Fresh off its addition to the CE Portfolio Aggressive Holdings, WestJet Airlines Ltd. posted company-record fourth-quarter earnings and boosted its dividend.

Earnings per share (EPS) for the fourth quarter of 2014 surged 34.6% to CAD0.70, helped by lower fuel costs. Revenue for the quarter was up 7.3% to CAD994.4 million, while yield (revenue per passenger per mile flown) ticked up by 0.7% to CAD0.1957.

Full-year EPS rose 21.2% to CAD2.46. 

Management also announced a 16.7% payout increase to CAD0.14 per share per quarter. WestJet has now raised its dividend five times since its initial declaration in November 2010, for total growth of 180% in less than five years.

Fuel costs declined 6.4% to CAD243.8 million.

Management expects fuel costs to decline by another 30% during the first quarter due to crude oil’s steep slide but won’t pass its savings on to air travelers, noting that it prices tickets according to supply and demand.

And demand remains strong, with fourth-quarter and full-year load factors of 79.7% and 81.4%, respectively. As long as seats on its planes are approximately 80% filled, there’s no reason to trim fares.

Fleet capacity increased by 7.3% to 6.4 billion available seat miles, while passenger traffic was up 6.5% to 5.1 billion revenue passenger miles.

WestJet could see some erosion due to turmoil in energy markets, as the Calgary-based airline is exposed to the Alberta market. But management recently noted that the airline has a national footprint and southern exposure as well.

Further growth will be driven by continuing expansion of WestJet Encore, unbundling of fares, the introduction of WestJet Rewards tiers for frequent fliers and the successful launch of its first transatlantic service to Dublin, Ireland.

And all this will be helped by cheaper jet fuel. WestJet is a buy for long-term growth and income up to $32.

Best to Buy Brookfield Renewable

Brookfield Renewable Energy Partners LP, the December 2014 Conservative Best Buy, posted another solid set of financial and operating numbers for the fourth quarter and also announced a 7.1% dividend increase, its sixth such move since March 2011.

Brookfield Renewable’s (TSX: BEP-U, NYSE: BEP) total generation for the three months ended Dec. 31, 2014, was up 10.8% year-over-year to 5,839 gigawatt hours (GWh), and exceeded the long-term average of 5,770 GWh.

The hydro portfolio performed in line with the long-term average, with generation of 4,943 GWh. That was up 8.6% compared to the prior corresponding period.

Strong inflows in Ontario and improved hydrological conditions in New England and Louisiana, partly offset by a return to more normal inflows in New York, Tennessee and North Carolina, boosted performance from existing hydro assets.

Brazilian operations came in below expectations due to continuing drought-like conditions but were helped by participation in the national balancing pool and by successful marketing initiatives that captured high selling prices for non-contracted generation.

Wind generation surged by 67% to 840 GWh in the fourth quarter, very close to the long-term average of 852 GWh. Generation from existing assets was up due to improved wind conditions across the U.S. portfolio. The wind portfolio in Ireland, which was acquired in June 2014, contributed 299 GWh.

Total generation for 2014 was 22,548 GWh compared with the long-term average of 23,296 GWh and to 22,222 GWh in 2013.

Revenue grew by 3.8% for the quarter and was flat for the year.

Adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) for the fourth quarter were up marginally to $273 million, while funds from operations slipped to $116 million from $137 million a year ago due to higher expenses.

Adjusted EBITDA for 2014 was $1.216 billion and FFO were $560 million, compared with $1.208 billion and $594 million, respectively, in 2013.

Management continues to execute on its growth strategy, with two major acquisitions in Brazil on track to close during the first quarter and two development projects in Ireland proceeding on schedule toward start-up in July 2015.

And the balance sheet remains healthy following the completion of $1 billion in moves to refinance existing obligations, extend maturities and reduce interest costs. The company has ample liquidity—$1 billion as of Dec. 31, 2014—to support investment in long-term growth.

Brookfield Renewable Energy Partners—yielding 5.3%—is a buy under $34 for income and growth.

Aggressive Update

The downturn in the oil patch is hitting services firms, as Aggressive Holding Newalta Corp. on Feb. 4, 2015, announced a number of cost-cutting initiatives, including the elimination of approximately 180 jobs, or about 15% of its overall workforce, and the consolidation of offices in a bid to improve margins.

These steps will shave about CAD25 million off annual expenses.

Newalta (TSX: NAL, OTC: NWLTF) will also realize approximately CAD15 million in overhead savings upon completion of the sale of its industrial division, which was announced in December 2014 and remains on track to close during the first quarter.

Management expects all savings to flow to earnings before interest, taxation, depreciation and amortization (EBITDA), though the overall impact will likely be offset by the decline in the price of oil.

Newalta’s sale of its industrial division to private equity firm Birch Hill Equity Partners for CAD300 million in cash leaves it a pure-play oilfield waste services provider and enables management to focus on its core growth divisions, New Markets and Oilfield.

