Japan’s natural disasters and Middle East North Africa (MENA) political turmoil have taken over the headlines in the financial press in recent days. And that’s no wonder, given the potential magnitude of the ripple effect from each crisis.

The overall market mood is again deeply fearful. And the selloff effect has been felt on a range of stocks across the board, including Canadian Edge recommendations.

At this point there are still too many unknowns to say with certainty what the impacts of these crises will be on our favorite companies. Fear of nuclear power is bound to remain acute in coming months, even if Japan is able to avoid the worst at its four crippled reactors.

As we have no nuclear exposure in CE Portfolios, that won’t affect any of our companies negatively. Moreover, it’s bound to benefit producers of natural gas and the midstream companies that bring it to market, particularly to electricity producers.

Similarly, turmoil in the MENA is unlikely to settle down soon, even if the dictator Qaddafi is able to vanquish the rebellion in eastern Libya. That too is a plus for natural gas companies, provided they can tap into the trend of rising demand volumes–see the March Feature Article–and that they’re not too financially dependent on gas prices.

On the other hand, the extent of the human tragedy in Japan is only beginning to unfold. Leaving aside the immediate toll on human life and the potential damage from leaking radiation, the interruption in production from the world’s No. 3 economy is bound to have an impact on global economic health down the line.

Whether that’s inflationary or deflationary remains to be seen, but in either case it should mean less growth. And that’s also the likely upshot from higher oil prices resulting from Middle East conflict. In the absence of wage pressure, as we had in the 1970s, rising prices won’t bring inflation but rather will take money out of people’s pockets, and that’s bad for the economy.

As I’ve pointed out before, our CE picks have proven their ability to weather a severe economic blow. That’s clear from their rapid recovery from the 2008-09 collapse and the record returns we’ve seen the last couple years.

They’ve also used the last couple years of historically favorable corporate borrowing rates to refinance virtually all debt due the next two years at lower rates. That limits their exposure to another credit crunch, and further bullet-proofs them against economic fallout from the crises in Japan and the MENA.

This doesn’t mean we won’t see price volatility in the coming weeks. In fact the longer this goes on, the more likely it will be on the downside. But it does mean that our job is still to look at individual companies’ results. That’s where we’ll find the answers on whether they’ll succeed or fail in 2011, come what may for the market and the economy.

With two weeks to go in the first quarter of 2011 we won’t have long to wait for a new round of numbers to let us know where things are going. Despite the global turmoil, prognosis looks solid for our Portfolio picks based on fourth-quarter 2010 numbers, developments we’ve seen, economic data reported and management statements on guidance in the various fourth quarter earnings conference calls as well as subsequent appearances and events.

That’s also true of the three companies that reported since my last Flash Alert: Ag Growth International (TSX: AFN, OTC: AGGZF), Macquarie Power & Infrastructure Corp (TSX: MPT, OTC: MCQPF) and Parkland Fuel Corp (TSX: PKI, OTC: PKIUF). I review their results below, and I’ll have more detail in the April CE.

Here are earnings announcement dates for Portfolio Holdings still to reveal numbers. I’ll have a Flash on them next week and further analysis of all How They Rate companies in the April issue.

• Atlantic Power Corp (TSX: ATP, NYSE: AT)–Mar. 21
• IBI Group Inc (TSX: IBG, OTC: IBIBF)–Mar. 21
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–Mar. 23

Ag Growth’s fourth-quarter headline earnings per share were off on higher expenses, offsetting a 17 percent boost in revenue. As is often the case for this company, however, the headline is misleading. More important was a boost in cash flow, as well-timed acquisitions and better results in the US offset a weaker environment in Canada due to adverse weather. Cost increases, meanwhile, were driven in large part by acquisitions, which have put backlog at a record level and laid the groundwork for faster growth.

Revenue was also negatively impacted by the drop in the US dollar versus Canada’s loonie, though that was offset by natural hedging of having operations south of the border. Gross margins remained robust at 40 percent, demonstrating management’s ability to continue squeezing efficiencies out of the business.

Meanwhile, demand for commercial grain handling equipment looks strong once again in 2011, which should ensure a strong year of revenue growth ahead even as expenses come in lower.

On a funds from operations basis, Ag Growth’s payout ratio remains a very low 50 percent, which, coupled with likely cash flow growth, promises more dividend growth ahead.

Off a bit in the recent global turmoil and again yielding over 5 percent, Ag Growth International is a buy up to USD50 for those who don’t already own it.

Macquarie Power & Infrastructure Corp shares have also slipped a bit since the company announced fourth-quarter and full-year 2010 results. Like Ag Growth, however, the drop looks related to overall market conditions rather than any events at the company.

The company’s power plants–which now comprise essentially all of its business–performed at 97.5 percent of capacity, up from 95 percent last year. That keyed a 6.8 percent boost in revenue and a 10.7 percent increase in cash flow, adjusted for one-time items.

The all-important payout ratio came in at 77.7 percent of distributable cash flow in the fourth quarter and 91 percent for the full year. That was down from 81.2 percent for the fourth quarter of 2009 and 106 percent for that year. The drop is mostly related to the pre-conversion dividend reduction made at the start of 2010, but it also demonstrates the company has adjusted to life as a corporation and that the current dividend rate is very sustainable thereafter.

Like Atlantic Power Corp (TSX: ATP, NYSE: AT)–which will report fourth quarter results next week–Macquarie P&I has issued dividend guidance setting a date to which it can hold the current level in a worst case. For Macquarie P&I that’s out to 2015, and like Atlantic’s that’s a date that will be extended as the company adds new cash-generating projects. The newest of these are a solar power farm that will sell its output to the Ontario Power Authority beginning in mid-2011 and a Swedish district heating asset that will add to income when it closes this spring.

This represents some of the investment funds that became available with the sale of the company’s stake in Leisureworld retirement communities. And thanks to the company’s connection to Macquarie Group Ltd (Australia: MQG, OTC: MQBKY) it has a wide reach with which to add even more projects.

The biggest risk here is what price management can renew the Cardinal Power Plant’s power sales contract in the next few years. But the plant is running well and prospects look solid for future sales. Buy Macquarie Power & Infrastructure up to my target of USD9.

Parkland Fuel Corp, in contrast, encountered generally positive investor reaction to its release of fourth-quarter and full-year 2011 earnings this week. The reason was probably mostly low expectations, but the numbers were also quite encouraging.

Fourth-quarter commercial volumes more than doubled across the board from last year’s levels, reflecting successful integration of the past year’s acquisitions. So did revenue and gross profit from fuel sales, both in raw dollars and on a cents per-liter basis. The latter is quite bullish, as it indicates margins, which dogged the company for most of the year, are improving as well.

The company expects even further sales growth this year as well as margin improvement, thanks in part to synergies from recent mergers that management states are running “ahead of schedule.” Gains were reported at both retail-focused and commercial-focused divisions. The company also reports progress transitioning more volatile parts of its business to a “commission” basis, thereby making it more fee-based and therefore stable.

The upshot is vastly improved dividend coverage. The fourth-quarter payout ratio fell to just 58 percent of distributable cash flow–still the account from which management will pay dividends as a corporation–from 102 percent a year ago. The full-year payout ratio was 87 percent, above last year’s 76 percent but well below where the ratio had been for most of 2010. Those ratios were also based on the pre-conversion distribution rate and so will fall further in 2011, based on the current rate.

Parkland Fuel Corp and its 8.5 percent dividend look solid going forward; the stock is a buy up to USD13 for those who don’t already own it.