imperial oil

The Data Group Income Fund, $6.45, symbol DGI.UN on Toronto (Units outstanding: 23.5 million; Market cap: $151.5 million; www.datagroup.ca), sells commercial-printing and related services to a variety of customers, including Canada Post, Bell Canada, Manulife Financial Corp., Bank of Montreal, Imperial Oil, Ontario Lottery and Gaming Corp. and British Columbia Lottery Corp. By outsourcing their printing needs to Data Group, the fund’s clients can focus on their main businesses and improve their efficiency. Data Group has three divisions:...

IMPERIAL OIL $37.45 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $31.7 billion; TSINetwork Rating: Average; Dividend yield: 1.2%; www.imperialoil.com) owns 70% of the massive Kearl oil-sands project in Alberta. Imperial’s parent company, ExxonMobil Corp. owns the remaining 30%. It will cost a total of $8 billion to bring Kearl into operation. Imperial’s share is $5.6 billion. Imperial has made some changes to this project. That will add to Kearl’s initial costs, but will raise its expected production by 5%. Meanwhile, Imperial’s earnings fell 23.6% in the three months ended September 30, 2010, to $418 million, or $0.49 a share. A year earlier, it earned $547 million, or $0.64 a share. Planned maintenance at Imperial’s oil-sands operations pushed down production by 7.0% in the latest quarter. That was the main reason for the earnings drop....

BANK OF NOVA SCOTIA $54 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.0 billion; Market cap: $54.0 billion; Price-to-sales ratio: 2.4; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.scotiabank.com) will get $47 million in earnings from its Mexican subsidiary in its current quarter. To put this in context, Bank of Nova Scotia earned $1.1 billion, or $0.98 a share, in the three months ended July 31, 2010. The Mexican operation’s latest earnings are down 10.2% from a year earlier, largely because it wrote down the value of certain securities it holds. Without these writedowns, its earnings would have risen 11%. Bank of Nova Scotia is a buy....

SNC-LAVALIN GROUP INC., $52.78, Toronto symbol SNC, is a leading Canadian engineering and construction company. SNC also owns 16.77% of Highway 407, a 108-kilometre toll highway north of Toronto. This week, the Canadian Pension Plan Investment Board (CPPIB) agreed to buy 10% of Highway 407 from the highway’s main shareholder, Ferrovial S.A. of Spain. Ferrovial currently owns 53% of 407. CPPIB agreed to pay $894.3 million for 10% of the 407. However, SNC intends to exercise its right of first refusal and buy these shares from Ferrovial. That will raise SNC’s stake in the highway to 26.77%....

BCE INC. $33.80 (Toronto symbol BCE; Shares outstanding: 756.5 million; Market cap: $25.6 billion; SI Rating: Above Average; Dividend yield: 5.4%) is buying full control of CTVglobemedia, the private company that owns the 27-station CTV Television Network. CTVglobemedia also owns 30 speciality channels, 34 radio stations and The Globe and Mail newspaper. Right now, BCE owns 15% of CTVglobemedia. It will pay $1.3 billion for the remaining 85%. The company will also assume $1.7 billion of CTVglobemedia’s debt. Following the purchase, BCE will sell 85% of The Globe and Mail to Woodbridge Co. These deals still need regulatory approval, but BCE expects to complete them in mid-2011. Buying full control will make it easier for BCE to lower CTVglobemedia’s costs and improve its profitability. As well, adding CTVglobemedia will help BCE profit as more people watch TV programs over the Internet and on wireless devices. Moreover, the cost of the purchase shouldn’t hinder BCE’s plan to keep raising its dividend; the current annual rate of $1.83 a share yields 5.4%....

CENOVUS ENERGY INC., $28.74, Toronto symbol CVE, has received regulatory approval to expand its Foster Creek oil-sands project in northern Alberta. Cenovus owns 50% of this project; U.S.-based oil company ConocoPhillips (New York symbol COP) owns the other 50%. The company will expand Foster Creek in three phases over the next seven years. When the expansion is finished, Foster Creek’s average daily production will rise to 210,000 barrels from the current 120,000 barrels. Cenovus has also asked for approval for a fourth phase, which would bring Foster Creek’s average daily production up to 235,000 barrels, starting in 2019. Cenovus’ share is 117,500 barrels. To put these figures in context, Cenovus’ average daily production, including natural gas, was 253,733 barrels in its latest quarter....

