Title: Equity Research
Headline: Identifying High Yield Opportunities – 2011 Outlook
The NBF Daily Bulletin
Industry Comment
Equity Research
National Bank’s 2016 Dividend All-Stars
Industry Ratings: See
Appendix 1
(NBF Economics &
Strategy Group)
National Bank analysts collectively cover 350+ TSX-listed equities, of which roughly half offer
investors income in the form of dividends or distributions. To help navigate this universe we
assemble a portfolio that contains 33 of NBF’s favorite yield ideas, the basket spanning a variety
of industries, sizes and liquidity, but sharing three investment criteria:
1. Dividend/distribution yield approximately 4% or greater;
2. Extremely low risk of the current payout proving unsustainable; and
3. Positive analyst bias regarding the prospects for share/unit price.
Takeaways



Trevor Johnson
Leon Aghazarian
Greg Colman
Cameron Doerksen
Patrick Kenny
Shubha Khan
Matt Kornack
Endri Leno
Rupert Merer
Brian Milne
Kyle Preston
Peter Routledge
Adam Shine


NBF’s 2015 Dividend All-Stars portfolio introduced January 26, 2015 returned income of
6.0% and realized an average price return of -17.7% over the last twelve months, this
-11.7% total return ahead of the S&P/TSX Composite’s -15.0% for the same period (2.9%
income and -17.9% price return for the index).
Despite recent weakness the average annual total return of NBF’s Dividend All-Stars over
its four year history is 6% compared to 2% from the S&P/TSX. Sixteen of the 31 names
highlighted as 2015 All-Stars (52%) outpaced the market, compared to 38% in 2014
(16/42), 71% in 2013 (27/38) and 85% in 2012 (28/33).
Ten All-Stars increased dividends in 2015 (AltaGas, Bank of Montreal, CIBC, Exchange
Income, First National, Gibson, Innergex, Inter Pipeline, National Bank and Premium
Brands) while there were two cuts (Canadian Energy Services and Crescent Point). To date
there have been 55 dividend/distribution increases versus four cuts from this portfolio.
The average yield of an All-Star is elevated at 6.4%, but payout is easily funded for
each, with most equities having the capacity to grow dividends/distributions over time.
For investors seeking stable, predictable, elevated income and exposure to high quality
companies, the following basket reflects NBF’s favourite ideas for 2016.
NBF DIVIDEND ALL-STARS 2016 PORTFOLIO
Share/Unit Dividend /
Yield
Analyst
Equity
Ticker
Price
Distribution
Ag Growth International
AFN-T
$28.64
$2.40
Colman
8.4%
American Hotels
HOT.UN-T $10.11
US$0.65
Johnson
8.9%
Bank of Montreal
BMO-T
$74.57
$3.36
4.5% Routledge
Boralex
BLX-T
$15.03
$0.52
Merer
3.5%
Chorus Aviation
CHR.B-T
$5.32
$0.48
9.0% Doerksen
Cominar
CUF.UN-T $14.57
$1.47
10.1% Kornack
Crombie
CRR.UN-T $13.23
$0.89
Kornack
6.7%
Enbridge
ENB-T
$46.45
$2.12
Kenny
4.6%
Enbridge Income Fund
ENF-T
$28.87
$1.87
Kenny
6.5%
Exchange Income Corp
EIF-T
$23.43
$1.92
Johnson
8.2%
First Capital Realty
FCR-T
$18.74
$0.86
Kornack
4.6%
First National Financial
FN-T
$20.90
$1.55
Khan
7.4%
High Arctic Energy Services
HWO-T
$3.16
$0.20
Colman
6.3%
Innergex Renewable Energy
INE-T
$11.40
$0.62
Merer
5.4%
Inter Pipeline
IPL-T
$22.60
$1.56
Kenny
6.9%
Manitoba Telecom Services
MBT-T
$29.52
$1.30
Shine
4.4%
MCAN Mortgage Corp
MKP-T
$12.14
$1.16
Khan
9.6%
Milestone Apartments
MST.UN-T $14.99
US$0.55
Kornack
5.4%
Morneau Shepell
MSI-T
$14.65
$0.78
Johnson
5.3%
Northland Power
NPI-T
$19.31
$1.08
Merer
5.6%
Pembina Pipeline
PPL-T
$31.71
$1.83
Kenny
5.8%
Pure Multi-Family
RUF.U-V
US$4.65
US$0.38
Johnson
8.2%
Savaria Corp
SIS-T
$5.10
$0.20
3.9% Aghazarian
Slate Retail
SRT.UN-T $14.27
US$0.78
Leno
7.9%
Student Transportation
STB-T
$4.91
$0.44
Colman
9.0%
Sun Life Financial
SLF-T
$39.53
$1.56
3.9% Routledge
Toronto Dominion
TD-T
$52.75
$2.04
3.9% Routledge
TransAlta Renewables
RNW-T
$9.83
$0.88
Merer
9.0%
Transcontinental
TCL.A-T
$18.13
$0.68
Shine
3.8%
Vermillion Energy
VET-T
$37.72
$2.58
Preston
6.8%
Whitecap Resources
WCP-T
$7.62
$0.45
Milne
5.9%
WPT Industrial
WIR-T
US$9.10
US$0.76
Johnson
8.4%
WSP Global
WSP-T
$40.13
$1.50
3.7% Aghazarian
Average
6.4%
Source: NBF, Reuters; Priced January 28th close
Page 2
2015 Recap & 2016 Outlook


