rrsp
Inter Pipeline Fund, $19.82, symbol IPL.UN on Toronto (Units outstanding: 267.2 million; Market cap: $5.3 billion; www.interpipelinefund.com), transports, stores, markets and processes oil and natural gas. The fund has four divisions:
- The oil sands division’s pipelines transport 35% of Canadian oil sands production.
- The conventional business’s pipelines handle 15% of western Canadian conventional crude oil.
- NGL Extraction converts 40% of Alberta’s exported natural gas into natural gas liquids, like ethane, propane and butane.
- The storage division operates terminals in the U.K., Germany and Ireland under the Simon Storage banner, and in Denmark under the Inter Terminals brand.
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on successful investing, and not least on successful retirement planning. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Tip of the week: “When you’re planning for retirement, make sure you make realistic calculations rather than indulging in wishful thinking.”...
PENN WEST PETROLEUM $21.63 (Toronto symbol PWT; Shares outstanding: 469.4 million; Market cap: $10.2 billion; TSINetwork Rating: Average; Dividend yield: 5.0%; www.pennwest.com) has raised its production by over 56% over the last five years. It is now one of North America’s largest oil and gas producers.
The company has made big investments in its operations in order to boost its production. Even so, its $2.9 billion of long-term debt is a reasonable 28.4% of its market cap. It has also lowered its debt from $3.5 billion at the start of 2010.
Penn West converted from a trust to a corporation on January 1, 2011. However, it has $7.0 billion of tax pools that it is using to offset the new tax. That’s letting it maintain its $1.08-a-share annual payout, which yields 5.0%. As well, the payout (like all dividends paid by converted trusts) is now eligible for the dividend tax credit if you hold your shares outside an RRSP.
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The company has made big investments in its operations in order to boost its production. Even so, its $2.9 billion of long-term debt is a reasonable 28.4% of its market cap. It has also lowered its debt from $3.5 billion at the start of 2010.
Penn West converted from a trust to a corporation on January 1, 2011. However, it has $7.0 billion of tax pools that it is using to offset the new tax. That’s letting it maintain its $1.08-a-share annual payout, which yields 5.0%. As well, the payout (like all dividends paid by converted trusts) is now eligible for the dividend tax credit if you hold your shares outside an RRSP.
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PEYTO EXPLORATION & DEVELOPMENT CORP. $18.87 (Toronto symbol PEY; Shares outstanding: 133.1 million; Market cap: $2.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.8%; www.peyto.com) produces and explores for oil and natural gas in Alberta. In response to Ottawa’s income trust tax, Peyto converted from a trust to a dividend paying stock on December 31, 2010.
Peyto’s average daily production of 36,390 barrels of oil equivalent (including natural gas) is 89% gas and 11% oil.
In the three months ended September 30, 2011, Peyto’s cash flow rose 34.8%, to $0.62 a unit from $0.46 a year earlier. The shares trade at 7.1 times the company’s forecast 2012 cash flow of $2.65 a share. Peyto’s long-term debt of $490 million is a low 19.6% of its $2.5-billion market cap.
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Peyto’s average daily production of 36,390 barrels of oil equivalent (including natural gas) is 89% gas and 11% oil.
In the three months ended September 30, 2011, Peyto’s cash flow rose 34.8%, to $0.62 a unit from $0.46 a year earlier. The shares trade at 7.1 times the company’s forecast 2012 cash flow of $2.65 a share. Peyto’s long-term debt of $490 million is a low 19.6% of its $2.5-billion market cap.
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PEYTO EXPLORATION & DEVELOPMENT CORP. $18.87 (Toronto symbol PEY; Shares outstanding: 133.1 million; Market cap: $2.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.8%; www.peyto.com) produces and explores for oil and natural gas in Alberta. In response to Ottawa’s income trust tax, Peyto converted from a trust to a dividend paying stock on December 31, 2010. Peyto’s average daily production of 36,390 barrels of oil equivalent (including natural gas) is 89% gas and 11% oil. In the three months ended September 30, 2011, Peyto’s cash flow rose 34.8%, to $0.62 a unit from $0.46 a year earlier. The shares trade at 7.1 times the company’s forecast 2012 cash flow of $2.65 a share. Peyto’s long-term debt of $490 million is a low 19.6% of its $2.5-billion market cap....
Ottawa’s tax on income trust distributions took effect over a year ago, on January 1, 2011. Most trusts have already converted to corporations in response. Real estate investment trusts (REITs) are exempt, however, so they will remain as trusts. All but one of our trust recommendations have converted. We still like the long-term outlook for all these picks, and we see them as buys. All of our REIT recommendations remain buys, as well....
There is one very important question we get from investors on a regular basis. How often should they sell investments they own and buy new ones? Our answer never varies. Do it as rarely as possible. That’s because turnover in your portfolio cuts into your profits. You face three costs every time you buy and sell a stock:...
Inter Pipeline Fund, $18.75, symbol IPL.UN on Toronto (Units outstanding: 264.1 million; Market cap: $5.0 billion; www.interpipelinefund.com), transports, stores, markets and processes oil and natural gas. The fund has three divisions: pipelines transports 35% of Canadian oil sands production and 15% of western Canadian conventional crude oil; extraction processes 40% of Alberta’s exported natural gas into natural gas liquids; and the storage division, which operates under the Simon Storage and TLG banners. In the three months ended September 30, 2011, Inter Pipeline’s revenue rose 30.4%, to $302.1 million from $231.7 million a year earlier. Cash flow per unit jumped 43.3%, to $0.43 from $0.30. That’s mainly because the company’s pipelines shipped 993,300 barrels a day in the quarter, up 24.6% from 797,300 barrels a year earlier. The increased volumes came mostly from a $1.8-billion expansion of the fund’s Corridor pipeline, which was completed in January 2011....
CRESCENT POINT ENERGY CORP. $44.35 (Toronto symbol CPG; Shares outstanding: 277.9 million; Market cap: $12.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.2%; www.crescentpointenergy.com) produces oil and natural gas in western Canada. Its production is weighted 90% toward oil and 10% to gas. The company continues to focus on its Bakken light-oil development in southeastern Saskatchewan. For all of 2011, Crescent Point will likely spend at least $1.1 billion on exploration at Bakken. That should rise even higher in 2012. In the three months ended September 30, 2011, Crescent Point’s cash flow per share rose 19.8%, to $1.09 from $0.91....