transcanada

Claymore 1-5 Yr Laddered Corporate Bond ETF, $20.82, symbol CBO on Toronto (Units outstanding: 20.5 million; Market cap: $426.8 million), invests in a portfolio of short-term bonds drawn from the DEX (formerly Scotia Capital) Bond Index. The ETF first sold units to the public at $20 each, and began trading on Toronto on February 25, 2009. The fund’s 25 holdings are divided into five staggered, or “laddered,” maturities that generally range from one to five years. Each maturity is equally weighted and includes five or more bonds with a minimum credit rating of “A.” Each year, the two-year to five-year bonds will be a year closer to maturity and one-year bonds will reach maturity. The fund will use proceeds of the matured bonds to “roll over” or buy new bonds that restore the desired one-to-five year portfolio balance....

TD RESOURCE FUND $27.63 (CWA Rating: Aggressive) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario, M5W 1P9. Tel: 1-800-386-3757; Web site:www.tdcanadatrust.ca. No load: deal directly with the bank) invests in companies that its managers see as having strong asset bases, proven management and the ability to internally finance growth. The $195.0-million TD Resource Fund’s top stock holdings mostly have Successful Investor Ratings of “Average” or higher. They include EnCana, Suncor Energy, Talisman Energy, Goldcorp, Yamana Gold, TransCanada Corp., BHP Billiton, Barrick Gold, Husky Energy, Chevron, Marathon Oil and Nexen. TD Resource Fund holds 57.1% of its portfolio in Energy and 38.3% in Metals & Minerals....

Although they are still below their 2007/2008 peaks (with the exception of gold, which is now at record highs), resource prices have steadily risen since the start of this year. Most resource companies still need a continued economic recovery to show further growth. But we think the long-term outlook for global resource demand is bright. Meanwhile, we think you should cut your risk in this volatile sector by sticking with profitable, well-established companies that have asset bases they acquired when asset prices were low. Or, invest in mutual funds that hold those stocks. Here are two resource funds that we rate as Aggressive. They expose investors to two different levels of risk, measured by the stocks they hold. We think both have long-term gains ahead....

BMO DIVIDEND FUND $41.10 (BMO Mutual Funds, 77 King Street West, Suite 4200, Royal Trust Tower, Toronto, Ont., M5K 1J5, Tel: 1-800-665-7700; Web site: www.bmo.com. No load — deal directly with the bank) (CWA Rating: Conservative) holds about 48.5% of its portfolio in the Finance sector. The fund’s next-largest sectors are Energy (23.4%), Consumer Discretionary (5.9%) and Materials (5.0%). The $3.9-billion BMO Dividend Fund’s largest stock holdings are Bank of Nova Scotia, CIBC, Royal Bank, Suncor Energy, Manulife Financial, Toronto-Dominion Bank, TransCanada Corporation, EnCana Corporation, Enbridge and Goldcorp. The fund’s MER is 1.71%....

Tax-loss selling (or tax-loss harvesting) is a strategy for lowering your Canadian capital gains tax that involves selling a security at a loss in order to offset your capital gains. You can then deduct these losses against your taxable capital gains in the current tax year. For example, December 24 is the 2009 deadline for tax-loss selling on the Toronto Stock Exchange. If you sell at a loss on or before that date, you could deduct your loss against your 2009 capital gains. However, you can also carry your loss back for the three previous years (2008, 2007 and 2006), or carry it forward indefinitely to offset past or future capital gains. ...

MANITOBA TELECOM SERVICES $31.45 (Toronto symbol MBT; Shares outstanding: 64.7 million; Market cap: $2.0 billion; SI Rating: Average) has lowered its 2009 earnings outlook. It now expects to earn between $2.60 and $2.90 a share, compared to its earlier forecast of $2.80 a share. The stock trades at 11.4 times the midpoint of the new range. Because of the recession and strong competition from other providers, businesses are buying fewer long-distance and traditional-phone services from Manitoba Telecom. However, the drop is being partly offset by continued strong business and consumer demand for wireless and high-speed Internet services. The weaker earnings forecast increases the possibility that Manitoba Telecom will cut its $2.60 dividend, which yields 8.3%. The dividend now represents a high 95% of the company’s new 2009 earnings forecast....

CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $39 and CU.X [class B voting] $39; Income Portfolio, Utilities sector; Shares outstanding: 125.6 million; Market cap: $4.9 billion; Price-to-sales ratio: 1.8; SI Rating: Above Average) distributes electricity and natural gas in Alberta. It also operates power plants in other parts of Canada, and in the U.K. and Australia. In August, Canadian Utilities received preliminary approval from the Alberta government to build and operate a new high-voltage transmission line between Edmonton and Calgary. Final approval for this project should come later this year. The line is part of a wider plan to make Alberta’s electricity grid more reliable. This new line will cost $1.65 billion, and will probably take several years to complete. To put this in context, Canadian Utilities earned $73.5 million, or $0.59 a share, in the three months ended June 30, 2009....

TRANSCANADA CORP. $33 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 624 million; Market cap: $20.6 billion; Price-to-sales ratio: 2.3; SI Rating: Above Average) operates a 59,000-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. It also owns or invests in 20 electrical power plants. To diversify its operations, TransCanada is building the $12-billion U.S. Keystone pipeline, which will pump crude oil from Alberta’s oil sands to refineries in Illinois. TransCanada has already signed contracts with oil shippers at an average term of 18 years. In total, these deals represent 83% of Keystone’s capacity. The new pipeline’s first phase should start operating early next year. TransCanada plans to extend Keystone to the U.S. Gulf Coast by 2012....

TransCanada and Canadian Utilities are both working on major new projects. Despite the huge size of these undertakings, their overall risk is low. That’s because government regulators will let the companies pass along most of the costs to their customers in the form of higher rates. This should let both firms keep paying their current dividends, or raise them. ATCO owns a majority interest in Canadian Utilities, so it also stands to profit from these projects. As well, Finning should benefit by selling construction equipment and repair services to TransCanada and Canadian Utilities....

PENGROWTH ENERGY TRUST, $10.28, Toronto symbol PGF.UN, fell 7% on Friday after it cut its monthly distribution by 30%, to $0.07 a unit from $0.10. The new annual rate of $0.84 yields 8.2%. Pengrowth wants to conserve cash to pay down its $1.4-billion long-term debt, which is equal to 50% of its $2.8-billion market cap. The distribution cut should save Pengrowth roughly $93 million a year. The trust also wants to spend more on developing its oil and natural-gas properties in western Canada. These have large, proven reserves, so there is little risk in investing in them. The extra cash will also help Pengrowth buy other nearby properties....