Three Canadian Edge Portfolio recommendations have reported earnings since my mid-week Flash Alert: Keyera Corp (TSX: KEY, OTC: KEYUF), Newalta Corp (TSX: NAL, OTC: NWLTF) and Penn West Petroleum Ltd (TSX: PWT, NYSE: PWE).

The good news is all three met or beat management guidance, strengthened balance sheets, kept long-run strategic initiatives on track, announced robust capital spending budgets and supported dividends comfortably.

Keyera and Newalta are set for more dividend growth this year, while Penn West certainly could boost its payout if management so desires.

All three stocks, in other words, have done what it takes to stay in the Portfolio. The only caveat is new buyers will need to time purchases to get in below the buy targets. Keyera continues to trade well above my buy target of USD42, while Newalta and Penn West have both tacked on sizeable gains so far in 2012.

Keyera, at its core, is an asset-growth story. And that’s basically what management did once again in 2011.

A weak propane market held back cash-flow growth to 6 percent, while slightly lower distributable cash flow ran the payout ratio up to 67 percent. But the company continued its relentless pace of buying and building new fee-generating assets, with capacity locked in under long-term contracts.

The latest of these was the purchase of an iso-octane manufacturing facility in Edmonton, Alberta, that closed in January. The company also spent CAD36.9 million to buy additional ownership interests in several gas liquids facilities, all of which will begin adding to earnings in the first quarter of 2012 for the first time. The company started up solvent handling facilities at its Diluent Terminal in December, while launching a solvent services agreement with Exxon Mobil’s (NYSE: XOM) Canadian affiliate.

Total growth capital in 2011 was CAD147.6 million, CAD36.9 million spent on acquisitions. The company expects to ramp that up to a range between CAD125 and CAD175 million in 2012 for construction spending alone. That’s thanks to an environment starved for infrastructure as well as Keyera’s growing ability to invest in it.

Gathering and processing throughput and marketing sales volumes rose in the fourth quarter across the board. That’s the result of asset additions that are only just starting to flow through to the bottom line.

Management warns that propane demand remains weak due to extremely mild winter weather in North America. That plus realized losses on expiring commodity-price hedges will hurt first-quarter 2012 results. As the year progresses, however, the impact will be dwarfed by the massive investment in energy production from lands near the company’s facilities, which continues to fuel asset growth.

The result looks set to be another year of strong cash flow and distribution growth. My only problem with Keyera is that its stock is priced to yield just 4.3 percent, well above my current buy target of USD42. It’s now well off its all-time high of USD50-plus, achieved in early January. But new buyers should nonetheless wait for a dip to that level before picking up shares.

One possibility: Enter a buy limit order for Keyera at a price of USD40 or lower. You may not get executed. But if you do, you’ll own this high growth stock at a very good price.

Newalta posted strong results for the fourth quarter of 2011, with revenue surging 13 percent and gross profit turning up 9 percent. That capped a year in which earnings grew 52 percent on 19 percent higher revenue. Funds from operations per share were slightly lower for the quarter but up 27 percent for the full year. The quarterly and yearly payout ratio came in at 15.4 percent and 12.6 percent of funds from operations, respectively.

The provider of environmental clean-up services to industrial and energy companies increased growth capital expenditures by 56 percent in the quarter and 82 percent for the year. Growth capital is the fuel for future revenue gains and management expects to spend CAD115 million in 2012, 60 percent in the first half of the year. That’s a lift of 32.8 percent from last year. The company also raised the profitability of capital deployed, boosting return on equity to 15.2 percent from 12.9 percent a year ago.

Management anticipates increased activity in crude oil drilling areas, greater onsite contract work and higher drill site equipment utilization will drive higher earnings in 2012, partly offset by weaker pricing for lead. The company also continues to focus on growing its base of long-term contracts for service, which combined with increased reach and diversity of operations will stabilize future cash flow.

