Quarterly earnings preview: "Going into this round of quarterly
results, we continue to prefer companies generating relatively
strong cash flows in most economic scenarios, long-term underlying
asset value, reasonable relative and absolute valuations and
manageable external capital market needs (for both equity and fixed
income). Aside from a chase for dividends and income oriented
product, we do not believe the sector will face a significant
multiple expansion or notable near-term upward momentum. Over the
next few years, we believe many companies within the sector are
extremely well positioned for meaningful cash flow, dividend and
Selected specifics: "We continue to believe quarterly results
are not a major driving force for a considerable portion of our
infrastructure universe. Yet, in our view, this earnings season may
provide more insight on a selection of issues for several companies
within our coverage universe, including: (a) an interesting Alberta
power market given the Sundance 1 and 2 outage (Capital Power
(CPX.TO), TransAlat Corp (TA.TO) and TransCanada (TRP.TO); (b)
restructuring and M&A opportunities (Bioxel Phmara Inc.
Brookfield Infrastructure Partners L.P (
), Enbridge (ENB.TO) and Fortis (FTS.TO)); (c) the ongoing
development of North America's crude oil pipeline system (ENB and
TRP); (d) new infrastructure build supporting some large commodity
); (e) dividend appeal with potential for an adoption of cash flow
payout targets (
); (f) direct pension fund investment longer-dated assets; and, (g)
positive credit market conditions for long-dated assets."
Corporate strategy and development a focus: "For most of our
universe, we continue to place little emphasis on the quarterly
results and focus our efforts on incremental information that
either supports or detracts from each investment thesis in this
long cycle infrastructure focused sector."
Potential results release dates include:
Wednesday, July 27th, CPX.
Thursday, July 28th TA and TRP.
Friday, July 29th, Pacific Northern Gas Ltd (PNG-A.TO).
Wednesday, August 3rd BIP and FTS.
Thursday, August 4th BRC.
Friday, August 5th, Emera Inc. (EMA.TO) and Enbridge
Wednesday, August 10th, Brookfield Asset Management
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