oil and gas

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....

TRILOGY ENERGY CORP. $22.12 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290-2900; www.trilogy.com; Shares outstanding: 84.4 million; Market cap: $1.9 billion; Dividend yield: 1.9%) owns oil and gas properties in the Kaybob and Grande Prairie areas of central Alberta. About 78% of Trilogy’s production is natural gas. The remaining 22% is oil. In the three months ended December 31, 2010, Trilogy produced 21,544 barrels of oil equivalent per day (including natural gas). That was down 4.1% from 22,462 barrels a year earlier....

Toromont Industries Ltd., $30.60, symbol TIH on Toronto, operates two divisions: the equipment group distributes a broad range of Caterpillar and industrial equipment; the compression group builds natural-gas compression units. In the three months ended March 31, 2011, the Canadian stock pick’s revenue jumped 38.3% to $588.0 million from $425.3 million a year earlier. Enerflex Systems, which Toromont bought for $613 million in January 2010, was the main reason for the increase. Enerflex brought new oil and gas compression customers to Toromont. It also expanded Toromont’s international presence. Earnings rose 13%, to $0.26 a share from $0.23 a share. Order bookings were up 27% in the latest quarter from a year earlier. The company’s total backlog now stands at $1 billion, up 59% from a year ago....

PASON SYSTEMS, symbol PSI on Toronto, rents equipment that its customers use to monitor and manage land-based oil rigs. The stock market pick also provides communication systems, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas companies and drilling contractors throughout Canada, the U.S., Mexico and Argentina. In the three months ended March 31, 2011, Pason’s revenue jumped 50.0%, to $84.7 million from $56.4 million a year earlier. The company’s Canadian operations benefited from a cold winter that allowed rig movement on frozen ground until the end of March. Earnings climbed 125.3%, to $17.9 million, or $0.22 a share, from $7.9 million, or $0.10 a share. Stronger oil and gas industry drilling and higher selling prices for the company’s equipment pushed up results....

YAMANA GOLD, $11.46, symbol YRI on Toronto, has raised its quarterly dividend by 50%, to $0.045 a share, from $0.03 a share. This is the second time this year that the company has raised its payout: it increased its quarterly dividend by 50%, to $0.03 from $0.02, with the January 2011 payment. The new rate gives the shares a 1.6% yield. That’s a high dividend rate for a gold stock. By contrast, Barrick Gold yields 1.1%, Newmont Mining yields 1.5% and Goldcorp yields 0.9%. Yamana is also increasing its exploration budget. It will spend $105 million on exploration in 2011, up 23.5% from $85 million in 2010. Yamana expects to keep raising this spending in the following years. It could spend as much as $125 million on exploration in 2012....

PRECISION DRILLING CORP. $13 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 275.7 million; Market cap: $3.6 billion; Price-to-sales ratio: 2.5; No dividends paid since February 2009; TSINetwork Rating: Extra Risk; www.precisiondrilling.com) provides contract-drilling services to land-based oil and gas producers in Canada, the U.S. and Mexico. Precision owns 359 drilling rigs. The company earned $0.23 a share in the three months ended March 31, 2011. If you exclude a one-time charge related to the early repayment of certain notes, Precision would have earned $0.30 a share. That’s up 50.0% from $0.20 a share a year earlier. Revenue rose 40.8%, to $525.4 million from $373.1 million. The company continues to see strong demand for rigs that use horizontal drilling techniques to extract oil from hard-to-reach deposits....

Nexen, $23.93, symbol NXY on Toronto (Shares outstanding: 526.7 million; Market cap: $12.1 billion; www.nexeninc.com), has oil-sands and shale-gas operations in western Canada. It also develops and explores for conventional oil and gas, mainly in the North Sea, off the coast of western Africa and in the Gulf of Mexico. Nexen also produces oil and gas in Yemen. The shares trade at a reasonable 5.4 times the company’s forecast 2011 cash flow per share of $4.45. However, its operations in Yemen and Nigeria add political risk. As well, its offshore interests in the North Sea and the Gulf of Mexico are more expensive and riskier to operate than land-based wells. Nexen is okay to hold for aggressive investors....

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....

FIRSTSERVICE CORP., $35.77, symbol FSV on Toronto, serves the following areas of the real-estate market: commercial real estate; residential property management; and property improvement. In the three months ended March 31, 2011, revenue jumped 18.9%, to $478.4 million from $402.4 million a year earlier (all figures except share prices in U.S. dollars). The company saw higher revenue across all of its divisions: the commercial real-estate division’s revenue jumped 26.9%; residential-property-management revenue rose 14.6%; and property-services revenue rose 12.9%....

Pennsylvania-based Vanguard Group is one of the world’s largest investment-management companies. The group manages over $1 trillion U.S. in 150 mutual funds. Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S., because they aren’t registered with provincial securities commissions. For that matter, some Canadian funds aren’t available in all provinces. Canadians can, however, buy Vanguard exchange-traded funds (ETFs) that trade on U.S. stock exchanges. We don’t recommend all of Vanguard’s ETFs, but here are two we do see as low-fee buys:...