Over the past week, the last four Canadian Edge Portfolio recommendations to report numbers have done so. The good news is, like virtually all of the trusts and companies that turned in results previously, this quartet came in with generally positive news.

The best numbers belonged to Artis REIT (TSX: AX-U, OTC: ARESF), the owner of a rapidly growing portfolio of properties in Canada’s energy patch. The REIT continued to reap the reward of its aggressive strategy, posting a 57.3 percent jump in second quarter revenue over year-earlier totals, keying a 20.6 percent increase in distributable income per share.

The underlying numbers were even more attractive. Net operating income (NOI)–a measure of the profitability of properties–rose 63.2 percent. Meanwhile, NOI from properties owned at least one year rose 9.1 percent, indicating management has been able to boost occupancy and rents while controlling costs. Debt-to-book value, the key measurement of balance sheet strength, fell below 50 percent. Finally, the payout ratio dipped to just 62.5 percent, enabling the REIT to boost its distribution by another 2.9 percent.

Artis’ concentration in the energy patch does make it more dependent on that sector’s good health than my other REIT selections. Management, however, continues to increase its resistance to a downturn by boosting scale, controlling costs and even with timely sales of pricey properties, such as the unloading of two in Calgary that netted an additional 20 cents a share in earnings–not included in funds from operations (FFO) or the current payout ratio. Moreover, Artis is still quite cheap, particularly compared to US REITs, with a yield of nearly 7 percent. Artis REIT is still a buy up to USD18.

Canadian Apartment REIT’s (TSX: CAR-U, OTC: CDPYF) growth numbers were a bit lower than Artis’ but nonetheless robust. Revenue grew 10.5 percent, as the trust enjoyed the benefit of several successful acquisitions as well as growth in rents (up 3.7 percent portfolio wide) and occupancy at previously owned properties (98.2 percent). Management also effectively controlled costs as NOI margin rose to 56.4 percent from 55.5 percent a year earlier. Operating expenses as a percentage of revenue fell to 43.6 percent from 44.5 percent a year earlier.

The overall result was a 13.5 percent boost in distributable income. A 10.1 percent boost in outstanding shares issue to finance growth took the per-share tally to just 3.3 percent. That was enough, however, to cut the payout ratio to just 80.5 percent. Moreover, REIT acquisitions typically bring the costs up front and the benefits later on.

Canadian Apartment’s portfolio has grown rapidly in the west in recent years, which has boosted growth. The bulk of its holdings, however, are still in the east, which gives it a solid degree of insulation against the ups and downs of the energy patch. Coupled with the 6.7 percent yield–which management continues to increase modestly each year–that makes a strong case for buying Canadian Apartment REIT up to USD20 for those who haven’t already.

Shifting to the energy patch, Advantage Energy Income Fund’s (TSX: AVN-U, NYSE: AAV) contained few–if any–surprises. FFO per unit surged to 74 cents Canadian from 54 cents a year earlier, as the trust boosted production 13 percent and enjoyed a sharp rise in realized selling prices for its gas-weighted output. That outweighed the 20.8 percent increase in outstanding shares, which were used to finance management’s aggressive acquisition plan. And despite a boost in overall debt, the debt-to-cash flow ratio fell to just 1.3, the lowest level in Advantage’s history.

Like all oil and gas producer trusts, this one’s cash flows and financial health depend heavily on energy prices. And despite these results, Advantage remains one of my more leveraged plays, along with Paramount Energy Trust (TSX: PMT-U, OTC: PMGYF).

The second quarter average realized selling price of CAD9.18 per thousand cubic feet (mcf) is likely to be closely matched by third quarter selling prices, thanks to the trust’s systematic hedging and the higher prices that prevailed earlier in the quarter. Moreover, the payout ratio is now under 50 percent, which provides a great deal of cushioning from a more pronounced decline in gas prices. Also, the trust hasn’t raised its distribution yet from the level it was able to pay when gas was scraping along at $5.

