he operator of natural gas pipelines and storage facilities in North America appears on an The operator of natural gas pipelines and storage facilities in North America appears on an MSN Money list of recommended stocks.
North America's shale-gas revolution is driving significant growth opportunities for companies capable of delivering the gas to consumers.
Spectra Energy (SE +0.06%, news) is one such company. It operates more than 22,000 miles of pipelines for natural gas, natural gas liquids and crude oil in the United States and Canada. It has storage capacity for more than 300 billion cubic feet of oil and natural gas liquids.
President and CEO Greg Ebel said in a statement this month that the company sees $25 billion in growth opportunities through the end of the decade.
Among the projects the company is pursuing: a joint-venture with NextEra Energy (NEE -1.52%, news) to build a $3 billion interstate pipeline into Florida for power generation and a 16-mile pipeline that would bring 800 million cubic feet of gas a day into Manhattan's West Village from New Jersey. Spectra Energy is also participating in a $6 billion to $8 billion project to build one of North America's largest pipelines to deliver natural gas from gas-rich northeastern British Columbia to the city of Prince Rupert on Canada's northwest coast, where it could then be exported to Japan, South Korea and China.
Spectra Energy appears on a daily ranking created with StockScouter, an MSN Money tool that 9 or 10 are considered for the list, which is then shortened to exclude stocks with a trading volume below 50,000 shares a day.
To help finance its capital-spending initiatives, the Houston company has unveiled plans to move its transmission and storage assets to a limited partnership.The intent of the deal is to establish its general partner, Spectra Energy Partners (SEP -1.68%, news), as one of the nation's largest pipeline and storage master limited partnerships. Spectra Energy had first announced details of the transfer in June.
Transfer of Spectra Energy's transmission and storage assets to the MLP should be completed by year's end, Ebel said, and it would allow both companies to increase their dividends.
Spectra Energy expects to provide its investors with dividend growth of about 12 cents a year, up from 8 cents a year, after completing the transfer.
Once the transfer is completed, Ebel will be chairman, president and CEO of Spectra Energy Partners. Pat Reddy will continue to be chief financial officer of both companies.
Spectra Energy expects to get about $10 billion in exchange for its transportation and storage assets. Among those assets is Spectra Energy's $1.5 billion stake in the 1,700-mile Express-Platte Pipeline System, an oil-delivery project of Kinder Morgan Energy Partners (KMP +0.47%, news) that begins in Alberta, Canada, and serves North Dakota's Bakken shale-oil deposits. Spectra announced its stake in March.
"Spectra Energy is in the midst of a major capital expansion program with $25 billion in growth opportunities through the end of the decade," Ebel said in his Aug. 6 statement announcing new details on the asset transfer. "That growth is the catalyst to advance our master limited partnership (MLP) strategy which will efficiently fund growth and enhance Spectra Energy's dividend growth."
The company has secured $3 billion in new expansion projects this year, Ebel added. That includes the $2 billion Spectra is expected to contribute to the Florida project. That project will involve construction of a 465-mile pipeline to provide natural gas to Florida Power & Light beginning in 2017 as the company, like utilities around the country, seeks increased use of cleaner-burning and more affordable natural gas..
Read the full StockScouter report for Sempra Energy here.
StockScouter top 10 for Aug. 16 | ||||
Company
|
Sector
|
Dividend yield
|
Forward P/E
|
Scouter score
|
CenturyLink (CTL -0.06%, news)
|
Telecommunications
|
6.4%
|
13.3
|
9
|
Oil and natural gas
|
3.6%
|
15.3
|
9
| |
Apple (AAPL +0.66%, news)
|
Personal technology
|
2.5%
|
11.5
|
10
|
Activision Blizzard (ATVI -0.66%, news)
|
Video games
|
1.1%
|
13.0
|
10
|
AIG (AIG +0.28%,news)
|
Insurance
|
0.8%
|
10.5
|
10
|
Boston Scientific (BSX +1.36%, news)
|
Medical devices
|
N/A
|
20.1
|
10
|
Annaly Capital (NLY +0.09%, news)
|
Mortgage-backed securities
|
13.6%
|
6.7
|
10
|
KeyCorp (KEY +0.16%, news)
|
Banking
|
1.8%
|
12.3
|
10
|
Microsoft (MSFT +0.82%, news)*
|
Software
|
2.8%
|
12.4
|
10
|
NetApp (NTAP +0.14%, news)
|
Data storage
| 1.4% | 14.0 | 10 |
StockScouter beats the market
Here at MSN Money, we think our StockScouter rating system is about as good as it gets when you're trying to decide where to invest.
StockScouter looks for stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the future, based on how those factors have influenced stock prices in the past.
The system assigns each stock an expected six-month return and balances that return against the stock's expected volatility.
Scouter rates stocks on a scale of 1 to 10, and ratings can change daily. Ratings and data in the chart above were current as of this article's publication date.
In addition to the daily top 10 list described above, StockScouter is used by investment research firm Verus Analytics (previously known as the quantitative business unit of Gradient Analytics) to generate a monthly benchmark portfolio of stocks that, refreshed monthly, has outperformed the market since its inception in August 2001.
An investor who began in 2001 by investing in each of the benchmark portfolio's top 10 stocks at the start of the month, selling them at the end of the month and then starting fresh with a new group of 10 stocks, would have generated returns, before trading costs and taxes, of 954% through July 31, 2013.
Writer Jon Markman, at the time a columnist for MSN Money, collaborated with company researchers on the tool.
Markman suggested rolling over the top 10 stocks every six months to hold down trading costs, a strategy that might be a better fit for most investors; that would yield different results, which would vary based on your starting point.
Performance through July 31 | ||||||
Full 50 position portfolio
| ||||||
Index
|
1 month
|
3 month
|
6 month
|
1 year
|
Since inception
|
Average annual return
|
Portfolio
|
7.1%
|
3.3%
|
11.2%
|
23.7%
|
515%
|
16,9%
|
Nasdaq
|
6.6%
|
8.9%
|
15.4%
|
23.4%
|
79%
|
7.0%
|
S&P 500
|
5.0%
|
5.5%
|
12.5%
|
22.2%
|
39%
|
4.0%
|
DJIA
|
9.0%
|
4.5%
|
11.8%
|
19.2%
|
47%
|
4.4%
|
Top 10 portfolio
| ||||||
Index
|
1 month
|
3 month
|
6 month
|
1 year
|
Since inception
|
Average annual return
|
Portfolio
|
6.3%
|
-2.1%
|
3.5%
|
11.3%
|
954%
|
21.4%
|
Nasdaq
|
6.6%
|
8.9%
|
15.4%
|
23.4%
|
79%
|
7.0%
|
S&P 500
|
5.0%
|
5.5%
|
12.5%
|
22.2%
|
39%
|
4.0%
|
DJIA
|
9.0%
|
4.5%
|
11.8%
|
19.2%
|
47%
|
4.4%
|
Inception: August 2001
| ||||||
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