontinental.com) is Canada’s leading printer of flyers, magazines, newspapers and books....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific investment advice. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away....

Twin Butte Energy, $2.21, symbol TBE on Toronto (Shares outstanding: 342.1 million; Market cap: $755.8 million; www.twinbutteenergy.com), produces oil and gas in western Canada with a focus on the greater Lloydminster area along the Alberta and Saskatchewan border. Its output is 87% oil and 13% gas. In the three months ended June 30, 2013, Twin Butte produced 16,849 barrels of oil equivalent per day, up 18.7% from 14,193 barrels a year earlier. Despite the increase in production, Twin Butte’s cash flow fell 2.1%, to $33.1 million from $33.8 million. Cash flow per share fell 27.8%, to $0.13 from $0.18, on more shares outstanding. The lower cash flow was the result of sharply higher expenses as the company shifts into more costly oil production and away from natural gas. It also incurred higher road repair and other maintenance costs after unusually heavy rain and snow run-off....

Pat McKeough responds to many requests from members of his Inner Circle for specific advice on stocks as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle....

Keyera Corp. $57.05, symbol KEY on Toronto (Shares outstanding: 78.5 million; Market cap: $4.5 billion; www.keyera.com), provides a number of services to the natural gas industry, including gathering, processing, storage and transportation. The company reported cash flow of $1.01 a share in the three months ended June 30, 2013, up 29.5% from $0.78 a share a year earlier. Keyera raised its monthly dividend by 11.1%, to $0.20 a share from $0.18, beginning with the September 2013 payment. The stock now yields 4.2%....

Norbord Inc., $28.72, symbol NBD on Toronto (Shares outstanding: 53.3 million; Market cap: $1.6 billion; www.norbord.com), is one of the world’s largest producers of oriented strand board (OSB). The company can produce more than 5.1 billion square feet of OSB at 13 plants in North America and Europe. Brookfield Asset Management (Toronto symbol BAM) owns 52% of Norbord. OSB is an engineered wood-panel product that’s used as a plywood replacement in home construction and manufacturing. The company also produces particleboard, medium density fibreboard and other engineered wood products. In the three months ended June 30, 2013, Norbord’s revenue rose 34.2%, to $365 million from $272 million a year earlier. (All figures except share price and market cap in U.S. dollars.) Earnings jumped to $53 million, or $1.00 a share, from $6 million, or $0.14....

PENN WEST PETROLEUM $11.75 (Toronto symbol PWT; Shares outstanding: 485.0 million; Market cap: $5.7 billion; TSINetwork Rating: Average; Dividend yield: 4.8%; www.pennwest.com) is one of North America’s largest oil and gas producers. Its output is 63% oil and 37% gas.

In the quarter ended June 30, 2013, Penn West’s cash flow per share was unchanged at $0.57 from a year earlier. A 14.2% fall in daily output, to 140,083 barrels of oil equivalent from 163,181, offset higher oil and gas prices.

Penn West continues to shore up its finances and take measures to boost its value after it appointed Rick George as chairman and Allan Markin as vice-chairman.
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