There’s no better proof a company can weather future turmoil in the economy and markets than solid business performance during a crisis.

And there’s no better recent example of the latter than the debacle of 2008, the worst deflationary shock to the world since the Great Depression of the 1930s.

As stocks both of this month’s Best Buys–Conservative Holding RioCan REIT (TSX: REI-U, OTC: RIOCF) and Aggressive Holding Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF) did lose ground in the second half of 2008.

In US dollar terms RioCan dropped 42.5 percent between Jun. 30, 2008, and Dec. 31, 2008. Crescent Point, meanwhile, fell 63 percent to its eventual low of USD14.50 on Dec. 5, 2008.

But both companies shone brightly as businesses during the crisis. That RioCan would be able to maintain its dividend with a combination of conservative financial and operating policies should not have surprised even the most panicky of investors.

Crescent Point’s ability to hold its payout even while rivals were sliding towards bankruptcy, however, was truly impressive given the crash in energy prices.

Meanwhile, rather than retreat behind secure castle walls both companies immediately set to work to take advantage of emerging values to build future prosperity.

As a result the stocks were among the first to recover when the markets finally bottomed in March 2009. By mid-2009 RioCan was nearly back to its pre-crash level and a year later had roared out to a new all-time high. Crescent Point, meanwhile, bounced back even faster after announcing it would convert to a corporation without cutting its dividend.

Those rapid recoveries further enhanced both companies’ ability to finance expansion, adding high-priced equity capital to extremely low borrowing rates. Crescent Point was able to double and double again in size by offering its shares in acquisitions.

RioCan’s only problem became deploying its capital fast enough in quality properties, as initial unwillingness of many property owners to sell following the crash forced management to be patient.

Carrying heavy cash balances on its books in fact also stalled the REIT’s ability to raise its distribution in recent years by keeping payout ratios above management’s comfort level. The good news for RioCan is those days are now behind it, as deployed funds are now producing surging cash flow, along with reduced leverage and payout ratio.

Third-quarter funds from operations (FFO) rose 19 percent to a record CAD115 million. FFO per unit, meanwhile, surged 8 percent to CAD0.40, pushing the payout ratio to its lowest level in several years at 86 percent.

The property portfolio is still extremely high quality, with the company’s shopping centers’ occupancy hitting 97.3 percent. That includes newly acquired properties as well as those under construction, which will lift cash flow going forward. Canadian properties renewed leases at an average rent increase of 12.9 percent, an acceleration from the 7.2 percent average boost in the third quarter of 2011. Portfolio-wide lease retention is 88.8 percent of expiring leases for the past 12 months.

RioCan still follows the portfolio rule of ensuring national “anchor” tenants occupy all of its facilities.

And it also never allows any one tenant to contribute more than 5 percent of overall revenue, ensuring its fortunes against the kind of high profile disasters that typically accompany a crisis.

Those are timeless rules that have kept the REIT’s head well above water no matter what was happening in the wider world and continue to do so today.

Management also showed its ability to take a profit last quarter, dissolving its joint venture with Cedar Realty Trust Inc (NYSE: CDR) in the US by acquiring 100 percent of 21 properties at the price of disposing of its 80 percent interest in one of them.

The REIT also completed three acquisitions–two in Canada, one in the US–for an average price of CAD369 million. Full-year purchases are now expected to come in at CAD900 million.

The company has 25 properties in the northeastern US totaling 5.3 million square feet in eight states and a healthy pipeline of ongoing and prospective deals on both sides of the border.

Its venture with Tanger Outlets in Canada took another step forward last month, acquiring two centers in the Montreal area at an expected aggregate purchase price of CAD94.7 million. RioCan provides development and property management services to the venture, while Tanger provides leasing and marketing services.

RioCan’s financing costs, meanwhile, remain extremely low, with the company able to issue equity at a unit price within a stone’s throw of its all-time high. As for debt, the REIT obtained CAD233 million of fixed-rate mortgages during the third quarter at an average weighted interest rate of just 3.2 percent for an average term of 5.7 years.

During the REIT’s third-quarter conference call CEO Edward Sonshine responded to a question about debt and dividends by stating RioCan was “totally committed” to keeping an investment grade rating by cutting debt. But he also affirmed that he “fully expected” to also be “in a position to recommend an increase to the distribution” later this year.

That’s the most bullish news on that subject to date. And coupled with the relentless improvement in results and the REIT’s secure franchise and balance sheet, it’s enough for me to raise RioCan’s buy target to USD28 for the first time. Note the REIT draws points all six ratings criteria under the Canadian Edge Safety Rating System.

As for Crescent Point, its third-quarter headline earnings did drop due to hedging losses. But on the more important metrics of profitability it posted another powerful quarter amid less than ideal circumstances.

Funds from operations rose 27 percent–4 percent including share issues to finance future growth–and covered the dividend securely with a 62 percent payout ratio. That was down from a 64 percent ratio a year ago.

Energy producers build long-term value for shareholders by ramping up production and reserves. And Crescent continued to measure up on both counts.

Average daily production of crude oil and natural gas liquids (90 percent of output) surged 37 percent, while the company also pumped out 43 percent more natural gas. Overall it achieved a third quarter record for output and is on track to set a fourth-quarter high this year as well.

Crescent Point would have grown profits a lot more this year if energy prices had been stronger. But rising production did more than offset a 7 percent drop in realized selling prices for liquids and a staggering 38 percent decline in the take for selling gas. Even a 19 percent rise in operating expenses per barrel of oil equivalent was nearly offset by lower Crown royalties and transportation expenses.

