The steep climb for the world’s key benchmark interest rate triggered significant selloffs for traditional high-yield stocks such as real estate investment trusts (REIT), utilities and telecoms.

But high-yielding Canadian energy stocks, including CE Portfolio Aggressive Holdings ARC Resources Ltd (TSX: ARX, OTC: AETUF), Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF), Enerplus Resources Corp (TSX: ERF, NYSE: ERF), Peyto Exploration and Development Corp (TSX: PEY, OTC: PEYUF) and Vermilion Energy Inc (TSX: VET, NYSE: VET)–have largely been spared.

The major factor for Canadian oil and gas producers remains the “differential” between prices for Western Canada Select (WCS) and other major types of crude oil such as West Texas Intermediate (WTI) and European Brent.

Our primary concern is that companies be able to grow their production. Companies with sufficient scale that show consistent output growth are able to ride out ups and down for commodity prices because their cost structures allow them to compete and sell output despite shrinking margins and to expand and thrive when oil prices ride higher.

The growth aspect of their investment theses, with income essentially a secondary albeit strong component, is enough to overcome the impact of rising interest rates.

Crescent Point, the highest-yielding among our top five picks at 6.9 percent, has demonstrated its ability to grow output, with its key advantage technical advances that have allowed to boost recoveries using its waterflood techniques.

Its performance on the TSX during the period of rising rates has been solid. From its April 17, 2013, 12-month closing low of CAD35.01 through Jan. 9, 2014, Crescent Point has produced a total return of 13.7 percent in US dollar terms and 20.1 percent in Canadian dollar terms, outperforming the S&P/TSX Composite and the S&P/TSX Energy Index.

Through Dec. 31, 2013, the stock was up more than 20 percent in US dollar terms, in line with the S&P 500 for the given time period. The shares have pulled back in the New Year after a solid run to end 2013.

Just after reporting third-quarter earnings in early November Crescent Point reported that it surpassed its exit guidance of 124,000 barrels of oil equivalent per day (boe/d) with six weeks to go in 2013, putting an exclamation point on what was a record year for the company.

Crescent Point exceeded output targets for the first three quarters of 2013, and all indications are it will do so in the fourth quarter as well.

Much of what Crescent Point has been able to accomplish over the past two years has been driven by technological advancements the company has made in its continuing push to improve completions techniques.

Management has set a CAD1.75 billion capital development budget for 2014. Execution of the budget is expected to increase average daily production to 126,500 boe/d, with a 2014 exit production rate of 135,000 boe/d. This implies a 2013-to-2014 exit production growth rate of approximately 9 percent.

The spending plan is approximately 3 percent higher year over year, though Crescent Point has historically revised CAPEX higher along the way in given years.

Management intends to spend approximately CAD1.42 billion roughly 81 percent of the overall budget, on drilling and completions, with a total of 604 net wells planned. The remaining CAD330 million is earmarked for infrastructure, undeveloped land and seismic testing.

The Bakken and the Shaunavon remain the two most prominent plays, together attracting almost 70 percent of planned CAPEX, including infrastructure.  Bakken spending is up year over year, including notably a higher allocation to Flat Lake.

The 2014 capital program is consistent with Crescent Point’s five-year growth models, which forecast long-term production per share growth and dividend sustainability under a variety of commodity price scenarios.

Crescent Point posted average production of 117,963 boe/d for the third quarter, a company record, as funds from operations (FFO) surged 44 percent to CAD554.1 million, or CAD1.42 per share. The payout ratio for the period was 48.6 percent.

The monthly dividend rate has been stable since July 2008. That’s more than five years without an increase. But that’s also more than five years without a cut, during one of the most volatile periods for commodity prices in recent history.

Crescent Point is a relatively defensive play on oil and gas given its high but sustainable yield, its active hedging program (59 percent of forecast 2014 oil production has been sold forward) and conservative financial policies.

But there’s solid upside potential here as well. Crescent Point is a buy under USD48.

In 2010 Bird Construction Inc (TSX: BDT, OTC: BIRDF) posted a total return in US dollar terms of 20.6 percent, at the tail end of the recently concluded era of outperformance for Canadian stocks versus US and global counterparts and helped by a strengthening Canadian dollar versus the buck.

It followed up in 2011 with a loss, including dividends, of 3.7 percent. Two-thousand twelve proved to be a big bounce-back year for Bird, as it posted a total return of 24 percent. Though Canadian stocks generally had begun to lag, the Canadian economy’s recovery in the aftermath of the Great Financial Crisis/Great Recession remained on track, as did the government and industrial building activity that drives Bird’s business.

In 2013 Bird posted a loss of 2.3 percent, sliding from a closing high of CAD15.08 on the TSX on Jan. 21 to as low as CAD11.20 on Aug. 29.

If the pattern holds–and, of course, past performance is no guarantee of future results–Bird is on track for a nice gain in 2014.

