One is rapidly gaining share in its key markets. The other already dominates its realm.

Our Aggressive choice as one of June’s “Best Buys” for new money is an Energy Services firm that’s making a return to the CE Portfolio based on the quality of its technical offering, its strong presence in North America and expanding international profile and its solid operating and financial performance.

Our Conservative selection has occupied a place in the Portfolio since June 2010, boosting its dividend every year since, diversifying and augmenting its revenue streams via innovative uses of its key assets and early adaptation of new technologies, ensuring its continuing dominance through facilities upgrades and acquisitions.

Both are well placed to build wealth for the long term.

PHX Energy Services Corp (TSX: PHX, OTC: PHXHF) joined the CE Portfolio Aggressive Holdings in September 2010. We sold it in October 2012 after a gain of 10.3 percent in favor of Poseidon Concepts Corp, a move that turned out about as well as the 1972 disaster epic The Poseidon Adventure.

Poseidon Concepts tried to get too big too fast and foundered, eventually going bust in early 2013. It was a complete loss.

From Oct. 5, 2012, through June 5, 2014, PHX generated a total return in US dollar terms of 87.5 percent. We can’t get that back.

But we can participate in PHX’ promising future.

PHX, through its operating units, provides horizontal and directional drilling technology and services to oil and natural gas producing companies in Canada, the US, Albania, Russia and Colombia. It develops and manufactures its E-360 electromagnetic (EM) and P-360 positive pulse measurement while drilling (MWD) technologies that are made available for internal operational use.

In addition, as the result of an acquisition completed in November 2013, the company provides electronic drilling recorder (EDR) technology and services, through RigManager Services.

More than 100 percent of the increase in global crude oil production since 2005 has come from US shale oil. Without it, global field production would be lower today than it was in 2005. US field production has been climbing since 2008, thanks to new methods for getting oil out of tight geologic formations by horizontal fracturing of the rock.

The exploration and production industry has figured out how to maintain production in the face of a depleting resource base by moving along an upward-sloping marginal cost curve. PHX, with its proprietary technology and solid record of execution, occupies a key place on this curve.

PHX has described the US as the “place to be,” as it has vast resources, is transitioning away from importing oil and natural gas, and is the largest directional/ horizontal drilling market in the world. PHX’ share of the US market has increased from 3 percent in 2008 to more than 5 percent in 2014.

As of this writing Cineplex Inc (TSX: CGX, OTC: CPXGF), Canada’s dominant owner/operator of movie theaters, is trading just below our recommended buy-under target of USD38, having closed at CAD41.11 on the Toronto Stock Exchange (TSX) on June 5, 2014, equivalent to USD37.59 based on the prevailing Canadian dollar-US dollar exchange rate.

The share price dipped from an all-time high of CAD44.31 registered on Dec. 24, 2013, early in the new year and has traded in a tight range thus far in 2014.

Results for the fourth quarter of 2013 and the first quarter of 2014 were soft due to difficult comparable numbers for respective prior corresponding periods, which benefitted from particularly strong film lineups.

The opportunity now lies in the box office upside that’s likely to be driven by another string of strong, tent-pole-type offerings from Hollywood over the balance of 2014 and into 2015.

Next year, in particular, looks likely to be a record-breaking year for box-office sales.

PHX posted company-record first-quarter revenue of CAD129.1 million, up from CAD92.7 million during the first three months of 2013, a 39 percent increase.

Earnings before interest, taxation, depreciation and amortization (EBITDA) were up 16 percent to CAD21.3 million from CAD18.3 million a year ago. EBITDA margin was 16 percent, down from 20 percent in the prior corresponding period.

Net earnings increased by 6 percent from CAD8.3 million in the first quarter of 2013 to CAD8.8 million in 2014.

Funds from operations were CAD20.5 million, up 23 percent from CAD16.7 million a year ago, and also a company record.

Management noted activity growth in all of its operating segments. US revenue, as a percentage of consolidated revenue, increased to 44 percent from 42 percent in first quarter of 2013. PHX notched another company record during the quarter, for operating days.

Russia and Albania led the international operation’s growth; this segment represented 10 percent of consolidated revenue in the first quarter of 2014, in line with a year ago.

