H&R REIT (TSX: HR-U, OTC: HRUFF) has completed its takeover of Primaris Retail REIT. Primaris has been removed from How They Rate coverage.

PetroBakken Energy Ltd has completed a name change and is now known as Lightstream Resources Ltd (TSX: LTS, OTC: PBKEF). PetroBakken/Lightstream is now trading under the symbol LTS on the Toronto Stock Exchange. The US over-the-counter (OTC) symbol for the stock remains PBKEF.

Poseidon Concepts Corp has de-listed from the TSX. Management has entered an agreement to sell its assets to Rockwater Energy Solutions. Poseidon is now operating under bankruptcy protection in the US and Canada.

There are a number of shareholder suits ongoing against the company. One US law firm participating is Howard G. Smith of Bensalem, Pennsylvania (888-638-4847).

Given how fast this one imploded, no one should get their hopes up for much restitution. But by the same token shareholders have little to lose, either.

Advice Changes

Canadian REIT (TSX: REF-U, OTC: CRXIF)–To Buy @ 44 from Hold. Management announced a 6.4 percent dividend increase, the fourth payout boost in the last 12 months. First-quarter funds from operations per unit were up 6.3 percent.

Cominar REIT (TSX: CUF-U, OTC: CMLEF)–To Hold from Buy @ 26. The diversified real estate investment trust reported that first-quarter recurring funds from operations per unit declined 4.4 percent to CAD0.43 and that occupancy declined to 93.9 percent from 94.6 percent a year ago.

Essential Energy Services Inc (TSX: ESN, OTC: EEYUF)–To Buy @ 2.50 from Hold. The Energy Services outfit reported a 2 percent increase in first-quarter revenue, as gross margins held steady at 31 percent and funds from operations per share were flat at CAD0.24. Utilization for deep coil tubing rigs and service rigs was also steady.

Inter Pipeline Fund (TSX: IPL-U, OTC: IPPLF)–To Buy @ 24 from Hold. Management reported solid first-quarter funds from operations of CAD109.4 million (CAD0.40 per unit), in line with year-ago levels, and announced a plan to convert to a corporation. The company also boosted its dividend by 2.7 percent.

InterRent REIT (TSX: IIP-U, OTC: IIPZF)–To Buy @ 6 from Hold. The residential REIT with properties in Toronto boosted its distribution by 25.5 percent, and financial, operating and leverage metrics for the first quarter were all positive.

Suncor Energy Inc (TSX: SU, NYSE: SU)–To Buy @ 35 from Hold. The major Canadian oil and gas producer announced a new quarterly dividend rate of CAD0.20 per share, up from CAD0.13, taking effect with the June 25, 2013, payment to shareholders of record as of June 4, 2013.

Ratings Changes

Essential Energy Services Inc (TSX: ESN, OTC: EEYUF)–To 2 from 1. The company earns an additional point for having a low payout ratio, on top of low overall debt burden.

Wajax Corp (TSX: WJX, OTC: WJXFF)–To 1 from 2. Management slashed the dividend by 25.9 percent. The first-quarter payout ratio soared to 131 percent, as revenue declined by 6.1 percent to CAD336.3 million, gross profit shrank and expenses rose.

The core of my selection process is the six-point CE Safety Rating System, which awards one point for each of the following. A rating of “6” is the safest:

• Payout Ratio–A ratio below our proprietary industry baseline.
• Earnings Visibility–Earnings are predictable enough to forecast a payout ratio below our proprietary industry baseline.
• Debt-to-Assets Ratio–A ratio below our proprietary industry baseline.
• Short-Term Debt Ratio–Debt due in next two years is less than 10 percent of market capitalization.
• Business Stability–Companies that can sustain revenues during recessions are favored over more cyclical ones.
• Dividend History–No dividend cuts over the preceding five years.

Resources

The following Resources may be found in the top navigation menu at www.CanadianEdge.com:

• Ask the Editor–We will reply to your queries via email or in an upcoming article.
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• Promo Stocks–Guide to the mystery stocks we tease in our promotional messages.
• CE Safety Rating System–In-depth explanation of the proprietary ratings system and how to use it effectively.
• Special Reports–The most recent reports for new subscribers. The most current advice is always in your regular issue.
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