Bird suffered a mini-slump in early November following the release of its third-quarter numbers but has rebounded from the 2013 low that followed management’s report of second-quarter financial and operating numbers.

As of the close of trading on Jan. 9, 2014, Bird is trading at CAD13.29, up 15 percent in price-only, US dollar terms, more than 17 percent including dividends since the Aug. 29 near-term low.

The factor that caused the mid-summer selloff–the recognition of a loss on one fixed-price construction project that had a number of execution issues–drove third-quarter net income to CAD3.6 million on construction revenue of CAD367.3 million, compared to CAD18.1 million and CAD396.8 million, respectively in the third quarter of 2012.

Adjusted net income for the three months ended Sept. 30, 2013, was CAD4.2 million, compared to CAD19.3 million in 2012.

Bird’s backlog at the end of the quarter was CAD1.104 billion, up from CAD1.074 billion as of Dec. 31, 2012. The company was awarded several construction contracts totaling approximately CAD275 million during the quarter. The new work involves both civil and building construction projects for industrial customers in northern Alberta.

Bird declared a monthly dividend rate at CAD0.0633 per share for December 2013 and January and February 2014.

Setting aside the single, troublesome contract, results for the third quarter and 2013 to date would have been in line with management’s expectations. These expectations of course include current market conditions.

On Dec. 19, 2013, Bird announced that it had been awarded new contracts totaling approximately CAD400 million for projects involving civil and building construction for industrial and institutional clients across Canada, including a large project to design and construct numerous non-process buildings at the Fort Hills oil sands project north of Fort McMurray, Alberta.

Construction of the projects is underway, with expected completion dates extending into the spring of 2016. The contracts will be added to Bird’s backlog for the fourth quarter of 2013. Management will report results for the period in mid-March.

Management noted that these new awards add to Bird’s growing work program and further reflect a sector mix trend towards the industrial market.

The significant project awards in northern Alberta, coupled with previously secured work in this area, indicate increased activity that Bird is well-positioned to participate in going forward.

Several of the contracts are with repeat clients, reflecting confidence in Bird’s ability to execute. Growth in the backlog, with significant contract awards in the industrial segment, is a good sign for Bird here in early 2014. Bird Construction is a buy under USD14.50.

For more information on Crescent Point, go to How They Rate under Oil and Gas. Bird Construction is tracked under Business Trusts. Click on their US symbols to see all previous writeups in Canadian Edge and Maple Leaf Memo.

Click on the Toronto Stock Exchange (TSX) symbol to go to their Google Finance pages for a wealth of information, ranging from news releases to price charts. Click on their names to go directly to company websites.

Crescent Point is second only to recent Portfolio addition Magna International Inc (TSX: MG, NYSE: MGA) among Aggressive Holdings in terms of market capitalization at CAD15.7 billion. Bird Construction, basically a general contractor operating on a much smaller scale, is currently valued at CAD565 million.

Both stocks have plenty of liquidity on both sides of the border, both in TSX and US-listed symbols.

Crescent Point trades on the TSX under the symbol CPG and on the US over-the-counter (OTC) market under the symbol CSCTF. Bird Construction trades on the TSX under the symbol BDT and on the US OTC market under the symbol BIRDF.

Crescent Point is covered by 24 Bay Street and Wall Street analysts. Twenty-two rate the stock a “buy,” one rates it a “hold” and one rates it a “sell.” The average 12-month price target among the 22 analysts who provide such a figure is CAD46.79, implying upside from a CAD39.87 closing price on Jan. 9, including an annual dividend rate of CAD2.76, of 24.7 percent.

Bird Construction is covered by seven analysts, three of whom rates the stock a “hold,” four of whom rate the stock a “hold.” There are no “sell” recommendations at this time. The average 12-month price target among the six analysts who provide such a figure is CAD12.92. Bird Construction closed at CAD13.29 on Jan. 8. Including an annual dividend of CAD0.76, the stock would post a total return of 2.9 percent based on the Bay Street consensus forecast.

As is the case with all stocks in the Canadian Edge coverage universe, you get the same ownership whether you buy in the US or Canada. These stocks are priced in and pay dividends in Canadian dollars. Appreciation in the loonie will raise dividends as well as the value of your shares.

Dividends paid by Crescent Point and Bird Construction are 100 percent qualified for US income tax purposes. Both companies’ dividends are taxed at the now-permanent Bush-era rates of 5 percent to 15 percent for investors’ first USD450,000 a year of income for couples and USD400,000 for single filers. Above that the maximum tax rate is 20 percent.

Canadian investors enjoy favorable tax status for Crescent Point and Bird Construction. For US investors, dividends paid by both companies into IRAs aren’t subject to 15 percent Canadian withholding tax, though they are withheld at a 15 percent rate if held outside of an IRA.

Dividend taxes withheld from US non-IRA accounts can be recovered as a credit by filing a Form 1116 with your US income taxes. The amount of recovery allowed per year depends on your own tax situation.