Newalta’s Facilities Division has grown to 55 sites, including Canada’s largest lead-acid battery recycling facility, state-of-the-art solid waste landfill and 25 oilfield facilities. And management has deployed capital into a series of organic growth projects on its existing sites to lift revenue further.

Oil recycling revenue was up 42 percent in 2011 on a 21 percent increase in average realized selling prices and a 7 percent boost in recovered volumes. Waste-processing volumes were higher by 5 percent overall. And the company has also ramped up its efforts in heavy-oil recycling, lifting revenue 43 percent over the past year.

Newalta is pressing ahead with its clean-up efforts in Canada’s tar sands. The company now expects a second-quarter start-up date for a commercial demonstration of processing Mature Fine Tailings from Syncrude’s oil sands mine operations near Fort McMurray, Alberta. If successful the project will position the company for a major piece of the rapidly growing oil sands waste treatment and recycling business.

A relative laggard in 2011, Newalta shares are up nearly 20 percent thus far in 2012. The nature of the business–providing cleanup services to economically sensitive companies–means the stock is likely to remain volatile this year, rising and falling with investor perceptions for global growth.

The company continues to do the same thing it’s done since I added it to the Canadian Edge Portfolio in April 2005: growing its unique franchise of cleaning up waste historically dirty businesses generate and profitably selling the byproducts. As long as that’s the case, its shares will become progressively more valuable.

I’m looking for another large dividend increase when the company declares its next quarterly dividend in May. In the meantime, Newalta is a buy up to USD15.

Penn West Petroleum produced funds flow of CAD0.93 per share in the fourth quarter of 2011. That was a 43 percent increase from the fourth quarter of 2010 and covered the company’s quarterly distribution of CAD0.27 by a 3.4-to-1 margin, equivalent to a payout ratio of 29 percent.

There’s obviously plenty of room for a dividend increase. Management’s focus, however, remains squarely on developing its light-oil reserve base, Canada’s largest and most leveraged to horizontal multi-fracturing technology. Output was hampered by fires and flooding in the first half of 2011 and into the third quarter. But it got back on track in the fourth, with a 4.3 percent sequential increase.

This enabled the company to meet the mid-point of its 2011 and second-half average production guidance. The company was also able to replace 230 percent of reserves, with 70 percent of the additions coming from light oil and natural gas liquids (NGLs).

The primary drivers for strong fourth-quarter results were high prices for oil and NGLs, coupled with the company’s growing reliance on liquids for output. Those factors are expected to drive higher returns in 2012 as well. The company has ramped up light oil drilling activity, spending CAD583 million in the fourth quarter for a total of CAD1.58 billion in the full year.

That was slightly higher than the CAD1.5 billion initially budgeted and follows a bullish pattern of increases in recent years. The company’s range for 2012 spending is CAD1.6 billion to CAD1.7 billion. Management has also hedged a sizeable portion of output between USD85 and USD101 per barrel, which provides some stability of cash flow.

If I have a complaint about Penn West, it’s that management has been so conservative with its dividend policy in recent years, particularly since converting to a corporation in 2010. And it’s likely to continue holding back on increases even as profits rise, preferring instead to reinvest the capital into its production base. The silver lining is the stock trades at 60 to 70 cents per dollar of reserves and the current payout is well protected against energy price ups and downs.

Consequently, I’m willing to continue recommending Penn West as an Aggressive Holding. The stock rates a buy for patient value investors up to USD25.

Numbers to Come

Here’s when to expect the next round of numbers of Canadian Edge Portfolio Holdings as well as links to analyses of companies that have already reported. I’ll  provide analysis of those yet to submit numbers in Flash Alerts over coming weeks as they appear and in the March CE.

I don’t send out Flash Alerts for companies not in the model Portfolio. Rather, I’ll recap those that have reported by Mar. 9 in the regular issue, along with payout ratios, in How They Rate. The rest will be addressed in the April issue.

