Three Canadian Edge Portfolio Holdings have announced quarterly results, all from the Conservative Holdings. Each reported numbers that back strong balance sheets, reliable dividend growth and long-term expansion plans.

That’s pretty much what I look for when I pour over company numbers each quarter. This year there have been definite challenges for some CE Portfolio picks. The more than 35 percent plunge in natural gas prices this year is one big one. Another is European credit turmoil and shrinking economies, while still another is certainty in Asia.

For at least these three companies, these challenges posed no real threat to results. Consequently, I’m maintaining my Safety Ratings and advice for all three. Below I highlight the particulars, and offer buy targets for those who don’t already own them.

AltaGas Ltd’s (TSX: ALA, OTC: ATGFF) first-quarter funds from operations hit a record of CAD0.84 per share, up 13.5 percent from year-ago levels. Funds from operations is the primary measure of profitability on which dividends are based.

Asset additions were the biggest catalyst for growth, the most important being the acquisition of gas utility Pacific Northern Gas. The property is strategically located in the region of the prospective Kitimat liquefied natural gas (LNG) export facility. It offers numerous potential infrastructure expansion opportunities, in addition to being more profitable to run now.

AltaGas is in the process of acquiring similar assets in Michigan and Alaska with the purchase of SEMCO Holding Corp for USD1.135 billion. This deal is expected to close in the third quarter and is forecast to add 10 percent to company earnings and cash flow in 2013, the first full year under management.

AltaGas is also bringing some CAD500 million in new gas midstream assets on line in coming months as well as CAD90 million in power plants. The 195 megawatt Forrest Kerr plant is ahead of schedule and on budget, with 90 percent of project costs contractually committed.

Some CAD40 million in new pipeline projects will be service-ready later this year, as will an expansion of natural gas fractionating facilities to boost natural gas liquids capability.

Overall, that’s roughly CAD1.8 billion in new fee-generating energy infrastructure, and it’s why the company was able to return to dividend growth in late 2011, lifting its monthly payout by 4.5 percent. With its invest-to-grow strategy still succeeding, I expect a similar lift later this year. The first quarter payout ratio based on funds from operations was only 41 percent, down from 45 percent in the year-ago quarter.

The company continues to have very little direct exposure to commodity-price swings and basically none to the steep slide in natural gas prices in recent months. By 2013–following the close of the SEMCO deal–fully two-thirds of cash flow will come from long-term contracted or regulated assets. That’s up from just 29 percent last year.

Meanwhile, management continues to hedge everything from “frac” spreads–which determine the profitability of natural gas liquids (NGL) operations–to wholesale power prices.

Investing to grow requires raising both debt and equity capital, and net debt has surged to CAD1.5 billion from CAD1.3 billion at the start of the year. All this, however, is secured by what are basically recession-proof cash flows that in fact continue to grow. The company has basically no near-term debt maturities after extending credit lines to May 30, 2016, and issuing senior notes maturing in mid-2020 at just 4.07 percent. And it’s been able to successfully issue equity as well, most recently to finance the SEMCO deal.

The package here is a conservatively managed but growing company paying a solid and rising dividend. It carries few risks. The stock has rallied in the wake of these numbers but is still slightly below my buy target of USD32. If you’re a conservative income seeker, this is a great time to pick up shares of this long-time CE Portfolio holding, if haven’t yet. AltaGas is a buy under USD32.

Shaw Communications Inc (TSX: SJR/B, NYSE: SJR), which reports on slightly different timetable than other CE recommendations, posted a 3 percent boost in revenue for the quarter ended Feb. 29, 2012.

Operating income, meanwhile, rose 2 percent for the quarter and 8 percent for the first six months of fiscal 2012. Net income from continuing operations was flat for the quarter at CAD0.38 per share but nearly doubled for the six months from the year before.

Free cash flow for the three months fell sharply to CAD57 million from CAD174 million a year ago. This is attributable to a sharp ramp-up in capital spending, as the company is in the process of upgrading its cable network to digital and is building out its Wi-Fi capabilities.

Revenue was higher at all three of the company’s major areas of operation, cable television, satellite communications and media. That beneficial impact was partly offset by margin compression at the cable operation, due to a softer advertising environment and company market efforts to migrate users to more profitable packages.

That’s also put pressure on free cash flow, with management now expected a full fiscal year tally of CAD450 million. That’s still enough to cover Shaw’s dividend by a solid 1.11-to-1 margin; the payout ratio for the period was 89 percent.

Nor is it likely to prevent management from raising the dividend again early next year, as promised during the conference call to discuss these results.  The company also expects the accelerated pace of capital spending to bring down its operating cost structure and boost sales, citing a drop in the customer attrition rate during the recent earnings conference call.

The earnings news triggered some immediate selling of Shaw stock, as some worry competition from Telus (TSX: T, NYSEL TU) will continue to force accelerated capital costs the rest of the year. But with relatively little debt pressure for its size and what’s still a very steady franchise, the story on this stock remains the same. Those who don’t already own Shaw Communications can buy up to our target of USD22.

