4 Top Stocks in Newfoundland & Labrador

What potential is there to be found on The Rock?

| More on:

Everyone likes to support a hometown hero, and Canada’s provinces boast many success stories. Today, we will be looking into the exciting opportunities based in Newfoundland and Labrador

Fortis Inc. 

The first company we will be looking into is the province’s largest and most profitable publicly traded company, Fortis (TSX: FTS). The company operates under many faces, but its common thread is the production and distribution of natural gas and electricity. The FortisBC and Central Hudson divisions operate primarily as gas suppliers and distributors, and Fortis Alberta and Newfoundland Power supply electricity.

The company is continuing its growth spurt through purchasing Arizona gas distributor UNS Energy, and a New York based gas company. These U.S. acquisitions will add a million more customers to Fortis’s already 2 million strong portfolio. Along with these additions, management at Fortis is projecting a 6% growth in both its earnings per share and in its dividend from 2014-2018. During the same time period, Fortis will be investing $6.5 billion in Western Canada on capital investments, such as the Waneta Hydro-Dam.

Fortis just released its Q1 2014 report and posted net earnings of $143 million ($0.67 per share) down from $151 million ($0.79 per share). Investors shouldn’t be overly concerned with the drop in earnings as this is the result of the $4.3 billion price tag on Arizona-based UNS Energy. The stock closed Friday at $32.54, and is trading in a 52-week range of $29.31 to $34.88. Being part of heavily regulated industries, Fortis offers investors a stable portfolio piece that also offers a $0.32 quarterly dividend.

Altius Minerals Corp

A diversified mineral royalty company, Altius (TSX: ALS) is involved directly or through joint ventures in mining iron, copper, nickel, gold, and uranium. In many instances, Altius owns smaller portions of mines and refineries, between 5%-10%. Through subdivisions such as Cranberry Hill it acts as a venture capital firm focused on early stage mineral exploration services.

Altius is part of three exploration alliances with operations in Newfoundland, Alaska, and Chile. The company is also part of eight joint ventures all located in the provinces. The majority of the projects are iron mines, but there is also gold, copper, and uranium. There is also one project that is extracting the increasingly important palladium, which is used in catalytic converters, electrical contacts, aircraft spark plugs, and the diffusion/storage of hydrogen.

Altius has also just won a government contract along with a Chinese partner to develop the Julienne Lake iron ore deposit in western Labrador. The stock closed at $14.00 on Friday and is trading in a 52 week range of $16.32 and $9.09.

Resource rich

In the wake of the closure of the fisheries many people wrote off the potential of “the rock” and expected Newfoundland to forever be a have-not province. However, with the discoveries of oil and gas within and offshore of the province changed those perceptions. For investors looking less at the companies based in the province and more at the companies operating in the province, there are over 250 energy and resource companies active in the region. So let’s take a quick look at two of the top picks currently active in the province.

Suncor (TSX: SU)(NYSE: SU) is one of the primary players in the region, with a stake in all offshore oil production along the province. The crown jewel of the company is the Terra Nova oil and gas field, in which it is the primary stakeholder with 37%. Suncor also has significant stakes in the White Rose oil field with 27.5% stake and the Hibernia oil platform with a 20% stake.

The other company is Husky Energy (TSX: HSE) the primary stake holder in the  White Rose oil and gas field, with a controlling 72.5% stake. Husky also has an interests in the Terra Nova oil and gas field with a 13% stake. Husky has previously announced new exploration plans in the Flemish pass where it holds a 35% working interest in the Bay du Nord, Harpoon and Mizzen discoveries in the Flemish Pass.

So long and thanks for all the fish

Savvy investors know that the next big thing aren’t always in the headlines but can be hiding somewhere under a (or in) the Rock. As we continue to trek from coast to coast, we will search out the best and most promising stocks from each province, because portfolio gains are not exclusive to companies in Alberta and Ontario.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Cameron Conway does not own any shares in the companies mentioned.

More on Investing

funds, money, nest egg

I’d Aim for $1 Million Buying Just These 5 TSX Stocks

Here's a diversified group of TSX stocks that could help investors achieve a $1 million portfolio.

Read more »

Canadian Dollars
Bank Stocks

If You’d Invested $2,500 in Royal Bank Stock in 2012, Here’s How Much You’d Have Today

Royal Bank (TSX:RY) stock has seen some heavy lifting of its stock price in the last decade, but should investors…

Read more »

warning or alert

TFSA Alert: Top Stocks to Safeguard Your Retirement

Are you looking for stocks to hold in a TFSA? Here are three top picks!

Read more »

Bank sign on traditional europe building facade
Bank Stocks

Canada’s Banking Giants: Are These Stocks Worth Your Money Today?

Canadian investors should watch top bank stocks like Royal Bank of Canada (TSX:RY) closely after another interest rate hike.

Read more »

tsx today
Tech Stocks

TSX Today: What to Watch for in Stocks on Thursday, June 8

TSX stocks are likely to remain volatile today, as investors continue to assess the possible impact of higher interest rates…

Read more »

TFSA and coins
Dividend Stocks

Maximize Your Retirement Income: How to Turbocharge Your TFSA Returns

TFSA investors could pick different strategies to boost returns.

Read more »

dividends grow over time

Dividend Aristocrats: Canadian Stocks That Keep Paying Year After Year

Top Canadian stocks like Bank of Nova Scotia (TSX:BNS) also qualify as Dividend Aristocrats that you can trust for the…

Read more »

Golden crown on a red velvet background
Dividend Stocks

Canadian Utilities Is a “Dividend King,” But I Like This Stock Even More

Canadian Utilities (TSX:CU) stock is a solid dividend provider, but there's more to look at then just how much you're…

Read more »