David Burrows is president of Barometer Capital Management. His focus is on North Ameican large caps.
As a leading energy infrastructure company, Altagas is likely to show accelerated cash-flow growth and improved stability with the recent acquisition of natural gas utility Semco. Long term it is likely that dividend growth with accelerate, providing the basis for strong price performance.
As both demand and production volumes of natural gas and liquids in North America increase, Williams stands to see substantial growth in traffic through its pipeline infrastructure assets. Barometer expects to see continued elevated growth in dividends paid to investors.
After a decade-long revaluation of large-cap tech stocks, investors are able to purchase this market leader at an inexpensive 11 times earnings with a 2.5% dividend. Several catalysts in the near term make it likely that investors will get both an accelerated growth in the dividend along with an expanded earnings multiple leading to solid total returns.
Past Picks: March 1, 2011
Gran Tierra Energy
Total return: -40.25%
Total return: -2.62%
Labrador Iron Ore Royalty Corp.
(Note: 2-for-1 split on 6/28/11)
Total Return Average: -14.76%
While many of the more economically sensitive sectors have recaptured portions of the summer decline during the recent rally, it appears that the long-term market leadership theme continues to be more defensive, yield-oriented parts of the market. Slowing economic conditions in Asia and Europe are likely to pose additional challenges to risky assets through the year and investors are likely to continue to favour lower-risk equities that can provide predictable dividend growth.
Compiled by Franklin Cameron, BNN Market Call Tonight