TransForce Inc (TSX: TFI, OTC: TFIFF) is buying more assets in the US, acquiring a unit of Nabors Industries (NYSE: NBR) specializing in rig moving, custom heavy hauling, crane and rigging services and oilfield transportation. The new operations will fit well with those the company has recently acquired in the energy services sector, and they’ll immediately add CAD25 million in annual revenue.

Energy Services Transport is increasingly a solid contributor to TransForce’s overall growth, generating 53.6 percent more income in the first quarter than a year ago. Now the company’s largest individual segment at 31.4 percent of overall income, its growth and profitability were major factors in the company’s solid performance, which enabled management to boost the quarterly dividend by 13 percent to CAD0.13 per share.

The company also enjoyed a 187.5 percent increase in its Package and Courier operating income, now at 29 percent of profit. And it saw large gains at the Less-than-Truckload and Truckload divisions as well. That was partly offset by a drop in specialized services income as well as a higher cash flow drop at the corporate level.

TransForce’s first-quarter revenue rose 40 percent, triggering a near double in cash flow to CAD47.4 million (up 97 percent). Cash flow margins rose to 6 percent of total revenue from 4.3 percent a year ago. Adjusted net income–the primary measure of profitability–rose 56 percent to CAD0.25 per share. That kept the payout ratio at just 52 percent, even after the increase.

Looking ahead to the rest of 2012, management is basing its growth strategy on the forecast for only “marginal” improvement in the North American economy. The focus is on improving profitability at existing operations and cutting debt. That will be helped by CAD38.3 million, or CAD0.40 per share, of free cash flow, a level more than three times the current dividend level.

There are no debt maturities until Jul. 16, 2014, when the company’s CAD450 million credit line is up for renewal. This line has CAD281.46 million drawn, though management is systematically reducing it.

TransForce stock hit a new 52-week high immediately after announcing the news and is now very close to the all-time high set back in February 2006. In light of the dividend boost, I’m raising my buy target to USD17 from USD16. TransForce is a buy under USD17 for those who don’t already own it.

Here’s when the rest of the Canadian Edge Portfolio will report earnings. Those yet to specify a date are indicated as “estimated,” with dates shown based on prior reporting periods. I’ll  report numbers released next week in your regular May issue, the rest in Flash Alerts next month.

Conservative Holdings

• AltaGas Ltd (TSX: ALA, OTC: ATGFF)–Apr. 26 Flash Alert
• Artis REIT (TSX: AX-U, OTC: ARESF)–May 9 (confirmed)
• Atlantic Power Corp (TSX: ATP, NYSE: AT)–May 7 (confirmed)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–Jun. 1 (estimate)
• Brookfield Renewable Energy Partners LP (TSX: BEP-U, OTC: BRPUF)–May 7 (tentative)
• Canadian Apartment Properties REIT (TSX: CAR-U, OTC: CDPYF)–May 9 (confirmed)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–May 10 (confirmed)
• Davis + Henderson Income Corp (TSX: DH, OTC: DHIFF)–May 8 (confirmed)
• Dundee REIT (TSX: D-U, OTC: DRETF)–May 3 (confirmed)
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–May 9 (estimate)
• IBI Group Inc (TSX: IBG, OTC: IBIBF)–May 11 (confirmed)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–May 14 (confirmed)
• Just Energy Group Inc (TSX: JE, OTC: JUSTF)–May 18 (estimate)
• Keyera Corp (TSX: KEY, OTC: KEYUF)–May 8 (confirmed)
• Northern Property REIT (TSX: NPR-U, OTC: NPRUF)–May 9 (confirmed)
• Pembina Pipeline Corp (TSX: PPL, OTC: PBNPF)–May 3 (confirmed)
• RioCan REIT (TSX: REI-U, OTC: RIOCF)–May 3 (confirmed)
• Shaw Communications Inc (TSX: SJR/B, NYSE: SJR)–Apr. 26 Flash Alert
• Student Transportation Inc (TSX: STB, OTC: STUXF)–May 11 (estimate)
• TransForce Inc (TSX: TFI, OTC: TFIFF)–Apr. 26 Flash Alert

Aggressive Holdings

• Acadian Timber Corp (TSX: ADN, OTC: ACAZF)–May 1 (confirmed)
• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–May 11 (confirmed)
• ARC Resources Ltd (TSX: ARX, OTC: AETUF)–May 17 (estimate)
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)–May 9 (confirmed)
• Colabor Group Inc (TSX: GCL, OTC: COLFF)–May 2 (confirmed)
• Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF)–May 11 (estimate)
• Extendicare REIT (TSX: EXE-U, OTC: EXETF)–May 8 (confirmed)
• Newalta Corp (TSX: NAL, OTC: NWLTF)–May 8 (confirmed)
• Noranda Income Fund (TSX: NIF-U, OTC: NNDIF)–Jun. 14 (estimate)
• Parkland Fuel Corp (TSX: PKI, OTC: PKIUF)–May 8 (confirmed)
• PetroBakken Energy Ltd (TSX: PBN, OTC: PBKEF)–May 9 (estimate)
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–May 11 (estimate)
• PHX Energy Services Corp (TSX: PHX, OTC: PHXHF)–May 18 (estimate)
• Vermilion Energy Inc (TSX: VET, OTC: VEMTF)–May 7 (estimate)