And new CEO John Barkhouse will continue to drive efforts to cut costs and maximize efficiencies.

At the same time, management’s initial CAPEX program for 2015 of CAD190 million represents a 6% increase over 2014.

Newalta plans to spend on CAD165 million for growth projects, including its full-scale Heavy Oil facility in Fort McMurray, Alberta, new Oilfield satellite facilities in Canada and the U.S., and an additional drill cuttings treatment unit.

CAPEX will be funded from both cash flow from operations and proceeds from the sale of the Industrial assets.

As a higher-margin pure-play oilfield waste services provider Newalta will likely trade at a higher multiple in line with immediate competitors such as Secure Energy Services Inc.

Newalta remains a buy for aggressive investors up to $20.

Noranda Income Fund has posted an impressive 24.5% rally on the Toronto Stock Exchange since it plunged to CAD2.00 per share on Dec. 1, 2014, in the aftermath of its third-quarter earnings report.

That’s probably a function of yield chasers scooping up a stock that’s paying 20.1% even after this surge. There’s likely some bit of speculation too that Noranda’s only asset, a zinc processing facility in Québec, will be viable after the May 2017 expiration of its supply agreement with Glencore Canada.

The processing facility is the second-largest in North America and the largest in eastern North America, where the majority of zinc customers are located. Noranda remains a buy under $4 for aggressive investors.

Last month I cut longtime Portfolio Holding Extendicare Inc. to “hold” due to questions I had about management’s ability to ramp up revenue and cash flow in the aftermath of the company’s sale of its U.S. operations.

Net proceeds from the sale of USD220 million were underwhelming relative to market expectations, sparking a mini sell-off in mid December 2014.

And, more critically, the payout ratio based on adjusted funds from operations (AFFO) from Extendicare’s remaining Canadian operations and a current annualized dividend rate of CAD0.48 per share left a payout ratio of 115%.

Shortly after the January 2015 CE went to press management announced the acquisition of the Revera Home Health business from Revera Inc for CAD83 million.

Extendicare will use a bridge loan and cash on hand to cover the cost of the deal. The ultimate source of funds will be proceeds from the sale of its U.S. operations, which is expected to close during the second quarter.

Management forecast the acquisition will add approximately CAD0.10 to Extendicare’s annualized AFFO per share in the first year post closing. Extendicare’s U.S. AFFO per share for the 12 months ended Sept. 30, 2014, was approximately CAD0.41.

It’s a smart deal that adds scale to Extendicare’s ParaMed Home Health Care division, which is the largest private-sector home health care provider in Ontario. The Revera deal will boost ParaMed revenue by 3% to 4% during the first year, to approximately CAD189 million, 98% of which is generated from government contracts.

The deal allows Extendicare to expand its home health care presence into five additional provinces and broadens an already robust home health care platform. It also demonstrates that there are significant and attractive near-term opportunities for Extendicare to invest in and grow its existing Canadian business.

It’s a first and important step toward the re-investment into Canada of proceeds from the sale of its U.S. business. Extendicare remains a hold.

Conservative Update

If your thing is consistent dividend growth, there really isn’t a better show than Shaw Communications Inc.

Every January since 2009 the Calgary, Alberta-based telecom has announced a dividend increase. Shaw has raised its monthly dividend a total of 18 times since January 2005.

And so it goes that Shaw (TSX: SJR/B, NYSE: SJR) announced a 7.7% increase for calendar 2015 when it reported fiscal 2015 first-quarter results in January.

Net income for the three months ended Nov. 30, 2014, was down 7.3% to CAD227 million, as earnings per share dipped to CAD0.46 from CAD0.51. The decline was primarily attributable to higher costs driven by the launch of its new video streaming service, shomi, a joint venture with Rogers Communications Inc.

Higher amortization costs and an equity loss on a joint venture also contributed.

Growth for Shaw’s two business-focused units helped offset softer consumer and media results.

Subscriber numbers were mixed, with a slowdown in cable TV attrition and strong Internet customer growth offset by lower satellite TV and digital phone connections.

All told, revenue for the period was up 2% to CAD1.39 billion. And free cash flow for the quarter was up 22.9% to CAD193 million.

Shaw’s trailing 12-month payout ratio rose to 64.4% from 60.8% as of Aug. 31, 2014.

The Business Infrastructure unit is poised for solid growth in the aftermath of the September 2014 ViaWest Inc. acquisition, which bolsters Shaw’s cloud computing credentials.

Media will likely suffer through continuing softness in the TV advertising space, while TV subscriber defense continues to improve and broadband growth is trending very well.

Shaw’s focus on building a WiFi network rather than enter Canada’s wireless market should also support future dividend growth. Shaw’s WiFi network now includes more than 55,000 free access points for its customers, 600,000 of whom have registered to use it.

Shaw’s form is likely to hold. And in January 2016, we’ll likely see another 7%-plus dividend increase. Shaw Communications—yielding 3.9%—is a buy up to $29.