IMPERIAL OIL $39.55 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $33.5 billion; SI Rating: Average; Dividend yield: 1.1%) has formed a new joint venture with parent company ExxonMobil Corp. (New York symbol XOM) and BP plc (New York symbol BP). This new company will explore for oil and natural gas in the Beaufort Sea. Imperial and Exxon will each own a 25% stake in the venture, and BP will own 50%. Underwater exploration in the arctic is hugely expensive, so this joint venture will help all three partners lower their costs. Developing these offshore fields would also help Imperial with its plan to build a new pipeline that would pump gas from the Mackenzie Delta to Alberta. However, exploration will have to wait while regulators review offshore drilling safety standards in the wake of BP’s oil spill in the Gulf of Mexico....

Canadian Oil Sands Trust, $25.51, symbol COS.UN on Toronto (Units outstanding: 484.4 million: Market cap: $12.4 billion), has a 36.74% interest in Syncrude Canada Ltd. Canadian Oil Sands’ share of Syncrude’s current oil production is about 118,569 barrels per day. Syncrude is the largest producing oil-sands project in the world, and Canadian Oil Sands Trust is Syncrude’s biggest stakeholder. Other partners in the Syncrude Canada venture include Imperial Oil (25%); Suncor Energy (12%); ConocoPhillips (9.03%); Nexen Oil Sands Partnership (7.23%); Mocal Energy (5%); and Murphy Oil (5%). ConocoPhillips recently agreed to sell its 9.03% stake in Syncrude to China’s Sinopec for $4.65 billion U.S. Based on that price, Canadian Oil Sands’ 36.74% interest in Syncrude is potentially worth $18.9 billion U.S. That’s 28.6% more than the trust’s current market cap. The sale should close in the third quarter of 2010....

IMPERIAL OIL LTD. $39 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; Shares outstanding: 847.6 million; Market cap: $33.1 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.1%; SI Rating: Average) has formed a new joint venture with parent company ExxonMobil Corp. (New York symbol XOM) and BP plc (New York symbol BP). This new company will explore for oil and natural gas in the Beaufort Sea. Imperial and Exxon will each own a 25% stake in the venture, and BP will own 50%. Underwater exploration in the arctic is hugely expensive, so this joint venture will help all three partners lower their costs. Developing these offshore fields would also help Imperial with its plan to build a new pipeline that would pump gas from the Mackenzie Delta to Alberta. However, exploration will have to wait while regulators review offshore drilling safety standards in the wake of BP’s oil spill in the Gulf of Mexico....

Energy ETFs (exchange-traded funds) can be a good, low-cost way to hold energy stocks. In our newsletters, we recommend a number of energy stocks that would be good additions to a stock portfolio. If you want to hold an energy ETF, here’s one that invests in the biggest Canadian energy firms: iShares S&P/TSX Capped Energy Index Fund, $17.99, symbol XEG on Toronto (Shares outstanding: 45.2 million; Market cap: $813.1 million) aims to mirror the performance of the S&P/TSX Capped Energy Index, which is made up of the largest-capitalization energy stocks on the Toronto exchange. The weight of any one company is capped at 25% of the index’s market capitalization. The fund’s MER is 0.55%. It yields 2.5%. iShares S&P/TSX Capped Energy Index Fund’s top-10 holdings are Suncor Energy, 18.0%; Canadian Natural Resources, 13.8%; Encana Corp., 8.1%; Cenovus Energy, 7.9%; Talisman Energy, 6.2%; Canadian Oil Sands Trust, 4.8%; Nexen, 3.9%; Imperial Oil, 3.6%; Penn West Energy Trust, 3.2% and Crescent Point Energy, 3.2%....