income trust
CHEMTRADE LOGISTICS INCOME FUND $15.05 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics.com; Units outstanding: 41.7 million; Market cap: $627.6 million; Dividend yield: 8.0%) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base-metal processors. These companies create sulphur, acid and other by-products as part of their processing activities. Chemtrade converts these substances into useful chemicals, like sulphuric acid. In the three months ended March 31, 2012, Chemtrade’s revenue rose 34.4%, to $227.9 million from $169.6 million. That mostly reflects the contribution of Marsulex Inc., which Chemtrade bought for $419.5 million in cash and stock in June 2011. Cash flow rose 6.0%, to $27.5 million from $25.9 million. Cash flow per share fell 28.6%, to $0.66 from $0.84, on more shares outstanding from the Marsulex purchase....
CARFINCO FINANCIAL GROUP $7.93 (Toronto symbol CFNI; TSINetwork Rating: Speculative) (1-888 -486-4356; www.carfinco.com; Shares outstanding: 24.6 million; Market cap: $195.1 million; Dividend yield: 5.3%) provides car loans to consumers who aren’t able to meet the criteria of traditional lenders, like banks. Edmonton-based Carfinco started out by financing vehicle repairs in 1997. In 1999, it began providing loans for car and truck purchases. In January 2001, the company got out of the repair-financing business to focus solely on lending money to car buyers. Carfinco converted from a conventional corporation to an income trust in 2004. It converted back to a corporation on January 1, 2012....
CML HealthCare Inc., $9.48, symbol CLC on Toronto (Shares outstanding: 89.8 million; Market cap: $851.3 million; www.cmlhealthcare.com), was called CML HealthCare Income Fund before it converted from an income trust to a corporation on January 4, 2011. CML (or Canadian Medical Laboratories) is one of Canada’s largest health-care diagnostic services providers. It has two main divisions: Laboratory Services and Imaging Services. Laboratory Services, which provides 65% of CML’s revenue, performs a wide range of medical tests through its Ontario laboratory network, which consists of 115 specimen-collection centres and the company’s central laboratory in Mississauga. CML’s large network of labs lets it take advantage of economies of scale that are not available to smaller labs....
When the government introduced its income trust tax, most real estate investment trusts (REITs) were exempted. A year and a half after the tax took effect, this has kept REITs popular among investors seeking income as well as capital gains. PRIMARIS RETAIL REAL ESTATEINVESTMENT TRUST (Toronto symbol PMZ.UN; www.primarisreit.com) owns large malls in medium-sized Canadian cities and suburban areas. In all, it owns 33 properties that contain 13.7 million square feet of leasable area....
CARFINCO FINANCIAL GROUP $7.93 (Toronto symbol CFNI; TSINetwork Rating: Speculative) (1-888 -486-4356; www.carfinco.com; Shares outstanding: 24.6 million; Market cap: $195.1 million; Dividend yield: 5.3%) provides car loans to consumers who aren’t able to meet the criteria of traditional lenders, like banks.
Edmonton-based Carfinco started out by financing vehicle repairs in 1997. In 1999, it began providing loans for car and truck purchases. In January 2001, the company got out of the repair-financing business to focus solely on lending money to car buyers.
Carfinco converted from a conventional corporation to an income trust in 2004. It converted back to a corporation on January 1, 2012.
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Edmonton-based Carfinco started out by financing vehicle repairs in 1997. In 1999, it began providing loans for car and truck purchases. In January 2001, the company got out of the repair-financing business to focus solely on lending money to car buyers.
Carfinco converted from a conventional corporation to an income trust in 2004. It converted back to a corporation on January 1, 2012.
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Pat McKeough responds to many personal questions on specific stocks and other investment topics from the members of his Inner Circle. 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. This past week, one Inner Circle member asked about dividend stocks—specifically, about a pipeline firm that is one of Canada’s remaining income funds. The company has just made a major overseas acquisition and Pat assesses the potential risk and rewards. ...
Inter Pipeline Fund, $19.82, symbol IPL.UN on Toronto (Units outstanding: 267.2 million; Market cap: $5.3 billion; www.interpipelinefund.com), transports, stores, markets and processes oil and natural gas. The fund has four divisions:
- The oil sands division’s pipelines transport 35% of Canadian oil sands production.
- The conventional business’s pipelines handle 15% of western Canadian conventional crude oil.
- NGL Extraction converts 40% of Alberta’s exported natural gas into natural gas liquids, like ethane, propane and butane.
- The storage division operates terminals in the U.K., Germany and Ireland under the Simon Storage banner, and in Denmark under the Inter Terminals brand.
BELL ALIANT INC. $27.50 (Toronto symbol BA; Shares outstanding: 227.8 million; Market cap: $6.3 billion; TSINetwork Rating: Above Average; Dividend yield: 6.9%; www.aliant.ca) sells telephone and Internet services to 2.8 million customers in Atlantic Canada, as well as rural parts of Ontario and Quebec. The company also sells wireless services through an alliance with BCE, which owns 43.8% of Bell Aliant.
The company faces strong competition from cable providers. In addition, many of its phone customers are switching to wireless devices. However, Bell Aliant’s wireless agreement with BCE plus upgrades to its high-speed Internet network, are helping it hold on to clients and attract new ones.
Bell Aliant’s high-speed fibre optic systems now reach 458,000 homes. The company plans to expand this to 650,000 homes by the end of 2012.
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The company faces strong competition from cable providers. In addition, many of its phone customers are switching to wireless devices. However, Bell Aliant’s wireless agreement with BCE plus upgrades to its high-speed Internet network, are helping it hold on to clients and attract new ones.
Bell Aliant’s high-speed fibre optic systems now reach 458,000 homes. The company plans to expand this to 650,000 homes by the end of 2012.
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A positive outlook for the Canadian economy will continue to boost stocks across many industries. Some stocks benefit by supplying different industries, like this heavy equipment supplier we have just added it to the list of growth stocks we cover in our newsletter for aggressive investing, Stock Pickers Digest. WAJAX CORP. (Toronto symbol WJX; www.wajax.ca) sells and services heavy equipment, including cranes and forklifts. It also sells related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions)....
WAJAX CORP. $49 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding:16.6 million; Market cap: $813.4 million; Dividend yield: 6.6%) sells and services heavy equipment, including cranes and forklifts. It also sells related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions). Wajax operates through 117 dealerships across Canada. Its customers are in the natural resource, construction, manufacturing, industrial processing and transportation industries. In the three months ended December 31, 2011, Wajax’s revenue rose 19.2%, to $377.2 million from $316.4 million a year earlier. Demand remained strong across all of the company’s markets....