High-Yield Canadian Power Companies: Which Ones Will Safely Maintain a 7+% Dividend Yield?
67 WALL STREET, New York - July 8, 2013 - The Wall Street Transcript has just published its 2013 Oil & Gas Review. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Increasing Demand for Midstream Assets - U.S. Energy Infrastructure Build Out - Emerging Shale Plays - Oil and Gas Transportation Infrastructure Demand - Master Limited Partnerships Distribution Growth - Outlook for Natural Gas Liquids - Low Treasury Yields and MLP Dividends
Companies include: Capstone Turbine Corp. (CPST) and many others.
In the following excerpt from the 2013 Oil & Gas Review, a Canadian high yield expert analyst discusses his investing methodology and top picks:
TWST: What are your favorite names in your coverage and why?
Mr. McIlveen: I'm going to go with what I call the "sleep at night" stocks. Those will be Algonquin (AQN.TO) and Brookfield (BEP-UN.TO). They are the larger ones. Algonquin also has the water and renewable power. Brookfield is by far the largest one. Both have a record of increasing their dividends. For the most conservative investor, those are the two I would suggest.
For the ones who are willing to take a little bit more risk, I would say EnerCare (ECI.TO) and Primary Energy (PRI.TO). The market does not really understand EnerCare, and I think it will over time. It actually has the best credit rating of the group and a low payout ratio. That in itself tells me it should be a $1 or two higher than where it is now.
They also have this other interesting high-growth business, submetering, which is really beginning to take off. What they're doing in that business is going to an existing apartment or condo buildings and retrofitting electricity and water and heating meters to the individual residential unit level. They're also installing them into new builds. Landlords and condo boards like this because it takes the commodity price risk right out of their picture. If I'm renting out an apartment building and in my rent I include electricity and heat and water, when the prices rise on the commodities, by law I'm only allowed to increase my rents annually by what the rental review board says. I have exposure I don't want. Landlords love to take this exposure off their books and get this retrofit done. That is a very high-growth business for them.
Primary Energy uses waste heat to make power. They're essentially almost like a back-end power unit that's taking all the heat from a steel plant for example and then turning that heat into electricity the same way a coal plant would, by burning the coal to make heat and that spins the turbine. Waste heat is found in industries like food, cement, steel or anything that creates a lot of heat - you can put these waste-to-power turbines in there. Primary is sitting on enough cash plus borrowing ability to be able to do a nice expansion without going to the equity market, and that's always nice. I've been waiting for them to do that one.
TWST: With natural gas prices so low, does that cut into the market for waste energy?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
