Veresen Inc (VSN.TO)

Has pipelines going east and about to have them going west to hook up with Jordan Cove in Oregon, which will be one of the major LNG export facilities. This could be a very interesting potential and he is going to look further into this.

Likes several of the other pipeline opportunities better at this time. They got a little bit of a bump and are now coming back off that. He would prefer AltaGas (ALA-T) on a risk/reward basis. (See Top Picks.)

A kind of stock that is definitely not for the faint of heart. Had massive swings over the last couple of years. Broke up through the $15.50 resistance level in early 2012, which is a good sign. It wouldn’t surprise him, given the profile of the stock and the profile of the markets that it could retrace back to the $15.50 area. For the time being this has higher highs and higher lows.

Has just been granted permission to build an LNG plant in North America. We have to ship natural gas out and LNG will be a main component of those exports.

(Market Call Minute) Does not like it that much. Can’t wrap real numbers around it.

(A Top Pick Jan 15/13. Up 42.37%.) Harder to see a remaining catalyst. The one would be their LNG project which has the potential of moving the stock higher. At this point, he is considering lightening up a little bit and probably won’t be holding it a year from now.

Already passed his target of $14.50. Feels it has really benefited from the US$ being stronger than the Cdn$. Also, payout ratio has improved a lot. 84% in 2014 and 80% in 2015. Benefited from higher propane prices. He sees ethene prices improving in the next few years. Have an option on the Jordan Cove Energy facility, which could add a few dollars per share when that comes.

Energy infrastructure. Likes this area. Quite a high yield in the 7%-8% range. Their suite of assets is really not the best, which is the reason for the higher yield. He has several companies in the same area that he likes better. Given the big yield and that it is fairly sustainable, he wouldn’t see a ton of downside in this stock.

Sold her holdings about a year ago, on concerns about the Alliance pipeline and the recontracting risks. In 2015 all contracts roll off so Alliance and this company have been quite aggressive in trying to get new volumes in place to fill the pipeline. With the amount of liquids coming out of Canada, they are likely to fill it, but her questions are around the economics. Feels that some of the deals they are making in Western Canada would be trading off the economics that they would achieve in Aux Sable and facination unit in order to secure volumes. Not quite sure how this plays out on a cash flow perspective, which gives her concerns about the stability of the dividend. LNG play in Oregon is interesting but is 3^rd or 4^th in line for approval in the US and there is some question about how much export capacity is going to be improved and feels they are right on the cusp.

7% yield. It gets a little muddy, rather than transparent as to what they are going to do. They aren’t getting the return out of businesses they have diversified into. Doesn’t see a reason for a change. Prefers IPL-T

There was a big concern in the market that the 7.3% dividend would not be covered last year. The evidence shows that it will be. He has 84% as an estimated payout ratio for 2014. Trades at 7.2%X 2014 free cash flow yield but, if Alliance re-contracted at today’s rates, it jumps to about 9.4%. Also, investors are getting the free option on the Jordan Cove development. His target is $14.50.

(Market Call Minute.) Have good prospects but a poor power portfolio that holds it back. Oil/gas pipeline assets are marginal.

4.4% Series A (VSN.PR.A-T). This will reset in 2017. He likes it because there is not a lot that come up in 2017. Right now it is trading below the par level at around $23.65 and gives you a current yield of about 4.65% and they yield to reset in 2017 of 4.81%. Bond equivalent interest adjustment would be about 6.7% yield.

8.3% dividend. Attractive upside. Re-contracting of a reliance contract is a concern. If they get their LNG export facility approved it could add a dollar or two to their stock. Distribution is sustainable. The company should have higher cash flow next quarter.

Solid name. Prefers others like IPL.UN-T. One of the concerns is whether their 50% interest in Alliance Pipeline would be re-contracted.