Oilfield services firms are seeing new growth from old wells. As volumes of waste and completion fluids rise in mature Western Canada plays, Secure Energy Services (TSX: SES, OTC: SECYF), which we’re adding to How They Rate coverage this month, is growing by helping customers find environmentally friendly ways to dispose of it.

Secure claims 13 percent of the Western Canadian Sedimentary Basin treatment and disposal business and sees that as a primary growth market. We initiate coverage of Secure Energy with a hold rating.

We’re in the process of evaluating members of the coverage universe based on a combination of low market capitalization, low daily trading volume on the Toronto Stock Exchange and in the US and, most importantly, for those that aren’t paying a dividend at present, whether there’s a reasonable likelihood of ever doing so in the near future.

This is part of an effort to streamline our focus on companies with a realistic opportunity to build wealth for investors for the long term, keeping in mind too that part of the rationale for building a coverage universe is to provide context and comparison.

With all this in mind, barring any objections from readers, which you can express via our “Stock Talk” feature at www.CanadianEdge.com, we will begin paring the ranks next month.

Early candidates for removal from How They Rate coverage include:

• Armtec Infrastructure Inc (TSX: ARF, OTC: AIIFF) pays no dividend and has a market capitalization of just CAD56.3 million.
• Imvescor Restaurant Group Inc (TSX: IRG, OTC: IRGIF) discontinued its dividend in March 2011 and has a market capitalization of just CAD79.8 million.
• Lanesborough REIT (TSX: LRT-U, OTC: LRTEF) hasn’t paid a dividend since March 2009, and its market cap is just CAD12.1 million.
• Tree Island Steel Ltd (TSX: TSL, OTC: TWIRF) pays no dividend and has a market cap of CAD15.5 million.
• Tuckamore Capital Management Inc (TSX: TX, OTC: NWPIF) pays no dividend and has a market cap of CAD19.3 million.

CML Healthcare Inc (TSX: CLC, OTC: CMHIF) shareholders approved the CAD10.75 per share buyout of the company by LifeLabs Ontario, and the Ontario Superior Court of Justice has issued a final order approving the plan of arrangement.

Will all necessary approvals in, the transaction has closed. Shareholders should by now have received CAD10.75 per share in cash. CML has de-listed from the Toronto Stock Exchange.

CML will be removed from How They Rate effective with the November 2013 issue.

Advice Changes

Canadian Utilities (TSX: CU, OTC: CDUAF)–From Hold to Buy < 36. A selloff since late April has brought the share price down to attractive levels at 15.11 times earnings. Solid dividend growth and a good regulated earnings base augmented by reasonable non-regulated growth prospects make it a solid way to play Canadian essential services.

Encana Corp (TSX: ECA, NYSE: ECA)–From Hold to Buy < 19. Management has announced a significant strategic revamp that could include a 50 percent reduction in the company’s current dividend rate. Nevertheless, a solid portfolio of producing assets and a proven track record of execution will likely be acknowledged in the market once focus and capital management issues are worked out. This is for aggressive investors with risk capital ready for speculative allocation.

H&R REIT (TSX: HR, OTC: HRUFF)–From Hold to Buy < 22. The REIT is trading at an attractive valuation after a brutal selloff that’s afflicted all of its kind since May. Solid financial and operating results for the second quarter also support the upgrade. A relatively high debt level keeps it from the ranks of our favorite Portfolio REIT holdings. But it will benefit over the long term as investors recognize fundamental quality.

LeisureWorld Senior Care Corp (TSX: LW, OTC: LWSCF)–From Hold to Buy < 11. This health care play posted solid operating and financial results for the second quarter, and the share price has come well down from its 2013 highs above CAD13.

Rating Changes