transcanada

TRANSCANADA CORP., $38.01, Toronto symbol TRP, recently opened the second phase of its four-phase Keystone pipeline project, which pumps crude oil from the Alberta oil sands to refineries in the U.S. Midwest. The third phase, called Keystone XL, will pump oil from Oklahoma to the U.S. Gulf Coast. The fourth phase will run from Alberta to Nebraska. Regulatory delays and higher-than-expected construction costs have pushed up the entire project’s cost to $13 billion U.S. That’s 8.3% higher than TransCanada’s earlier estimate of $12 billion U.S. So far, the company has spent $7.4 billion U.S. on Keystone. It aims to complete the remaining two phases by mid-2013....

TRANSCANADA CORP. $38 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 690.0 million; Market cap: $26.2 billion; Price-to-sales ratio: 3.2; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.transcanada.com) has received enough commitments from oil shippers to build a new pipeline from Montana and North Dakota to oil-storage facilities in Cushing, Oklahoma. This pipeline will cost $140 million. TransCanada also plans to build a $70-million pipeline from Cushing to refineries on the U.S. Gulf Coast. To put these costs in context, TransCanada earned $374 million, or $0.54 a share, in the three months ended September 30, 2010. If these projects receive regulatory approval, they should begin operating in 2013. These new pipelines will complement TransCanada’s $12-billion U.S. Keystone pipeline project, which recently started pumping oil from Alberta to refineries in the U.S. Midwest....

ISHARES DEX UNIVERSE BOND INDEX FUND $29.48 (CWA Rating: Income) (Toronto symbol XBB; buy or sell through a broker) mirrors the performance of the DEX Universe Bond Index. This index consists of a wide range of investment-grade Canadian government and corporate bonds with terms to maturity of more than one year. The 406 bonds in the portfolio have an average term to maturity of 9.05 years. The fund’s MER is 0.30%. The bonds in the index are 69.6% government and 30.4% corporate. The fund sticks with high-quality government bonds from issuers such as Canada Housing Trust, Government of Canada and Province of Ontario, plus high-quality corporate bonds from issuers such as Bank of Montreal, TransCanada Pipelines, Bank of Nova Scotia and Bell Canada....

We continue to advise against investing in bonds right now, because today’s low interest rates make them unattractive. That’s especially so in light of the potential rise in inflation that may follow the heavy deficit spending and expansion of the money supply that is still underway. However, if you need stable income and want to hold bonds, here are two bond funds that have low fees and high-quality holdings. ISHARES DEX SHORT TERM BOND INDEX FUND $28.78 (CWA Rating: Income) (Toronto symbol XSB; buy or sell through a broker) mirrors the performance of the DEX Short-Term Bond Index....

TRANSCANADA CORP. $37.22 (Toronto symbol TRP; Shares outstanding: 693.0 million; Market cap: $25.8 billion; TSINetwork Rating: Above Average; Dividend yield: 4.3%; www.transcanada.com) operates a 60,000-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. The company also owns, or has interests in, over 10,900 megawatts of power generation. That includes Bruce Power LP, a nuclear power plant in Ontario, and the Ravenswood facility, which serves New York City. In the three months ended September 30, 2010, TransCanada’s revenue rose 3.9%, to $2.1 billion from $2.05 billion a year earlier. Earnings per share rose 10.2%, to $0.54 from $0.49, due to lower costs and higher production at Bruce Power....

TRANSCANADA CORP. $37.23 (Toronto symbol TRP; Shares outstanding: 693 million; Market cap: $25.8 billion; TSINetwork Rating: Above Average; Dividend yield: 4.3%; www.transcanada.com) earned $374 million in the three months ended September 30, 2010. That’s up 11.6% from $335 million a year earlier. Earnings per share rose 10.2%, to $0.54 from $0.49, on more shares outstanding. These figures exclude losses on contracts TransCanada uses to lock in prices on natural gas it has in storage. Revenue rose 3.9%, to $2.1 billion from $2.05 billion. Lower costs and higher production at the Bruce nuclear power complex in Ontario helped spur TransCanada’s earnings in the latest quarter. (The company owns 48.8% of the Bruce A reactors and 31.6% of the Bruce B reactors.)...

Riverbed Technology Inc., $37.26, symbol RVBD on Nasdaq (Shares outstanding: 73.5 million; Market cap: $2.7 billion, www.riverbed.com), is a leader in wide area network (WAN) optimization. As more workers move outside the office and computer users increasingly access remote datacenters, programs and data that were initially intended for local area networks (LAN) are being slowed down by WAN connections, which have less bandwidth capacity. Riverbed’s products aim to improve the performance of programs, and increase data transmission speed across networks, while lowering the need to add new hardware. Riverbed’s sales and profits are rising. Most important, it’s making sales to large, well-established customers in a range of industries....

TRANSCANADA CORP. $38 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 696.0 million; Market cap: $26.4 billion; Price-to-sales ratio: 3.2; Dividend yield: 4.2%; SI Rating: Above Average; www.transcanada.com) earned $374 million in the three months ended September 30, 2010. That’s up 11.6% from $335 million a year earlier. Earnings per share rose 10.2%, to $0.54 from $0.49, on more shares outstanding. These figures exclude gains and losses on contracts TransCanada uses to lock in prices on natural gas it has in storage. Revenue rose 3.9%, to $2.1 billion from $2.05 billion. Lower costs and higher production at the Bruce nuclear power complex in Ontario helped spur TransCanada’s earnings in the latest quarter. (The company owns 48.8% of the Bruce A reactors and 31.6% of the Bruce B reactors.) As well, TransCanada recently opened the first phase of its $12-billion U.S. Keystone pipeline, which pumps crude oil from Alberta to refineries in the U.S. Midwest. Keystone’s second phase should begin operating in the first quarter of 2011....

TRANSCANADA CORP. $36.88 (Toronto symbol TRP; Shares outstanding: 693 million; Market cap: $25.6 billion; TSINetwork Rating: Above Average; Dividend yield: 4.3%; www.transcanada.com) has opened its $350-million U.S. Kibby wind farm in Maine. The wind-power industry has grown quickly in recent years, largely due to government subsidies. However, high budget deficits have spurred rising political opposition to these subsidies. Still, wind power accounts for just 4% of TransCanada’s total generating capacity of 10,800 megawatts....

TRANSCANADA CORP. $37 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 693.0 million; Market cap: $25.6 billion; Price-to-sales ratio: 3.0; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.transcanada.com) has opened its $350-million U.S. Kibby wind farm in Maine. The wind-power industry has grown quickly in recent years, largely due to government subsidies. However, high budget deficits have spurred rising political opposition to these subsidies. Still, wind-power accounts for just 4% of TransCanada’s total generating capacity of 10,800 megawatts. TransCanada is a buy.