income trust

Yellow Media Inc., $3.59, symbol YLO on Toronto (Shares outstanding: 640.1 million; Market cap: $2.2 billion; www.ypg.com), converted to a corporation from an income trust on November 1, 2010. As part of the conversion, it changed its name to Yellow Media from Yellow Pages Income Fund. Yellow Media is the largest telephone-directory publisher in Canada, where it owns the Yellow Pages and Pages Jaunes trademarks. It also operates web sites devoted to classified advertising. The company used to print free, advertising-based publications, including Auto Trader, Buy & Sell and Renters News, through 98%-owned Trader Corp. However, it recently sold Trader Corp. for $745 million in cash....

DUNDEE REIT, symbol D.UN on Toronto, owns and manages 14.7 million square feet of office, industrial and retail space, including 88 office buildings and 49 industrial properties. The real estate investment trust’s occupancy rate is 96.1%. In the three months ended March 31, 2011, Dundee’s revenue rose 57.4%, to $91.0 million from $57.8 million a year earlier. Most of the rise came from properties the trust recently purchased. The best way to look at a real estate investment trust’s operating performance is to look at its cash flow, and Dundee’s cash flow rose 72.9% in the latest quarter, to $28.8 million from $16.6 million. Cash flow per unit rose just 1.9%, to $0.55 from $0.54, due to more units outstanding. (The trust issued new units to pay for the acquired properties.)...

PEMBINA PIPELINE CORPORATION $24.55 (Toronto symbol PPL; Shares outstanding: 163.8 million; Market cap: $4.1 billion; TSI Network Rating: Extra Risk; Dividend yield: 6.4%; www.pembina.com) owns nine pipeline systems with a total length of over 8,000 kilometres. 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. It also owns the Syncrude, Horizon and Cheecham pipelines, which pump crude oil from the Alberta oil sands. As well, it holds a 50% stake in the Fort Saskatchewan Ethylene Storage Limited Partnership. It also owns the Cutbank Complex, a network of natural-gas gathering and processing facilities. In the three months ended March 31, 2011, Pembina’s cash flow rose 12%, to $74.5 million, or $0.45 a share, from $66.5 million, or $0.41 a share, a year earlier....

Northland Power Inc., $16.93, symbol NPI on Toronto (Shares outstanding: 97.7 million; Market cap: $1.9 billion; www.northlandpower.ca), is the new name of Northland Power Income Fund after it converted from an income trust to a corporation on January 1, 2011. Northland owns interests in nine power projects in Canada, the U.S. and Germany. These projects include natural-gas-fired plants, as well as renewable-power projects, such as wind farms and biomass operations. In all, the company generates over 1,050 megawatts of electricity a year. Northland sells almost all of its power under long-term contracts with an average length of 14 years. The company is building a number of new plants in Canada. These include the 86-megawatt Spy Hill natural-gas-fired plant; the 260-megawatt natural-gas-fired North Battleford project; and the 100-megawatt Mont Louis wind farm....

RUSSEL METALS, $24.55, symbol RUS on Toronto, earned $33 million, or $0.55 a share, in the three months ended March 31, 2011. That’s up sharply from $9.1 million, or $0.15 a share, a year earlier. Revenue rose 24.8% to $657.7 million from $526.8 million. The company benefited from higher sales volumes and metals prices, and improved profit margins. Russel saw revenue gains from all three of its divisions: The steel distribution division’s revenue rose 40%, due to higher flat-rolled steel prices. Metal services revenue rose 30% on higher sales volumes and steel prices. The energy tubular products division, which supplies pipes for oil and gas exploration and development, saw its revenue rise 14% on higher demand for oil and gas rigs....

