Pipelines favoured for steady flow of earnings

TD's Michael O'Brien tilts his portfolio toward defensive names

Sonita Horvitch 28 September, 2011 | 6:00PM
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Michael O'Brien, vice-president and director at TD Asset Management Inc., says that Canadian pipeline stocks offer good, solid earnings growth, minimal volatility and healthy dividend increases in an environment of historically low interest rates and sluggish economic growth.

"These stocks are not economically sensitive, as most of their returns are either regulated or the subject of long-term contracts," says O'Brien, who manages a Canadian large-cap portfolio at TDAM using a GARP style, or growth at a reasonable price.

He says some analysts consider pipeline stocks to be expensive. "But the earnings visibility of the companies is exceptional in this climate of uncertainty." As an equity investment, "they offer long-term steady capital appreciation, which is the objective of TD's Canadian blue-chip portfolio."

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Sonita Horvitch

Sonita Horvitch  

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