Conservative Holdings

• AltaGas Ltd (TSX: ALA, OTC: ATGFF)–Mar. 8, 2012 (confirmed)
• Artis REIT (TSX: AX-U, OTC: ARESF)–Mar. 14, 2012 (confirmed)
• Atlantic Power Corp (TSX: ATP, NYSE: AT)–Feb. 29, 2012 (confirmed)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–Mar. 2, 2012 (estimate)
• Brookfield Renewable Energy Partners LP (TSX: BEP-U, OTC: BRPUF)–Feb. 15, 2012, Flash Alert
• Canadian Apartment Properties REIT (TSX: CAR-U, OTC: CDPYF)–Feb. 28, 2012 (confirmed)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–Feb. 9, 2012, Flash Alert
• Colabor Inc (TSX: GCL, OTC: COLFF)–Mar. 8, 2012 (estimate)
• Davis + Henderson Income Corp (TSX: DH, OTC: DHIFF)–Mar. 6, 2012 (confirmed)
• Dundee REIT (TSX: D-U, OTC: DRETF)–Feb. 22, 2012 (confirmed)
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–Feb. 24, 2012 (confirmed)
• IBI Group Inc (TSX: IBG, OTC: IBIBF)–Mar. 21, 2012 (estimate)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–Mar. 23, 2012 (estimate)
• Just Energy Group Inc (TSX: JE, OTC: JUSTF)–Feb. 9, 2012, Flash Alert
• Keyera Corp (TSX: KEY, OTC: KEYUF)–Feb. 16, 2012, Flash Alert
• Northern Property REIT (TSX: NPR-U, OTC: NPRUF)–Mar. 13, 2012 (confirmed)
• Pembina Pipeline Corp (TSX: PPL, OTC: PBNPF)–Feb. 15, 2012, Flash Alert
• Provident Energy Ltd (TSX: PVE, NYSE: PVX)–Mar. 6, 2012 (confirmed)
• RioCan REIT (TSX: REI-U, OTC: RIOCF)–Feb. 15, 2012, Flash Alert
• Shaw Communications (TSX: SJR/B, NYSE: SJR)–Jan. 12, 2012, Flash Alert
• Student Transportation Inc (TSX: STB, OTC: STUXF)–Feb. 15, 2012, Flash Alert
• TransForce Inc (TSX: TFI, OTC: TFIFF)–Feb. 29, 2012 (confirmed)

Aggressive Holdings

• Acadian Timber Corp (TSX: ADN, OTC: ACAZF)–Feb. 7, 2012, Flash Alert
• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–Mar. 14, 2012 (estimate)
• ARC Resources Ltd (TSX: ARX, OTC: AETUF)–Feb. 9, 2012, Flash Alert
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)–Feb. 23, 2012 (confirmed)
• Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF)–Mar. 16, 2012 (estimate)
• Enerplus Corp (TSX: ERF, NYSE: ERF)–Feb. 24, 2012 (estimate)
• Extendicare REIT (TSX: EXE-U, OTC: EXETF)–Feb. 29, 2012 (confirmed)
• Newalta Corp (TSX: NAL, OTC: NWLTF)–Feb. 16, 2012, Flash Alert
• Noranda Income Fund (TSX: NIF-U, OTC: NNDIF)–Feb. 15, 2012, Flash Alert
• Parkland Fuel Corp (TSX: PKI, OTC: PKIUF)–Mar. 14, 2012 (estimate)
• Penn West Petroleum Ltd (TSX: PWT, NYSE: PWE)–Feb. 16, 2012, Flash Alert
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–Mar. 9, 2012 (estimate)
• PHX Energy Services Corp (TSX: PHX, OTC: PHXHF)–Mar. 7, 2012 (estimate)
• Vermilion Energy Inc (TSX: VET, OTC: VEMTF)–Feb. 29, 2012 (estimate)