The primary objective of the NBF Dividend All-Star portfolio is to provide elevated income to
investors through high quality, diversified companies that our analysts view favourably. The
2016 portfolio’s average 6.4% yield is relatively high and compelling in the context of
investment alternatives, but more importantly it is underpinned by stable and growing cash
flows, healthy balance sheets and encouraging operating outlooks that provide confidence
that the respective management teams will be increasing payout to investors over time, not
decreasing. So far this is overwhelmingly the case, with ten All-Stars increasing dividends
in 2015 (AltaGas, Bank of Montreal, CIBC, Exchange Income, First National, Gibson,
Innergex, Inter Pipeline, National Bank and Premium Brands), building upon the eight that
increased payout in 2014, 12 in 2013 and 15 in 2012. A total of 45 All-Stars have increased
dividends/distributions since inception (52% of equities included), versus just four cuts, and
given the collectively low forward payout ratios our analysts project we believe the 2016
basket is well-positioned to continue increasing capital returned to investors.
Despite the negative returns the Dividend All-Stars still outperformed, posting a total return
of -11.7% (6.0% income & -17.7% price) versus the S&P/TSX Composite’s -15% (2.9%
income & -17.9% price) for the same twelve month period.
H1/15 PERIOD RETURN*
Equity
Ticker
% Price
Period
+
=
Yield
Change
Ag Growth International
AltaGas
American Hotels
ARC Resources
Bank of Montreal
Boralex
Cardinal Energy
Crescent Point
Crombie REIT
First National Financial
Gibson Energy
Inergex Renewable Energy
Inter Pipeline
KP Tissue
Milestone Apartments
Morneau Shepell
Mullen Group
Premium Brands
Pure Multi-Family
Superior Plus
Vermilion Energy
Whitecap Resources
WSP Global
AFN
ALA
HOT.UN
ARX
BMO
BLX
CJ
CPG
CRR.UN
FN
GEI
INE
IPL
KPT
MST.UN
MSI
MTL
PBH
RUF.U
SPB
VET
WCP
WSP
-14.5%
-16.2%
-5.0%
-16.9%
-7.9%
2.5%
-10.3%
-39.4%
-8.5%
-21.2%
-23.9%
-10.7%
-21.0%
-23.0%
3.8%
-7.1%
-8.2%
35.1%
9.9%
-7.4%
-24.5%
