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COMMENT
Markets were up today because a lot of China, India, Europe and even the US Purchasing Manufacturing Indexes were up. This is a sign of economic expansion. This was combined with some year-end window dressing being reversed. Also, you generally find the 1st day of the new year is higher. Europe is still the wild card that needs to be solved and thinks we are in a European recession but North America avoids a recession.
TOP PICK
About 70% oil/gas producer and 30% butane/propane marketing. Nice stable marketing business that just sort of cash flows year in and year out. Good hedges on gas but as they royal off, all the new spending is on oil. Trading at a 10% yield just because no one follows it. Payout ratio is only about 60%.
management
diversified
TOP PICK
Infrastructure is a nice safe way to play growth. You don't have to worry bout any one production play. They are international in all kinds of countries and owns 30% of a toll highway above Toronto as well as a couple of other larger projects. The engineering/construction side is only trading at around 12X earnings. Expect you will see a 20% increase on the stock plus a dividend increase sometime during the year.
contractors
DON'T BUY
Yield of 7.6%. Insurance companies have had the double whammy of low interest rates and poor stock markets. Has been overly discounted. Market feels they are still going to cut their dividend. If you like the stock market, Manulife (MFC-T) has more leverage. He prefers Manulife. This one would be slightly more defensive.
insurance