During the first quarter PHX’ job capacity increased by 10 concurrent jobs to 224 through the addition of eight P-360 positive pulse MWD systems and two E-360 EM MWD systems. As of March 31, 2014, its MWD fleet consisted of 140 P-360 positive pulse MWD systems, 67 E-360 EM MWD systems, and 17 RWD systems.

Of these, 106 MWD systems were deployed in Canada, 89 in the US, 15 in Russia, six in Albania, four in Peru and four in Colombia. PHX is in the process of closing its Peruvian operations and re-allocating the assets in that region to more strategic areas for greater utilization in the future.

During the remainder of the year, management expects to add 7 P-360 and 5 E-360 MWD systems. By the end of 2014 PHX expects to have a fleet of 236 MWD systems, which would be comprised of 147 P-360 MWD systems, 72 E-360 MWD systems and 17 RWD systems.

The capital expenditure budget for the quarter was CAD13.5 million. Due to realized strong growth and anticipated active future activity levels, management increased its 2014 CAPEX budget to CAD63.3 million from CAD34.7 million.

PHX paid dividends of CAD7.2 million, or CAD0.21 per share, amounting to a quarterly payout ratio of 35 percent of FFO.

As of March 31, 2014, PHX had long-term debt of CAD91 million, all of it in the form of revolving credit facility with a September 2016 maturity. That’s 16.5 percent of market capitalization as of June 2, 2014.

PHX Energy is strategically placed to service key North American energy basins that are in fact world-class production zones. It’s already established a notable presence and credibility in these drilling areas.

The top priority is to grow in the US, the largest market for horizontal drilling services. US operating days and revenue reached new highs in the first quarter, as Phoenix USA acquired new clients and activity in basins such as the Eagle Ford, Permian and North Dakota Bakken experienced the largest gains. Additionally the Marcellus and Mid-Continent remained focal points.

Management expects positive trends in commodity prices will be maintained and natural gas prices will gain additional strength and that operators will increase their budgets for drilling and add locations and rigs in the future.

PHX forecast additional growth in operating days and increased market share for the balance of 2014, management has cautioned that due to the record pace of growth the company’s cost structure will increase as personnel and equipment levels will likely be stretched at times.

Over time, however, these cost pressures will abate.

PHX Energy Services, a new addition to the CE Portfolio Aggressive Holdings, is a buy under USD16.

Hollywood has gotten better at turning out dependable hits in recent years by relying on sequels, prequels, spinoffs and reboots featuring popular characters and story lines. Franchise movies slated for release in 2014 had predecessor sales of USD4.12 billion, down slightly from last year’s record USD4.17 billion.

But in 2015 that figure should jump to USD4.55 billion. Reliable hits abound for 2015, including the latest installments from the Avengers, Hunger Games, Star Wars, James Bond, Despicable Me and Fast and Furious franchises.

At the same time, 3-D tickets sales–and Cineplex is a leader in adopting and implementing on a wide scale advance screening technologies–could give 2014 results an unexpected lift. The percentage of theatergoers opting for pricier 3-D tickets has been climbing since fall, largely because studios have gotten away from lazy 2-D conversions and have been more judicious about using 3-D.

Cineplex is poised to outperform over the next 12 months due not just to the continuation of strong box office results.

It’s also well positioned because it continues to expand its dominance via acquisitions, upgrade its theaters with advanced technology–and it’s now testing a surcharge for premium seats, a la airline seating–and further diversifying its already broad set of ancillary revenue streams via the expansion of its arcade offering beyond the lobbies of its auditoriums.

Cineplex announced a 4.2 percent dividend increase to a monthly rate of CAD0.125 per share and an annualized rate of CAD1.50, effective with the May installment to be paid June 30 to shareholders of record as of May 30.

Nasty winter weather and a slate of offerings from Hollywood that didn’t hold much appeal to Canadian movie-goers hemmed in first-quarter box office and earnings, though total revenues for the first quarter increased by 12.9 percent to CAD280 million, due largely to the contributions from the 2013 acquisitions of 24 Empire theatres and digital media company EK3 Technologies Inc, subsequently renamed Cineplex Digital Networks.

First-quarter box office revenue was CAD156.2 million, an increase of 7.6 percent.