-12.5%
17.6%
2.3%
2.1%
4.2%
2.7%
2.0%
2.0%
3.2%
4.5%
3.3%
3.4%
2.6%
2.6%
2.2%
2.1%
2.5%
2.3%
2.9%
2.9%
4.1%
3.0%
2.3%
3.2%
2.1%
-12.2%
-14.1%
-0.8%
-14.2%
-5.8%
4.5%
-7.1%
-34.9%
-5.2%
-17.8%
-21.3%
-8.1%
-18.7%
-21.0%
6.4%
-4.8%
-5.3%
38.0%
14.0%
-4.4%
-22.2%
-9.3%
19.7%
Dropped Mid-Year
Chemtrade Logistics
Enercare
MCAN Mortgage
CHE.UN
ECI
MKP
-10.5%
-9.1%
-22.9%
2.8%
2.7%
4.1%
-7.7%
-6.4%
-18.8%
Added Mid-Year
Cdn Energy Services
CIBC
Dream Global REIT
Exchange Income Corp
National Bank
CEU
CM
DRG.UN
EIF
NBF
-9.7% +
-5.4% +
All-Stars Average
S&P/TSX Composite
2.9%
1.5%
=
=
H2/15 PERIOD RETURN**
2015 PERIOD RETURN***
Total % Price
Period
+
=
Return Change
Yield
Total % Price
Period
+
=
Return Change
Yield
Total
Return
-32.9%
-12.9%
3.8%
-7.9%
1.8%
10.4%
-46.7%
-27.9%
9.5%
17.5%
-24.7%
2.7%
-18.2%
-24.7%
15.7%
-6.2%
-22.5%
22.6%
-2.1%
-6.9%
-16.7%
-27.8%
-6.6%
-6.8%
-3.9%
-35.5%
-15.6%
-0.7%
-11.1%
-0.4%
8.4%
-50.3%
-31.8%
5.9%
13.2%
-28.2%
-0.2%
-21.1%
-27.4%
13.2%
-8.7%
-25.7%
20.5%
-5.8%
-10.2%
-19.7%
-31.5%
-8.4%
2.6%
2.7%
4.4%
3.2%
2.3%
1.9%
3.6%
3.9%
3.6%
4.3%
3.4%
2.9%
2.9%
2.7%
2.5%
2.4%
3.2%
2.1%
3.7%
3.3%
3.1%
3.7%
1.8%
-44.1%
-4.4%
-14.5%
8.8%
-15.9%
2.5%
2.5%
4.3%
4.4%
2.4%
-12.2% +
-13.3% +
3.1%
1.8%
=
=
-44.9%
-29.2%
-5.6%
-26.1%
-8.3%
11.2%
-55.4%
-58.7%
-3.1%
-10.8%
-45.3%
-10.9%
-37.6%
-44.1%
17.6%
-15.1%
-31.8%
62.8%
3.5%
-16.9%
-39.4%
-40.0%
7.8%
4.5%
4.4%
8.5%
5.3%
4.1%
4.0%
6.4%
6.8%
6.6%
6.7%
5.2%
5.2%
4.5%
4.1%
5.1%
4.5%
5.8%
5.7%
8.2%
6.1%
4.7%
6.5%
4.2%
-40.3%
-24.8%
2.8%
-20.8%
-4.1%
15.2%
-48.9%
-51.9%
3.5%
-4.1%
-40.1%
-5.7%
-33.1%
-40.0%
22.6%
-10.6%
-26.0%
68.5%
11.7%
-10.8%
-34.8%
-33.6%
12.0%
-10.5%
-9.1%
-22.9%
2.8%
2.7%
4.1%
-7.7%
-6.4%
-18.8%
-41.5%
-1.9%
-10.2%
13.2%
-13.5%
-44.1%
-4.4%
-14.5%
8.8%
-15.9%
2.5%
2.5%
4.3%
4.4%
2.4%
-41.5%
-1.9%
-10.2%
13.2%
-13.5%
-9.1%
-11.5%
-17.7% +
-17.9% +
6.0%
2.9%
=
=
-11.7%
-15.0%
Source: NBF, company reports
* From basket introduction January 26,2015 to July 26, 2015
** From July 27, 2015 to January 26, 2016
*** From January 26, 2015 to January 27, 2015

