Keystone Pipeline Project Makes COP, TRP, and VLO Become Attractive Stocks

Houston, Texas-based ConocoPhillips (COP) is the third largest oil company in the US, and along with TransCanada (TRP) will spend around $5.2 billion on the Keystone pipeline to transport 590,000 barrels per day by 2009 across the continental US to the Midwest refineries.

The first phase of the Keystone pipeline will move around 530,000 barrels a day of Alberta sands crude to the US Midwest by 2009, is now under construction, and will eventually extend from Illinois west to Nebraska, merging the two phases to head south. The capacity addition would facilitate the processing of output from the Alberta oil- sands by Gulf Coast refiners, who account of around half of the US refining capacity. The second phase would follow by around 2012.

COP will release its second-quarter earnings on Wednesday, July 23, at 8:30 a.m. Eastern. The news release will be issued through Business Wire.
A follow-up conference call with Chairman and Chief Executive Officer Jim Mulva and Investor Relations General Manager Gary Russell will be held Wednesday, July 23, at 11 a.m. Eastern.

Valero Energy Corp. (VLO), the largest refiner in the US said that it had agreed to be a potential shipper. The new line will also cut down transportation time by around 15-20 days.
The project will allow TransCanada's to boost its earnings through increased exposure to oil, and decided to go ahead with the project when customers committed to ship 300,000 barrels per day on the line across an 18-year period.

I present Alan Brochstein’s criteria for stocks screening below:

• Dividend Yield in excess of 2% (which is now slightly below that of the S&P 500)
• Payout ratio below 67% - makes sure they aren't losing financial flexiblity (safety)
• 5% growth over the past three years in earnings per share, revenue per share and dividends per share (growth)
• Return on Capital in excess of 10% (safety)
• Earnings estimates revisions over past 12 weeks no worse than -10% (safety)
• PE ratio no more than 50% above 5yr median (safety)
• Total Debt to Capital below 35% (safety)
• Years of consecutive dividend payments is at least 10 (safety)

The goal of these criteria is to find companies that are growing, not too expensive and not too financially risky. The stocks that currently meet these parameters are in the table below:

Source: Alan Brochstein Analytical Services

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Boardwalk Pipeline Partners is a Buy !

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