monthly dividend
CARFINCO FINANCIAL GROUP $9.32 (Toronto symbol CFN; TSINetwork Rating: Speculative) (1-888-486-4356; www.carfinco.com; Shares outstanding: 24.6 million; Market cap: $229.3 million; Dividend yield: 5.2%) provides car loans to consumers who don’t meet the criteria of traditional lenders, like banks.
In the three months ended December 31, 2012, Carfinco’s revenue rose 16.1%, to $19.2 million from $16.5 million a year earlier. The company loaned $40.1 million in the quarter, up 24.4% from $32.2 million.
Earnings rose 13.6%, to $5.0 million, or $0.21 a share, from $4.4 million, or $0.18 a share.
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In the three months ended December 31, 2012, Carfinco’s revenue rose 16.1%, to $19.2 million from $16.5 million a year earlier. The company loaned $40.1 million in the quarter, up 24.4% from $32.2 million.
Earnings rose 13.6%, to $5.0 million, or $0.21 a share, from $4.4 million, or $0.18 a share.
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PENGROWTH ENERGY $4.98 (Toronto symbol PGF; Shares outstanding: 512.6 million; Market cap: $2.6 billion; TSINetwork Rating: Average; Dividend yield: 9.6%; www.pengrowth.com) produced 85,748 barrels of oil equivalent a day (60% natural gas and 40% oil) in 2012....
PENGROWTH ENERGY CORP. $4.90 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 511.8 million; Market cap: $2.5 billion; Price-to-sales ratio: 1.6; Dividend yield: 9.8%; TSINetwork Rating: Average; www.pengrowth.com) produced 85,748 barrels of oil equivalent a day (60% natural gas and 40% oil) in 2012. That’s up 15.9% from 73,973 barrels in 2011. However, depressed gas prices pushed down its cash flow by 13.1%, to $538.8 million from $620.0 million. Cash flow per share declined 35.8%, to $1.20 from $1.87, on more shares outstanding.
The stock is down 50% in the past year. That’s because investors are concerned that low gas prices and Pengrowth’s high debt ($1.8 billion, or 75% of its market cap) will force it to cut its $0.04-a-share monthly dividend, for a 9.8% annualized yield.
However, Pengrowth’s rising oil production will cut its risk. It recently began work on its Lindbergh oil sands project, which will produce 12,500 barrels a day by early 2015. That will rise to 50,000 barrels a day by 2018. Moreover, Pengrowth has $4.5 billion in tax pools that it can use to cut its tax bill until 2017.
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The stock is down 50% in the past year. That’s because investors are concerned that low gas prices and Pengrowth’s high debt ($1.8 billion, or 75% of its market cap) will force it to cut its $0.04-a-share monthly dividend, for a 9.8% annualized yield.
However, Pengrowth’s rising oil production will cut its risk. It recently began work on its Lindbergh oil sands project, which will produce 12,500 barrels a day by early 2015. That will rise to 50,000 barrels a day by 2018. Moreover, Pengrowth has $4.5 billion in tax pools that it can use to cut its tax bill until 2017.
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ALIMENTATION COUCHE-TARD, $53.63, symbol ATD.B on Toronto, reported sharply higher sales and earnings in its latest quarter. The company is the largest convenience store operator in Canada, with over 2,000 outlets. It also has nearly 3,700 U.S. stores. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K brand. In the three months ended February 3, 2013, Couche-Tard’s sales jumped 75.2%, to $11.6 billion from $6.6 billion a year earlier. The gain mostly came from Norway’s Statoil Fuel & Retail ASA, which Couche-Tard bought for $2.7 billion in June 2012 (all figures except share price in U.S. dollars). The company also benefited from higher fuel prices and merchandise sales. Couche-Tard gets about 30% of its revenue by selling merchandise....
WESTJET AIRLINES, $23.45, symbol WJA on Toronto, is now in the process of upgrading its interline agreement with Air France to a full code-sharing arrangement. This will be WestJet’s ninth code-sharing deal. Under their current agreement, WestJet and Air France co-operate on flights and baggage handling. WestJet has interline agreements with 21 other airlines around the world. Through code-sharing deals, airlines sell seats on one another’s planes using the same two-letter code. In this case, the AF code will be used when travellers on Air France flights to Toronto connect to Vancouver, Edmonton, Saskatoon, Regina, Thunder Bay, Ottawa, Quebec City, St. John’s, Moncton and Halifax. The AF code will also apply to Air France passengers taking WestJet flights to Winnipeg and Calgary from Toronto and Montreal....