Genivar Inc., $30.18, symbol GNV on Toronto (Shares outstanding: 26.0 million; Market cap: $785.2 million; www.genivar.com), is one of Canada’s largest engineering-services firms by number of employees, with 4,500. The company provides consulting services for all stages of a project, including planning, design, construction and maintenance. It has clients in both the public and private sectors. Genivar first sold units to the public at $10 each and began trading on Toronto in May 2006. The company converted from an income trust to a corporation on January 1, 2011. In the three months ended December 31, 2010, Genivar’s revenue rose 21.4%, to $580.4 million from $477.9 million. About half of the rise was due to acquisitions. Cash flow per share rose 3.9%, to $2.66 from $2.56....

CHC Helicopters Group, $22.67, symbol CHL.A on Toronto (Shares outstanding: 12.6 million; Market cap: $288.3 million; www.chc.ca), provides helicopter transportation services to clients in a broad range of industries, including infrastructure, utilities, oil and gas, mining, forestry, construction and emergency medical services. The company also provides military support in Afghanistan. CHC has a fleet of 94 light-duty and 28 medium- to heavy-duty helicopters that operate from 35 bases across Canada and two in Afghanistan. CHC also repairs and maintains helicopters in Canada and the U.S., and operates two flight schools in Canada. The company has nearly 1,000 active customers. However, its two largest customers accounted for 53.5% of its revenue in 2010. Ornge, which transports patients to hospitals in Ontario, supplied 19.5% of CHC’s revenue. The U.S. military, which uses CHC’s helicopters for supply and transport in Afghanistan, accounted for 34%. That concentration of business in just two customers is a significant risk factor....

Real estate investment trusts (REITs) are exempt from Ottawa’s income-trust tax, which came into effect January 1, 2011. That exemption makes REITs’ high yields more attractive, because most trusts have converted to corporations or cut their distributions in response to the new tax. Our REIT recommendations have all moved up, but we still think they offer attractive long-term returns at relatively low risk. ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $23.52 (Toronto symbol AP.UN; Units outstanding: 46.2 million; Market cap: $1.1 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.6%) owns office buildings in Toronto, Montreal, Quebec City and Winnipeg. These mainly Class I properties contain over 6.3 million square feet of leasable area. Class I refers to 19th and early 20th-century light industrial buildings that have been restored and converted to office and retail space. These properties usually feature high ceilings, natural light, exposed beams, interior brick and hardwood floors....

BELL ALIANT INC. $27.01 (Toronto symbol BA: Shares outstanding: 227.8 million; Market cap: $6.2 billion; TSINetwork Rating: Above Average; Yield: 7.0%; www.aliant.ca) provides telephone services in Atlantic Canada, as well as rural parts of Ontario and Quebec. BCE Inc. owns 44.1% of Bell Aliant. Bell Aliant converted from an income trust on January 1, 2011. The conversion forces Bell Aliant to pay income taxes. In response, the company changed the rate and frequency of its payout, starting in March 2011. The company now pays quarterly dividends of $0.475 a share. The new annual rate of $1.90 (down from $2.90) now yields 7.0%. That’s still a high payout for a dividend paying stock and high as well compared to similar telephone utilities. As well, investors who hold Bell Aliant outside an RRSP benefit from the dividend tax credit....

CGI GROUP INC., $20.70, Toronto symbol GIB.A, is Canada’s largest provider of computer-outsourcing services. The company’s services can automate certain routine functions, such as accounting and buying supplies. That makes its clients more efficient, and lets them focus on their main businesses. In its fiscal 2011 second quarter, which ended March 31, 2011, CGI earned $117.0 million. That’s up 43.4% from $81.6 million a year earlier. Due to fewer shares outstanding, earnings per share rose 50.0%, to $0.42 from $0.28. If you exclude a tax gain, the company would have earned $0.40 a share in the latest quarter. That beat the consensus earnings estimate of $0.38 a share. Revenue rose 24.5%, to $1.1 billion from $910.4 million a year earlier. If you exclude the negative impact of exchange rates, revenue would have risen 27.9%. Canadian revenue rose 4.3%, and U.S. revenue jumped 67.3%, mainly because the company won a number of new contracts from the U.S. federal government....