transcanada

TRANSCANADA CORP. $37 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 541.0 million; Market cap: $20.0 billion; SI Rating: Above average) owns 31.6% of Bruce Power LP, the partnership that operates the nuclear power facility on the Bruce Peninsula in Ontario....

SNC-LAVALIN GROUP INC. $54 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $8.2 billion; SI Rating: Average) continues to win new infrastructure contracts. It recently received a $300 million contract to build two natural gas compression plants in France. The company will also participate in the construction of a $200 million U.S. hydrogen plant at an oil refinery in California. These are small jobs next to SNC’s annual revenue of about $7 billion, but add to its current backlog of $10.0 billion. SNC now trades at 29.0 times its projected 2008 earnings of $1.86 a share. That’s expensive considering much of its income comes from engineering projects with uneven revenue streams. SNC-Lavalin is a hold....

TRANSCANADA CORP. $38.00, Toronto symbol TRP, and U.S.-based oil producer ConocoPhillips each own half of the proposed Keystone pipeline project, which will transport crude oil from Alberta’s oil sands to the United States. Due to strong interest from oil shippers, the partners now plan to extend the pipeline from the U.S. Midwest to refineries in the Gulf Coast region. They will also expand Keystone’s total capacity. This $7 billion U.S. expansion will increase the total cost of the project to $12.2 billion U.S. TransCanada’s share of that total comes to $6.1 billion U.S., which is equal to 2.4 times its 2007 cash flow of $2.6 billion (Canadian) or $4.93 a share. Keystone will reduce TransCanada’s reliance on its traditional gas pipeline business. The partners aim to complete this extension by the end of 2011....

BCE INC. $39.25, Toronto symbol BCE, gained $4 last Friday after it agreed to stop paying common share dividends as part of a new deal with the consortium headed by the Ontario Teachers’ Pension Plan that plans to buy BCE. The consortium will still pay $42.75 a share for BCE, and aims to close the transaction by December 11, 2008. However, suspending the dividend will save the company about $900 million, and make it easier for the consortium to secure the roughly $35 billion from lenders they need to complete the acquisition. The consortium has also agreed to pay BCE $1.2 billion if it backs out of the deal, up 20% from the original break-up fee of $1 billion. BCE is still a buy....

TRANSCANADA CORPORATION $39.62 (Toronto symbol TRP; SI Rating: Above average) operates a 59,000-km network of natural gas pipelines in Canada and the United States. This business supplies 70% of its profit. The remaining 30% comes from its electrical power operations. In the three months ended March 31, 2008, the company’s revenues fell 4.5%, to $2.1 billion from $2.2 billion a year earlier, due to the temporary shutdown of a power plant in Quebec. However, earnings excluding one-time items rose 30.4%, to $326 million from $250 million. Per-share earnings rose 22.4%, to $0.60 from $0.49 on more shares outstanding. Most of the higher earnings came from the acquisition of pipelines and natural gas storage facilities in February, 2007. The company trades for 17.8 times the $2.23 a share it’s likely to make this year. The shares currently yield 3.6%....

TransCanada Corp.'s annual cash flow is now over $3 billion. That’s letting it continue to invest in new projects to supplement the steady returns from its regulated gas pipeline operations. TRANSCANADA CORPORATION $39.62 (Toronto symbol TRP; SI Rating: Above average) operates a 59,000-km network of natural gas pipelines in Canada and the United States. This business supplies 70% of its profit. The remaining 30% comes from its electrical power operations. In the three months ended March 31, 2008, the company’s revenues fell 4.5%, to $2.1 billion from $2.2 billion a year earlier, due to the temporary shutdown of a power plant in Quebec. However, earnings excluding one-time items rose 30.4%, to $326 million from $250 million. Per-share earnings rose 22.4%, to $0.60 from $0.49 on more shares outstanding....

TRANSALTA CORP. $35.44 (Toronto symbol TA; SI Rating: Average) operates 50 power plants, in North America and Australia. TransAlta continues to take steps to increase shareholder value. That’s partly in response to pressure from activist U.S. shareholder Luminus Management, which owns roughly 8.4% of TransAlta’s shares. The company recently sold its Mexican assets for $304 million, and will use most of the cash to buy back stock. It also recently increased its dividend for the first time since 1999. The current rate of $1.08 a share, up 8% from $1.00, yields 3.1%....

NOVA CHEMICALS CORP. $28 (Toronto symbol NCX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 83.1 million; Market cap: $2.3 billion; SI Rating: Extra risk) has formed a joint venture with Reliance Industries Ltd. This new company will design and build energy efficient buildings in India, using construction components supplied by Nova. This alliance gives Nova an easy way to profit from India’s booming construction market. Nova Chemicals is a buy. GREAT-WEST LIFECO INC. $32 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 894.1 million; Market cap: $28.6 billion; SI Rating: Above average) earned $0.73 a share in the three months ended March 31, 2008, up 25.9% from $0.58 a year earlier. If you exclude two unusual gains, Great-West’s earnings would have grown 3.4% to $0.60 a share in the latest quarter. Unfavourable foreign exchange rates also lowered Great-West’s most recent quarterly profits by $0.05 a share. Revenue jumped to $18.0 billion from $6.9 billion due to last year’s purchase of U.S.-based mutual fund manager Putnam Investments Trust....

UNITED CORPORATIONS $62 (Toronto symbol: UNC) (165 University Ave., 10th Floor, Toronto, ON M5H 3B8. 416-947-2583. Buy or sell through a broker) invests in a wide variety of average-quality to above-average quality Canadian and foreign stocks. At last report, 35.3% of the fund’s $1.0 billion portfolio was invested in Canadian equities, 23.7% in the U.S., 20.2% in Europe, 6.3% in the UK, 12.5% in Asia and 1.0% in Mexico and Latin America. The fund’s largest holdings included Bank of Nova Scotia, Royal Bank of Canada, Manulife, Talisman Energy, Algoma Central Corporation, Nexen, TransCanada Corporation, Pfizer Inc., TD Bank and Chevron....

TRANSCANADA CORP. $37.50, Toronto symbol TRP, owns 50% of Broadwater Energy, a joint venture with Royal Dutch Shell, which hopes to build an offshore liquefied natural gas terminal in Long Island Sound. However, New York State and New Jersey have rejected the proposal. Broadwater now plans to appeal to the U.S. Commerce Department. The decision forced TransCanada to write off the $27 million it has already spent on the Broadwater project. If you exclude all unusual items, TransCanada’s earnings in the three months ended March 31, 2008 still rose 30.4%, to $326 million from $250 million a year earlier. Per-share earnings grew 22.4%, to $0.60 from $0.49, on more shares outstanding. Most of the higher earnings came from the acquisition of pipelines and natural gas storage facilities in February 2007. However, overall revenue fell 4.5%, to $2.1 billion from $2.2 billion, due to the temporary shutdown of a power plant in Quebec. TransCanada is a buy....