Buy TransCanada, sell TransAlta

Article Excerpt

TRANSCANADA CORP. $37.22 (Toronto symbol TRP; Shares outstanding: 693.0 million; Market cap: $25.8 billion; TSINetwork Rating: Above Average; Dividend yield: 4.3%; www.transcanada.com) operates a 60,000-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. The company also owns, or has interests in, over 10,900 megawatts of power generation. That includes Bruce Power LP, a nuclear power plant in Ontario, and the Ravenswood facility, which serves New York City. In the three months ended September 30, 2010, TransCanada’s revenue rose 3.9%, to $2.1 billion from $2.05 billion a year earlier. Earnings per share rose 10.2%, to $0.54 from $0.49, due to lower costs and higher production at Bruce Power. TransCanada trades at 17.1 times the $2.18 a share that it should earn this year. The shares yield 4.3%. TransCanada is a buy. TRANSALTA CORP. $21.04 (Toronto symbol TA; Shares outstanding: 219.5 million; Market cap: $4.6 billion; SI Rating: Average; Dividend yield: 5.5%) operates over 85 power plants in Canada, the U.S….