These two resource stocks have strong potential as the global economy recovers. But they’re more volatile than our favourites in the resource sector, such as Teck and Imperial Oil (see box), so they should only make up a small part of your holdings.
PRECISION DRILLING CORP....
PRECISION DRILLING CORP....
CML HealthCare Inc., $7.28, symbol CLC on Toronto (Shares outstanding: 90.0 million; Market cap: $656.0 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 70% of CML’s revenue, performs a wide range of medical tests through its Ontario laboratory network, which consists of 114 specimen-collection centres and a central lab in Mississauga. CML’s large network of labs lets it take advantage of economies of scale that are not available to smaller competitors....
PENGROWTH ENERGY $4.49 (Toronto symbol PGF; Shares outstanding: 509.0 million; Market cap: $2.3 billion; TSINetwork Rating: Average; Dividend yield: 10.7%; www.pengrowth.com) plans to spend $770 million on upgrades to its oil and natural gas properties in 2013. That’s up 46.7% from the $525 million it probably spent in 2012.
Of this total, $300 million will go toward its Lindbergh oil sands project in Alberta. As a result, Lindbergh’s first phase will start in 2015, one year earlier than planned.
The company expects its cash flow to rise 14% in 2013, to $680 million. However, that’s 11.7% less than its spending plans. To make up the difference, Pengrowth plans to raise $700 million by selling certain properties. The cash from these sales should also help it maintain its monthly dividend of $0.04 a share. The annual rate of $0.48 yields 10.7%.
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Of this total, $300 million will go toward its Lindbergh oil sands project in Alberta. As a result, Lindbergh’s first phase will start in 2015, one year earlier than planned.
The company expects its cash flow to rise 14% in 2013, to $680 million. However, that’s 11.7% less than its spending plans. To make up the difference, Pengrowth plans to raise $700 million by selling certain properties. The cash from these sales should also help it maintain its monthly dividend of $0.04 a share. The annual rate of $0.48 yields 10.7%.
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PEYTO EXPLORATION & DEVELOPMENT CORP. $23.06 (Toronto symbol PEY; Shares outstanding: 148.5 million; Market cap: $3.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.1%; www.peyto.com) produces and explores for oil and natural gas in Alberta. Peyto’s average daily production of 46,033 barrels of oil equivalent is 89% gas and 11% oil.
In the three months ended September 30, 2012, the company’s cash flow was $0.54 a share, down 12.9% from $0.62 a share a year earlier. Lower gas prices offset a 26.5% rise in production.
The shares trade at 7.3 times Peyto’s forecast 2013 cash flow of $3.14 a share. The company’s long-term debt of $615 million is a low 18.1% of its $3.4-billion market cap.
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In the three months ended September 30, 2012, the company’s cash flow was $0.54 a share, down 12.9% from $0.62 a share a year earlier. Lower gas prices offset a 26.5% rise in production.
The shares trade at 7.3 times Peyto’s forecast 2013 cash flow of $3.14 a share. The company’s long-term debt of $615 million is a low 18.1% of its $3.4-billion market cap.
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BONAVISTA ENERGY $13.57 (Toronto symbol BNP; Shares outstanding: 176.9 million; Market cap: $2.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.1%; www.bonavistaenergy.com) explores for oil and natural gas in Alberta, Saskatchewan and B.C. Bonavista’s production is weighted 61% to gas and 39% to oil.
In the three months ended September 30, 2012, the company’s cash flow per share fell 42.9%, to $0.48 from $0.84 a year earlier. Gas prices declined by 38.0%, to $2.56 per thousand cubic feet from $4.13. Production also dropped 8.6%, to 65,464 barrels of oil equivalent per day (including gas) from 71,636 barrels.
Bonavista has cut its monthly dividend by 41.7%, to $0.07 from $0.12. That will help the company conserve cash to invest in its exploration and development program. The new annual rate of $0.84 a share still yields a high 6.1%. As well, Bonavista will now pay out just 39% of its cash flow as dividends, so further dividend cuts are unlikely.
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In the three months ended September 30, 2012, the company’s cash flow per share fell 42.9%, to $0.48 from $0.84 a year earlier. Gas prices declined by 38.0%, to $2.56 per thousand cubic feet from $4.13. Production also dropped 8.6%, to 65,464 barrels of oil equivalent per day (including gas) from 71,636 barrels.
Bonavista has cut its monthly dividend by 41.7%, to $0.07 from $0.12. That will help the company conserve cash to invest in its exploration and development program. The new annual rate of $0.84 a share still yields a high 6.1%. As well, Bonavista will now pay out just 39% of its cash flow as dividends, so further dividend cuts are unlikely.
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