income trust
Canexus Income Fund, $6.46, symbol CUS.UN on Toronto (Units outstanding: 34.9 million; Market cap: $225.4 million), produces sodium-chlorate and chlor-alkali products, largely for the pulp-and-paper and water-treatment industries. The fund’s five plants — four in Canada and one in Brazil — aim to use nearby low-cost electricity and transportation facilities to cut production and delivery expenses. Canexus also provides “transloading” services (transfers of oil and gas by-products, such as butane, from railcars to trucks) to the oil and gas industry from its terminal at Bruderheim, Alberta. Canexus was formerly a division of Nexen Inc. (symbol NXY on Toronto). The fund began trading as a separate entity on August 18, 2005, at $10 per unit. In the three months ended December 31, 2009, Canexus’ revenue fell 11.2%, to $110.5 million from $124.5 million. However, cash flow per unit jumped to $0.33 from $0.14, largely because Canexus lowered its costs. The fund’s long-term debt of $78.5 million is a reasonable 35.8% of its market cap....
PEYTO ENERGY TRUST $13.25 (Toronto symbol PEY.UN; Units outstanding: 120.9 million; Market cap: $1.6 billion; SI Rating: Extra Risk; Dividend yield: 10.9%) produces and explores for oil and gas in Alberta. Its average daily production of 19,133 barrels of oil equivalent (including natural gas) is weighted 83% toward natural gas and 17% to oil. At current production rates, Peyto has proven oil and natural-gas reserves that should last 14 years. Peyto’s cash flow was $0.46 a unit in the three months ended December 31, 2009. The units trade at 7.3 times the trust’s annualized cash flow, based on the latest quarter....
ISHARES CDN REIT SECTOR INDEX FUND $12.05 (Toronto symbol XRE; buy or sell through a broker) holds the 10 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of this index’s value. RioCan REIT is the fund’s largest holding, at 23.7%, followed by H&R REIT (15.7%), Canadian REIT (12.0%), Boardwalk REIT (9.9%), Calloway REIT (9.1%), Primaris Retail REIT (6.8%), Canadian Apartment Properties REIT (6.5%), Chartwell Seniors Housing REIT (5.8%), Cominar REIT (5.7%) and Extendicare REIT (4.2%). The fund yields 5.4%. Most REITs, including those held by the iShares CDN REIT Sector Index Fund, are exempt from Ottawa’s new income-trust tax, which takes effect on January 1, 2011. That will keep the fund’s distributions high. Its expenses are 0.55% of its assets....
Chemtrade Logistics Income Fund, $12.64, symbol CHE.UN on Toronto (Units outstanding: 30.7 million; Market cap: $387.7 million), is one of North America’s largest suppliers of sulphuric acid, sulphur, liquid sulphur dioxide and sodium hydrosulphite. It also supplies sodium chlorate, phosphorous pentasulphide and zinc oxide. Aside from selling chemicals, Chemtrade processes spent acid. Chemtrade first sold units to the public for $10 each, and began trading on Toronto in July 2001. Chemtrade has three divisions: The Sulphur Products and Performance Chemicals division supplies about 59% of the fund’s revenue. Pulp Chemicals accounts for 10% of Chemtrade’s revenue, and the International division supplies the remaining 31%. This division removes and markets sulphur and sulphuric acid outside of North America....
CAPITAL POWER INCOME L.P. $17.78 (Toronto symbol CPA.UN; Shares outstanding: 53.9 million; Market cap: $958.3 million; SI Rating: Extra Risk; Dividend yield: 9.9%) is the new name of Epcor Power L.P. The change was made because Capital Power Corporation (Toronto symbol CPX) bought Epcor Utilities’ controlling interest in Epcor Power L.P. Capital Power Income has stakes in 26 power plants in Canada and the U.S. These facilities generate a total of 1,502 megawatts. In the three months ended December 31, 2009, Capital Power Income’s revenue rose 33.1%, to $138.2 million from $103.8 million. Favourable foreign-exchange rates were the main reason for the increase. Cash flow per unit rose 1.6%, to $0.65 from $0.64....
Every year, you gain an additional $5,000 of contribution room in your tax free savings account (TFSA). That means you have $10,000 of contribution room in 2010, rising to $15,000 in 2011, $20,000 in 2012 and so on. You also get to carry forward unused contribution room from previous years. Tax-free savings accounts let you earn investment income — including interest, dividends and capital gains — tax free. But unlike registered retirement savings plans (RRSPs), contributions to tax free savings accounts are not tax deductible. However, withdrawals from a TFSA are not taxed. Here are three tips you can use to make sure you’re getting the most profit — and tax benefits —from your tax free savings account:...
TimberWest Forest Corp., $5.01, symbol TWF.UN on Toronto (Units outstanding: 77.8 million; Market cap: $389.7 million), is an income trust that harvests logs from its approximately 796,000 acres of private land on Vancouver Island. The trust stopped paying distributions last year. TimberWest is continues to face very low demand for its products, and will likely continue to struggle for some time. The trust continues to sell land to real-estate developers to raise cash and meet its debt obligations. We don’t recommend TimberWest Forest Corp....
Most real estate investment trusts (REITs), including our recommendations, are exempt from Ottawa’s income-trust tax, which comes into effect on January 1, 2011. As a result, these REITs should attract investor interest this year, as many income trusts convert to corporations and cut their distributions. Even so, we advise against overindulging in REITs. But if you stick with REITs that have steady cash flows and sound balance sheets, like the two we recommend on this page, you should earn attractive long-term returns at relatively low risk. RIOCAN REAL ESTATE INVESTMENT TRUST $18.73 (Toronto symbol REI.UN; Units outstanding: 241.8 million; Market cap: $4.5 billion; SI Rating: Average; Dividend yield: 7.4%) is Canada’s largest REIT. RioCan has interests in 258 shopping malls across Canada, including 12 under development. In all, these properties contain over 60 million square feet of leasable area. The trust has a 97.4% occupancy rate....
We think investors will profit most — and with the least risk — by buying shares of well-established, dividend-paying stocks with strong business prospects. These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace. Here are 3 ways dividend paying stocks can help improve your portfolio’s long-term returns:...
Most real estate investment trusts (REITs), including our two new recommendations below, are exempt from Ottawa’s income-trust tax, which comes into effect on January 1, 2011. Even so, we still advise against overindulging in REITs. But if you stick with REITs that have steady cash flows and sound balance sheets, like the two we recommend on this page, you should earn attractive long-term returns at relatively low risk. ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $19.55 (Toronto symbol AP.UN; Units outstanding: 39.0 million; Market cap: $763.3 million; SI Rating: Extra Risk; Dividend yield: 6.8%) owns office buildings in Toronto, Montreal, Quebec City and Winnipeg. These mainly Class I properties contain over 5.8 million square feet of leasable area. Allied has a 96.2% occupancy rate....