New pipelines brighten their prospects

Article Excerpt

Both TransCanada and Enbridge are building new oil pipelines. These are expensive projects, but the companies’ regulated businesses give them lots of cash flow for expansion and continued dividend increases. TRANSCANADA CORP. $40 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 703.0 million; Market cap: $27.3 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.transcanada.com) operates a pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. It also owns or invests in over 20 power plants in Canada and the U.S. In June 2010, the company opened the first phase of its Keystone pipeline. This phase pumps crude oil from Alberta to refineries in Illinois. The second phase extends to Oklahoma, and began operating in February 2011. The third and fourth phases, called Keystone XL, will pump oil to refineries in Texas. If U.S. regulators approve, TransCanada aims to finish Keystone XL in 2013. The company expects the entire project…