Money Reporter, MPL Communications Inc.133 Richmond St.W., Toronto, ON, M5H 3M8. 1-800-804-8846
VERESEN INC.
Veresen is the former Fort Chicago Energy Partners L.P., and is principally invested in the energy infrastructure business. It has interests in two pipeline systems, the Alliance Pipeline and the Alberta Ethane Gathering System; a midstream business with interests in a natural gas liquids; and a power business with renewable and gas-fired facilities and development projects in Canada and the United States.
Natural gas liquids, or NGL, do appear to have a very bright future. People will never use less power, only more. But we see the core of Veresen's business as the pipelines.
Production in the Western Canadian Sedimentary Basin is expected to increase greatly over the next five years, and demand from the U.S. and overseas will surely also rise. Sitting in the catbird seat between the two is Veresen, with its pipelines.
Earnings were higher by 133% in the third quarter, to $0.14 per share from $0.06. In 2012 they declined, to $0.20 from $0.33 per share, so earnings are pretty volatile for a utility.
This update its stock price was $14.30, up 21.08% after also rising into last update. It's also up 18.8% in a year; For now we maintain VSN as a buy.
TSX - VSN: Sector: Pipeline Trusts; Cash Dist. $1.00; Cash-on-cash yield: 6.99%; EPS $0.27; PE 53.0; 52-week high $14.33; 52-week low $11.37; one-year price change +18.8%; www.vereseninc.com
Money Reporter, MPL Communications Inc.133 Richmond St.W., Toronto, ON, M5H 3M8. 1-800-804-8846