Feature Article

Canadian Power Players

By Roger S. Conrad
Thursday, July 03, 2008

Steadily rising demand for electricity has translated into rising sales for Canadian power companies. Coupled with abundant natural resources, that adds up to increasing cash flow for providers and higher yields for the income trusts that produce power.
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High Yield Of The Month

High Yield of the Month

By Roger S. Conrad
Thursday, July 03, 2008

This month's High Yielders are Atlantic Power Corp and Provident Energy Trust.
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Portfolio

The Second Half

By Roger S. Conrad
Thursday, July 03, 2008

Although some Canadian trusts continue to outperform, business trusts have been below par of late. Former highfliers have retreated into the red, losing ground seemingly daily. However, all hope isn't lost as our winners outnumber the laggards overall.
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Tips On Trusts

Tips on Trusts

By Roger S. Conrad
Thursday, July 03, 2008

Two trusts have been added to the Dividend Watch List, Yellow Pages continues to prove why it's a solid buy, and we provide an introduction to the wireless spectrum auction up north.
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Canadian Currents

Canada and the Commodity Super Cycle

By David Dittman
Thursday, July 03, 2008

Canada rebounded from negative GDP growth in the first quarter, posting a 0.4 percent increase for April. And its economy could prove surprisingly resilient in the face of the US slump, as long as global commodity prices remain robust. more

In Brief

Best and Worst of Times

By Roger S. Conrad
Thursday, July 03, 2008

Five more oil and gas producer trusts boosted dividends at double-digit rates last month. For ARC Energy Trust  (TSX: AET.UN, OTC: AETUF), that makes a total of 40 percent in two months, extraordinary for a trust run for long-term sustainability and stability.

Rising dividends go hand in hand with the rough doubling in oil and gas prices over the past year. And trusts are benefiting even more by using their cash windfall to slash debt and boost capital spending, both to develop properties and make acquisitions.

The good fortunes of the energy patch extend to other resource businesses as well. We sold metallurgical coal producer Fording Canadian Coal (NYSE: FDG, TSX: FDG.UN) when it became a momentum stock. But the resource producers highlighted in the May Feature Article, Building Growth, are also doing well. That includes Labrador Iron Ore (TSX: LIF.UN, OTC: LBRYF), which tripled its payout last month when its operator Rio Tinto secured a 90 percent gain in global iron ore prices.

Overall, Canada’s economic growth is flat this year. But as this month’s Canadian Currents makes clear, that has a far different connotation than it would in the US. The country is still running at close to full employment. There’s no mortgage crisis sinking the financial system, and the consumer sector and property market (see the June Feature Article, Real Values) are still generally healthy. Rather, slower growth means less inflation pressure and more room for growth later on.

Unfortunately, it’s definitely the worst of times for some sectors of the Canadian economy. On a family trip to Quebec last month, I noticed very few US license plates. That observation gibes with the numbers showing weaker US tourism in the face of a slowing US economy, surging energy prices and rising Canadian dollar exchange rate in recent years.

Those three factors are the greatest danger to the fortunes of Canadian trusts and corporations as we move into the second half of 2008, within and without the hospitality sector. The ability of management to navigate them will determine how safe dividends are and where share prices go for the rest of the year.
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