Despite recent weakness the average annual total return of NBF’s Dividend All-Stars over
its four year history is 6%, compared to 2% from the S&P/TSX.
LEGACY NBF DIVIDEND ALL-STARS PERFORMANCE
S&P/TSX
Period
Period Yield + Price Return = Total Return
Total Return
2012
6.0%
6.8%
12.8%
3.1%
2013
5.9%
12.5%
18.4%
9.3%
2014
5.8%
-1.3%
4.5%
10.6%
2015
6.0%
-17.7%
-11.7%
-15.0%
Average
5.9%
0.1%
6.0%
2.0%
Source: NBF, Thomson
Page 3

In recent years dividend equities have generally led the broader market, and there
continues to be enthusiasm amongst investors for income. Our continued positive bias and
confidence in the Dividend All-Stars product stems from: 1) Canada’s interest rate
environment remains favorable, with little evidence to suggest a near-term rise in rates; 2)
muted enthusiasm for Canada’s resource sector is helping contribute to favorable funds
flow into diversified income equities; 3) balance sheet health for the group is collectively
strong; and 4) low payout ratios support our outlook for continued dividend growth, which is
one of the primary determinants of share/unit price appreciation.

Our performance has been negatively impacted by overexposure to Canada’s resource
sector in recent years, as a disproportionate amount of NBF’s coverage list is tied to energy.
One meaningful change to this year’s basket is a rebalancing to a far lower weighting
towards equities tied to the resource sector given its continued uncertainty, the 2016
portfolio breakdown outlined below.
2016 DIVIDEND ALL-STARS BY SECTOR
Real Estate
American Hotels
Cominar
Crombie
First Capital Realty
Milestone Apartments
Pure Multi-Family
Slate Retail
WPT Industrial
Financials
Bank of Montreal
First National Financial
MCAN Mortgage Corp
Sun Life Financial
Toronto Dominion
Power
Boralex
Innergex Renewable
Northland Power
TransAlta Renewables
Diversified
Morneau Shepell
Savaria Corp
Transcontinental
Energy
Vermillion Energy
Whitecap Resources
Energy Services
High Arctic
Infrastructure
WSP Global
Source: NBF
Pipelines/Utilities
Transportation
Enbridge
Chorus Aviation
Enbridge Income Fund
Exchange Income
Inter Pipeline
Student Transportation
Pembina Pipeline
Industrial
Ag Growth International
Media & Telecom
Manitoba Telecom
Page 4
Table of Contents
Ag Growth International AFN-T
American Hotels HOT.UN-T
Bank of Montreal BMO-T
Boralex BLX-T
Chorus Aviation CHR.B-T
Cominar CUF.UN-T
Crombie CRR.UN-T
Enbridge ENB-T
Enbridge Income Fund ENF-T
Exchange Income Corp EIF-T
First Capital Realty FCR-T
First National Financial FN-T
High Arctic Energy Services HWO-T
Innergex Renewable Energy INE-T
Inter Pipeline IPL-T
Manitoba Telecom Services MBT-T
MCAN Mortgage Corp MKP-T
Milestone Apartments MST.UN-T
Morneau Shepell MSI-T
Northland Power NPI-T
Pembina Pipeline PPL-T
Pure Multi-Family RUF.U-V
Savaria Corp SIS-T
Slate Retail SRT.UN-T
Student Transportation STB-T
Sun Life Financial SLF-T
Toronto Dominion TD-T
TransAlta Renewables RNW-T
Transcontinental TCL.A-T
Vermillion Energy VET-T
Whitecap Resources WCP-T
WPT Industrial WIR-T
WSP Global WSP-T
All pricing as at January 26, 2015
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Page 5
Title: Ag Growth International Inc. - AFN (T) $53.17
Price: $53.17
StockRating: Outperform
TargetPrice: $57.00
Headline: Domestic Grain Storage & Handling Leader with Emerging
Department Theme Piece
Machinery
Ag Growth International Inc.
$29.32
AFN (T)
Sector Perform
Stock Rating:
$37.00
Target:
Above Average
Risk Rating:
34%
2016E
4.9x
3.2x
4.0x
5.0x
Valuation
2014
2015E
2016E
P/E
93.1x
-282.8x
9.9x
EV/EBITDA
6.5x
10.7x
8.7x
Target EV/EBITDA
7.8x
12.3x
10.0x
All amounts in Cdn$ unless otherwise noted.