Media revenue increased by 49.3 percent compared to the first quarter of 2013, driven by the EK3 deal and a 13 percent increase in pre-show and showtime advertising.

Management noted new first-quarter company records for box office revenue per person of CAD9.04 and concession revenue per person of CAD5.05, which were up from CAD8.97 and CAD4.69, respectively, a year ago.

Adjusted EBITDA declined by 2.6 percent due to weather and weak films to CAD30.9 million. Adjusted free cash flow per share declined by 23.9 percent to CAD0.2921. The payout ratio for the period was 123.2 percent.

During the 12 months ended March 31, 2014, Cineplex generated adjusted free cash
flow per share of CAD2.3656, up from CAD1.9784 per share for the prior corresponding period. The payout ratios for these periods were approximately 60.6 percent and 68 percent, respectively.

Cineplex’ SCENE loyalty program added 300,000 members to reach 5.6 million during the quarter, the Cineplex Mobile app has now been downloaded more than 9 million times and management established a national partnership with Tim Hortons Inc (TSX: THI, NYSE: THI) to launch TimsTV in 2,200 existing Tim Hortons locations.

Cineplex’s strong balance sheet, continued investment in new exhibition technologies and the diversification of its business model put it good position for long-term growth.

Cineplex is a buy under USD38.

For more information on PHX Energy Services, go to How They Rate under Energy Services. Click here to go to the company website.

Click here to go to PHX’ Yahoo! Finance page for its Toronto Stock Exchange (TSX) symbol and here for its US over-the-counter (OTC) listing.

Both links include a wealth of information and data. The page for the OTC symbol includes a link to Yahoo! Finance’s very useful “Key Statistics” page, whereas the TSX symbol page does not include such a link.

Cineplex is tracked under Business Trusts. Click here to go to the investor relations section of its company website. Click here to go to its Yahoo! Finance page for its TSX listing, and here’s the link to the Yahoo! Finance page for TransForce’s US OTC listing.

The link to the Yahoo! Finance page includes access the “Key Statistics” page.

PHX has a market capitalization of CAD558.2 million, putting it below the average of CAD1.834 billion for the nine Energy Services companies in the CE How They Rate coverage universe. It ranks No. 7 in terms of market cap.

Cineplex, with a market capitalization of CAD2.606 billion, is the second-biggest company in terms of market cap among How They Rate Business Trusts. But it is the largest movie-theater operator in Canada.

Both PHX and Cineplex have plenty of liquidity on both sides of the border, both in TSX and US-listed symbols.

PHX trades on the TSX under the symbol PHX and on the US OTC market under the symbol PHXHF. Cineplex trades on the TSX under the symbol CGX and on the US OTC market under the symbol CPXGF.

PHX is covered by 10 Bay Street and Wall Street analysts. Eight analysts rate the stock a “buy,” while two rate it a “hold.” No analysts rate the stock a “sell.”

The average 12-month price target among the nine analysts who provide such a figure is CAD18.47, with a high of CAD20 and a low of CAD17, implying a 12-month total return of 19.3 percent from a CAD16.18 closing price on June 5, including an annual dividend rate of CAD0.84 per share.

Cineplex is covered by 13 analysts, seven of whom rate it a “buy” and four of whom rate it a “hold.” There are two “sell” ratings on the stock.

The average 12-month price target among the 11 analysts who provide such a figure is CAD43.14, with a high of CAD45.50 and a low of CAD36.

Cineplex closed at CAD40.97 on June 5 on the TSX. Including a current annualized dividend rate of CAD1.50 per share, Cineplex would post a total return of 9 percent based on analysts’ consensus forecast.

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 paid by PHX Energy Services and Cineplex are 100 percent qualified for US income tax purposes. Dividends paid by both companies are taxed at the now-permanent Bush-era rates of 5 percent to 15 percent for investors’ first USD450,000 a year of income for couples and USD400,000 for single filers. Above that the maximum tax rate is 20 percent.

Canadian investors enjoy favorable tax status for PHX and Cineplex. For US investors, dividends paid into IRAs aren’t subject to 15 percent Canadian withholding tax, though they are withheld at a 15 percent rate if held outside of an IRA.