All that increases my confidence the dividend will hold, regardless of the near-term turmoil in energy prices. But investors should be aware that market perception is what sets share prices in the near term, and this trust has been particularly volatile in the past. Advantage Energy Income Fund is still a buy up to USD14, but only for those willing to live with the ups and downs for the promise of a return to the high teens in coming years. This trust is also a good takeover candidate.

The last trust to report second quarter earnings was diversified power generator and water waste processor Algonquin Power Income Fund (TSX: APF-U, OTC: AGQNF). The numbers were consistent with those of prior quarters, with distributable cash flow from operations roughly covering the distribution, and management affirming the current rate for at least the rest of the year.

Revenue increased 16.4 percent, boosting overall operating profit by 6.4 percent. Generation results were solid on strong plant performance and the waste processing business saw a 60 percent increase in volumes.

As has been the case the past few quarters, Algonquin’s Canadian dollar cash flows were crimped by the weakness in the US dollar. More than two-thirds of cash flow is currently derived from operations south of the border. These won’t be subject to the 2011 trust tax, but they are impacted by US dollar weakness. The trust offsets this with hedging as well as by financing them with US dollar debt. The situation should be helped in the third quarter, as the slip in the Canadian dollar will boost US dollar revenue.

The high payout ratio–which is after maintenance capital expenditures and includes accounting adjustments–is always a cause for caution in my view. The basic stability of this infrastructure trust’s business allows for such a high level, however, and it’s basically a matter of management’s choice rather than a warning of weakness. Last month, the trust completed a deal with Highground Capital that will boost its stake in several profitable power plants, hardly a sign of an eroding business.

The bottom line is Algonquin’s underlying business is holding up well to the stress tests of a weakening US economy, rising raw materials prices—power plant fuel costs are passed on in rates—and tight credit markets. Now trading at basically book value and double-digit yield, Algonquin Power Income Fund trust is a buy for those who don’t already own it up to USD9.

The most important point about second quarter results for Canadian Edge recommendations is—with the exception of now sold Arctic Glacier (TSX: AG-U, OTC: AGUNF) and still holding GMP Capital (TSX: GMP-U, OTC: GMCPF)—they’re not yet feeling the bite of the US recession. They’re also standing up well to rising raw material costs and tight credit markets.

That, of course, didn’t prevent our oil and gas producer trusts from getting shellacked in July, giving back a good chunk of the gains they scored this year in the wake of surging natural gas prices. It didn’t prevent the extreme volatility in trusts with solid businesses such as Atlantic Power Corporation (TSX: ATP-U, OTC: ATPWF) and Yellow Pages Income Fund (TSX: YLO-U, OTC: YLWPF). And it didn’t prevent several blue chip trusts from actually losing ground the very day they reported very strong earnings.

What it does mean is this: As long as our trusts keep reporting strong numbers, they’re going to keep paying their big distributions. In fact, as we saw with well over half the portfolio—particularly AG Growth (TSX: AFN-U, OTC: AGGRF) with its 21.4 percent boost and the 40 and 30 percent hikes at ARC Energy Trust (TSX: AET-U) and Daylight Energy Trust (TSX: DAY-U, OTC: DAYYF), respectively—many are going to keep increasing those distributions.

Distributions have always been the key to trusts’ share prices in the long haul. This bear market will continue to wreak havoc on a daily basis as long as it lasts. But when the dust clears, trusts that maintain or better increase distributions are going to rally like there’s no tomorrow, wiping out whatever losses appear now.

My strategy in Canadian Edge is to focus exclusively on bringing such trusts and high paying corporations to your attention. As long as this bear market is on the rampage, I can’t promise we won’t have more Arctic Glaciers, which require we sell in order to avoid the risk of a further blowup. But I’m very encouraged by the second quarter results.

The longer our favorites hold up to the stress tests, the less chance they’ll stumble before the bear market ends and the better the odds they’ll lead the inevitable recovery. Meanwhile, we can enjoy the biggest and most stress-tested dividends in the world.