As for building future value, Crescent continues to pursue new liquids opportunities in Canada utilizing shale technology.

And it’s now entering the US for the first time to do the same thing, with an acquisition of light oil in the Uinta Basin of northeast Utah.

That deal will add 7,800 barrels of oil equivalent a day in current output as well as 270 net sections of land at the center of the resource play for further light oil development.

Crescent Point is also developing rail facilities to better ship oil from its Bakken properties, which are still underserved by energy midstream infrastructure.

That’s dramatically improved cost dynamics for the company, which should enable it to keep margins high even if oil does back off a bit more.

The company has also protected cash flows by hedging 54 percent of its projected 2012 output remaining as well as 35 percent for 2013, 17 percent for 2014 and 3 percent for 2015. Average hedge prices are CAD88 to CAD94 per barrel.

As for the balance sheet, net debt remains subdued at just 1.0 times annualized cash flow, and there are no maturities before the end of 2013. Although the Uinta Basin deal is being financed with cash, the company continues to demonstrate its ability to use equity to complete mergers without making big cash outlays.

No oil and gas producer is wholly immune from energy price ups and downs. And despite its great advantages Crescent Point management appears to be taking a generally cautious view for the rest of 2012 and beyond. Given that and the fact that the company did not raise its dividend even in early 2008 when energy prices were surging makes it unlikely we’ll see a dividend increase soon.

On the other hand, this is a fast-growing energy company that pays a dividend of more than 7 percent at its current price. That’s exceptional value even in a flat to down-trending market for energy, which won’t last long at all once global growth starts to revive.

Crescent Point now sells for nearly USD10 below my buy target of USD48 and is a strong buy for those who don’t already own it.

What can go wrong at these companies? The obvious potential hurdle for Crescent Point is a possible drop in energy prices, as would likely occur if the US heads off the fiscal cliff and the global economy is plunged into recession.

Crescent Point did make it through 2008 without cutting its dividend, even as the price of its main product, oil, fell from over USD150 a barrel to barely USD30 in a matter of months.

And its solid third-quarter numbers indicate it has a lot of potential cushion from a future price drop.

That didn’t prevent the stock from suffering a steep decline in late 2008, however, as it fell from over USD40 to a low of USD14 on Dec. 8 before beginning a sharp recovery.

Although I don’t expect anything of the sort going forward, it’s a safe bet we will see quite a bit of volatility if the panic level starts to rise.

Of course, a dividend cut would wreak havoc on any company in a hurry. But Crescent Point’s solid production position and conservative financial management ensure things will have to deteriorate a lot before that’s a real possibility.

And given the record in 2008, it’s going to take a mighty blow to bring down Crescent Point.

As for RioCan, it’s a considerably larger company than it was the last time the Canadian real estate market really shut down more than a decade ago. And it’s a good bit bigger than it was in 2008, thanks to all of those acquisitions the past few years.

Greater size and reach does mean more complexity and therefore potential for mistakes to be made. But RioCan still follows those conservative principles that have enabled it to thrive while others have floundered.

That’s apparent in its third-quarter numbers, large and small. Moreover, the trend for revenue, efficiency and dividend coverage is definitely up–arguably a good sign that RioCan is in better shape to weather challenges now than it’s ever been.

For more information on Crescent Point Energy, go to How They Rate under Oil and Gas. RioCan REIT is tracked under Real Estate Trusts. Click on their US symbols to see all previous write-ups in Canadian Edge and Maple Leaf Memo.

Click on the Toronto Stock Exchange (TSX) symbol to go to their Google Finance pages for a wealth of information, ranging from news releases to price charts. Click on their names to go directly to company websites.

Both of these companies are in the larger capitalization category. Crescent Point is now a CAD13.6 billion company after a steady string of mostly equity-financed acquisitions the past few years.

RioCan REIT is one of the few Canadian REITs that compare in size to US REITs, with a market capitalization of CAD7.9 billion. Consequently there’s plenty of liquidity on both sides of the border for these stocks, both in TSX and their US over-the-counter (OTC) listed symbols.

Research houses on both Bay Street and Wall Street also decently cover them. Crescent Point has 16 followers, with a current buy-hold-sell line of 11, four and one. RioCan has 10 followers, three of which rate it “buy,” with seven “holds” with no “sells.” That means plenty of visibility for both companies.

As is the case with all stocks in the Canadian Edge coverage universe, you get the same ownership whether you buy in the US or Canada. These stocks are priced in and pay dividends in Canadian dollars. Appreciation in the loonie will raise dividends as well as the value of your shares.

Dividends of both companies are 100 percent qualified for US income tax purposes, though note that unless there’s a compromise in Washington dividend taxes will be assessed at your regular rate starting in January.

Crescent converted from an income trust to a corporation in 2009. RioCan is a real estate investment trust and still doesn’t pay corporate income tax.

Canadian investors enjoy favorable tax status for both companies, though Crescent Point is taxed differently than RioCan. For US investors dividends paid by Crescent Point into a US IRAs aren’t subject to 15 percent Canadian withholding tax, though they are withheld from at a 15 percent rate if held outside of an IRA.

Dividend taxes withheld from US non-IRA accounts can be recovered as a credit by filing a Form 1116 with your US income taxes. The amount of recovery allowed per year depends on your own tax situation. RioCan is withheld 15 percent whether held inside or outside an IRA.