Royal Bank of Canada (RY), Toronto-Dominion Bank (USA) (TD), Enbridge Inc (USA) (ENB): 3 Nova Scotia Picks You Must Buy This Month

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The Toronto-Dominion Bank (USA) (NYSE:TD) announced its conditional agreement to issue credit cards for Aeroplan, under the loyalty program owned by Aimia. CIBC is the former issuer of credit cards for Aimia. According to agreement, if CIBC matches with the terms of the bank’s deal by August 2013, it can continue to hold its partnership with Aimia. If CIBC continues, the The Toronto-Dominion Bank (USA) (NYSE:TD) will be entitled to $80 million to cover its transaction expenses.

The contract is for ten years, commencing January 2014. The bank would initially pay $95.32 million as an upfront to cover miles purchases annually for three years. The credit cards include extra premium cards for small Canadian owners and travel cards for frequent air travelers. The bank’s current credit card market is $20.8 billion as of May 2013, showing 35% increment year-over-year. This agreement is expected to increase the bank’s credit card market in North America.

With these, the bank’s P&C segment is expected to rise by 15% year-over-year, to $1.5 billion, and 8-10% year-over-year loan growth by the end of 2013.

Expansion and new contract will boost the company’s revenue

Enbridge Inc (USA) (NYSE:ENB) signed a $300 million contract in May 2013 with ConocoPhillips (NYSE:COP) and Total SA (ADR) (NYSE:TOT) E&P, the ConocoPhillips (NYSE:COP) Surmont Partnership, to provide terminal and transportation services. Terminal services can be defined as service rendered to store oil in tanks for a oil company. Under this contract the company will expand its existing infrastructure at Cheecham terminal. It will develop two 450,000 barrel tanks along with other installations to facilitate transportation. It is expected to commence service by the end of 2014.

Enbridge Inc (USA) (NYSE:ENB) also added the Athabasca and Waupisoo pipeline systems to this pipeline, which are connected to six oil sand projects. The company is expecting to connect nine producers to this pipeline by 2015. This expansion will add extra output for Surmount’s oil sand project. It is expected that company will have revenue growth of $165 million in 2013, and $195 million in 2014, as compared to $110 in 2012, from its oil sand system.

Enbridge Inc (USA) (NYSE:ENB)’s main revenue driver is its Canadian mainline from Western Canadian Sedimentary Basin in the U.S. mid-continent. Its well established oil infrastructure facilities in the mid-stream are a strong reason for revenue growth. Being optimistic towards future transportation demand, it expanded this pipeline from Northern Alberta to the U.S. Gulf Coast, which will be in service by the middle of 2014. The company announced continuity in adding more infrastructure facilities, expecting a rise in oils and production.

Further, it announced an expansion of the Canadian Mainline system into Eastern Canada, the Eastern U.S. Gulf Coast, and Canadian West Coast at an estimated cost of $200 million. The expansion will raise its capacity by 120,000 bpd, year-over-year, to a capacity of 570,000 bpd by the end of this year. Enbridge Inc (USA) (NYSE:ENB) is expecting revenue of $580 million in 2013 and $662 million in 2014 from this pipeline, compared to $432 million of 2012.

Conclusion

Increased mortgage rates and a major revenue generating wealth segment will bring favorable impact in increasing future revenue generation for Royal Canadian Bank. The Toronto-Dominion Bank (USA) (NYSE:TD)’s new agreements for issuing credit cards and its acquisition of Target’s credit card operations will boost its market share. Pipeline expansion and a new contract to provide terminal and transportation services will increase revenue in the future for Enbridge Inc (USA) (NYSE:ENB). Therefore, these stocks are recommended as a buy.

The article 3 Nova Scotia Picks You Must Buy This Month originally appeared on Fool.com.

Madhu Dube has no position in any stocks mentioned. The Motley Fool recommends The Bank of Nova Scotia (USA). Madhu is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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