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Calgary-based TransAlta Corp. is an electric utility with operations in the western part of Canada. The company generates power using coal, hydro, gas, geothermal and wind. About 70% of power generated is sold under government mandated long-term contracts. From their corporate site “TransAlta has been in the power business for almost 100 years - our output from more than 50 power plants is more than 8000 Megawatts - enough to power almost 7 Million homes”

TransAlta(TAC) is the only Canadian utility that is part of the S&P ADR Index.

The current dividend yield is an excellent 5.22% and the company has modest growth over the years since it is a utility. Average annual earnings growth over the last 5 years is 7.50% and the profit margin is about 10%. In 52 weeks, TAC is down 39% - which is high compared to other utilities. The P/E of 18.99 is much higher than the industry average of 13.73.

TAC received an acquistion bid from LS Power Equity Partners, an entity associated with Luminus Management LLC, and Global Infrastructure Partners which valued the company at C$39 per share in cash. On August 6th, TAC’s board rejected the proposal saying that the offer undervalued the company. Currently the stock trades at C$25.25 in the TSX - much lower than the offer received back in July.

Compared to some US and European utilities, TransAlta is an average performer over the long-term. However if an investor is looking to invest in a Canadian utility this is one option.

written by David

On August 28, I wrote an article on the Top Canadian Dividend stocks available in the USA as interlisted stocks.Today’s post is an update to that article.

Out of the 37 stocks in the S&P TSX Canadian Dividend Aristocrats Index, there are 11 stocks that are traded in the New York Stock Exchange. The following table and chart lists these stocks with their current yields:

Chart:

Analysis:

Out of the five large banks in Canada, four made it to this list. All the four banks have yields of above 6% with BMO having the highest yield at 10.93%. So far, all four haven’t announced any cuts in dividend rates. However on Nov 18, ScotiaBank announced a writedown of $595 million after tax related to “relating to certain trading activities and valuation adjustments.”. TD has announced that it will have a “trading losses of approximately C$350 million leading to a net loss in its wholesale banking division.”

Fourth Quarter Results - Announcement Dates:

RY - December 5
TD - December 4
BMO - November 25
BNS - December 2

Sun Life Financial Services Canada and Manulife are both insurers. MFC is a good long-term play.Brookfield Properties Corp is a real-estate operator, not a favorite sector now. CNI, CNQ, ENB and IMO all have low dividend yields. They are included in this Aristocrats Index because they have increased dividends in the past 7 years though the dividend rate is still low.

The above 11 stocks had lower yields back in August. As the market has crashed in the following months their yields have risen to current levels. For an investor looking to invest in Canada, these stocks might be good picks to research further.Please bear in mind that dividend payments are not guaranteed and may be cut or suspended at any time.

For a full listing of the Dividend Aristocrats Index click the link below: TSX-Dividend-Aristocrats-Index-Components

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written by admin

Five Canadian Banks trade in the USA as interlisted stocks. These banks have also been impacted by the credit crunch in the past few months.

The following are the dividend yields for the five banks:

1.Company Name: The Bank of Nova Scotia
Ticker: BNS
Dividend Yield : 6.42%

2.Company Name: RBC Financial Group
Ticker: RY
Dividend Yield : 5.54%

3.Company Name: Toronto-Dominion Bank
Ticker: TD
Dividend Yield : 5.60%

4.Company Name: Bank of Montreal
Ticker: BMO
Dividend Yield : 8.28%

5.Company Name: Canadian Imperial Bank of Commerce
Ticker: CM
Dividend Yield : 8.13%

Until so far Canadian banks seem to have weathered the storm pretty well when compared to American or European banks. However some of them have heavy exposure to the US markets. As the market continues to be volatile it is worth keep an eye on these stocks.

written by admin