oil and gas

BUCKEYE PARTNERS L.P. $60 (www.buckeye.com) operates 9,600 kilometres of pipelines in the northeastern and midwestern U.S. Its network pumps gasoline, jet fuel and other petroleum products. The partnership also owns oil and gas storage terminals. Buckeye continues to benefit from oil producers that opt to store their crude instead of selling it at today’s low prices. In 2015, its oil-storage terminals operated at 96% of their capacity, compared to 85% in 2014. That’s mainly why its earnings in 2015 jumped 22.7%, to $3.41 a unit from $2.78. Buckeye also raised its quarterly distribution by 4.4%. The new annual rate of $4.75 a unit yields 7.9%. Buy. CEDAR FAIR L.P. $57 (www.cedarfair.com) has increased its quarterly distribution by 10.0%, to $0.825 a unit from $0.75. The new annual rate of $3.30 yields 5.8%. Buy. AMEREN CORP. $47 (www.ameren.com) provides power and natural gas to 3.3 million clients in Illinois and Missouri. The company’s revenue rose just 0.7% in 2015, to $6.10 billion from $6.05 billion in 2014. That’s mainly because warmer-than-usual weather hurt gas demand. Earnings per share rose 6.7%, to $2.56 from $2.40. Ameren expects its 2016 earnings will decline to $2.50 a share due to the bankruptcy of Noranda Aluminum, its biggest power customer in Missouri. Hold....

AltaGas Ltd., $32.59, symbol ALA on Toronto (Shares outstanding: 146.3 million; Market cap: $4.9 billion; www.altagas.ca), processes, transmits, stores and markets natural gas for producers; generates power from gas-fired, coal-fired, wind, biomass and hydroelectric plants; and operates natural gas utilities. In the three months ended September 30, 2015, AltaGas’s cash flow per share rose 19.0%, to $0.75 from $0.63 a year earlier. That’s mainly due to the January 2015 acquisition of three gas-fired power plants in the U.S. for $33.6 million. Revenue gained just 1.8%, to $452.2 million from $444.2 million. Low selling prices for its natural gas offset the extra revenue from its new operations. In November 2015, the company completed its purchase of three gas-fired power plants in northern California for $642 million U.S. These facilities have long-term contracts to sell their power to Pacific Gas & Electric, which cuts their risk. The purchase should increase AltaGas’s annual cash flow per share by 5%....

Royal Bank of Canada lifts earnings with sale of home and auto insurance unit, purchase of boutique U.S lender

MART RESOURCES, $0.18, symbol MMT on Toronto, has entered into a definitive agreement to sell all shares in the company for $0.25 each to a consortium—Midwestern Oil and Gas Company Ltd., San Leon Energy plc and 1038221 B.C. Ltd. Apart from regulatory and shareholder approvals, the deal is contingent on the consortium arranging financing. This includes $89.2 million, due February 24, 2016, to cover the purchase price. The buyers need another $200.5 million U.S. in financing to pay off Mart’s bank debt. If the group fails to win financing by February 24, the consortium can back out of the agreement (although Mart may extend the deadline). If it does back out, the consortium will be required to pay a break fee to Mart of $2.2 million U.S....

RUSSEL METALS $18.27 (Toronto symbol RUS; TSINetwork Rating: Speculative) (905-819-7777; www.russelmetals.com; Shares outstanding: 61.7 million; Market cap: $987.9 million; Dividend yield: 8.3%) is one of North America’s largest metal distributors, serving 39,000 clients at 53 locations in Canada and 12 in the U.S. In the three months ended December 31, 2015, Russel’s revenue fell 33.6%, to $673.0 million from $1.01 billion a year earlier. Sales mainly declined because revenue fell 43% at the company’s energy products division. That unit sells pipes to oil and natural gas drillers. Earnings, excluding one-time items, dropped sharply, to $10.0 million, or $0.16 a share, from $38.0 million, or $0.62. Russel’s earnings fell faster than revenue because steel prices moved down in the latest quarter. That hurts its profit margins and causes it to suffer losses on its inventory....

RUSSEL METALS $18.27 (Toronto symbol RUS; TSINetwork Rating: Speculative) (905-819-7777; www.russelmetals.com; Shares outstanding: 61.7 million; Market cap: $987.9 million; Dividend yield: 8.3%) is one of North America’s largest metal distributors, serving 39,000 clients at 53 locations in Canada and 12 in the U.S. In the three months ended December 31, 2015, Russel’s revenue fell 33.6%, to $673.0 million from $1.01 billion a year earlier. Sales mainly declined because revenue fell 43% at the company’s energy products division. That unit sells pipes to oil and natural gas drillers. Earnings, excluding one-time items, dropped sharply, to $10.0 million, or $0.16 a share, from $38.0 million, or $0.62. Russel’s earnings fell faster than revenue because steel prices moved down in the latest quarter. That hurts its profit margins and causes it to suffer losses on its inventory....

If you’re investing less than 20% of your portfolio in energy stocks, you may want to research the common problems with wind energy first.

TOROMONT INDUSTRIES LTD., $28.56, symbol TIH on Toronto, distributes a range of industrial equipment, including machinery made by Caterpillar Inc. It also makes refrigeration systems through its CIMCO division. In the three months ended December 31, 2015, the company’s revenue rose 1.4%, to $472.0 million from $465.7 million a year earlier. However, earnings fell 2.8%, to $44.4 million, or $0.57 a share, from $45.7 million, or $0.59. Toromont saw weaker demand from customers in construction and mining. The company had to cut its prices to compete, and that lowered its profit margins and earnings....

ROYAL BANK OF CANADA $66 (Toronto symbol RY; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.5 billion; Market cap: $99.0 billion; Price-to-sales ratio: 2.9; Dividend yield: 4.8%; TSINetwork Rating: Above Average; www.rbc.com) is selling its RBC General Insurance subsidiary to Aviva Canada. This business mainly sells home and auto insurance. As part of the sale, Royal’s customers can also access all of Aviva’s insurance products for the next 15 years. The sale makes sense, as regulators prevent Canadian banks from selling insurance policies through their branches. That limits Royal’s ability to expand this business. However, the bank will continue to sell life and health insurance through separate offices and online....

IMPERIAL OIL LTD. $41 (Toronto symbol IMO; Conservative Growth and Income Portfolios, Shares outstanding: 847.6 million; Market cap: $34.8 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.4%; TSINetwork Rating: Average; www.imperialoil.ca) gets about 90% of its crude oil from its Alberta oil sands operations, including its 25% stake in the Syncrude project. In addition, it has conventional oil and natural gas operations, also in Western Canada, and owns stakes in projects off the coast of Atlantic Canada. Imperial also owns three refineries, petrochemical plants and 1,700 gas stations, which operate under the Esso banner....