Dividend looks compelling with a 66% payout ratio.
AFN pays a $2.40/year dividend, or ~$34 mln annually, well
covered by our estimated ~$52 mln in capital available after
interest ($18 mln), taxes ($6 mln) and maintenance capital
($13 mln).

Sector Perform, $37.00 target.
Our target is driven by a 10.0x 2016 EV/EBITDA, above the
historical average of 8.7x, but below peak multiples of 10.6x.
While we believe longer-term investors, who subscribe to the
notion that transient weather events have again distracted
investors from AFN fundamentals, may be interested in the
normally premium-priced AFN at any time now, those with a
trading mindset or who believe further turbulence is ahead in
the upcoming quarters may hang on for an entry point closer
to our trough share price estimation
1: year end debt net of cash vs. TTM EBITDA
Industry Rating: Overweight
(NBF Economics & Strategy Group)
Greg Colman - (416) 869-6775
[email protected]
Andrew Jacklin, CFA - (416) 869-7571
[email protected]
Michael Storry-Robertson – (416) 507-8007
[email protected]
Westley Macdonald-Nixon - (416) 507-9568
[email protected]
Stock Performance (Source: Thomson One)
500,000
$58.00
450,000
$54.00
400,000
$50.00
350,000
$46.00
300,000
$42.00
250,000
200,000
$38.00
150,000
$34.00
100,000
$30.00
50,000
$26.00
0
Jan-15
Company Profile:
Ag Growth International Inc. (Ag Growth), headquartered in
Winnipeg, MB, is a leading manufacturer of grain handling
equipment, including grain augers, belt conveyors, aeration
equipment and storage bins. Ag Growth has operations in
Alberta, Manitoba, Saskatchewan, Indiana, South Dakota
and Finland, and distributes equipment across
approximately 1,400 dealers in North America.
Source: ThomsonONE, NBF
Volume
Price
Dec-15
2015E
1.7x
6.8x
Nov-15
2014
Debt/EBITDA 1
Interest Coverage
Oct-15
Balance Sheet
Sep-15
2016E
$ 572.4
$ 88.7
$ 3.80
$ 2.40
$ 2.91
Leverage to trend down.
AFN exited Q3/15 with a 1.9x debt/TTM EBITDA ratio, safely
below the 3.25x covenant limit which excludes convertible
debt from the calculation. We model leverage increasing to
2.3x in Q1/16 but ultimately move downwards to 1.8x exiting
2016 as stabilizing debt and modest EBITDA growth work to
maintain leverage at acceptable levels.
Aug-15
2015E
$ 448.6
$ 70.5
$ 3.19
$ 2.40
$ (0.12)

Jul-15
2014
$ 400.1
$ 78.2
$ 4.38
$ 2.40
$ 0.23
Memories of 2012? Attractive entry point draws close.
In the wake of the 2012 “once-in-a-century” drought, AFN
shares traded off heavily, eventually finding a bottom in
November 2012 at $27.84. We estimate that where AFN is
trading today, based on EV/EBITDA and dividend yield,
implies shares are within ~5%-10% (~$26-$28) of a valuation
implied bottom.
Jun-15
Revenue (mln)
EBITDA (mln)
CFPS
DPS
EPS

May-15
52-w eek High-Low
$57.72 - $27.94
253,120
Average Weekly Volume
Net Tangible Book Value per Share
$4.51
HIGHLIGHTS
Apr-15
14.3
$420.6
$323.4
$744.0
8.2%
Mar-15
Shares Outstanding (mln)
Market Capitalization (mln)
Net Debt/(Cash) (mln)
Enterprise Value (mln)
Dividend Yield
Estimates
Domestic Grain Storage & Handling Leader
with Emerging International Platform
Feb-15
Est. Total Return
NBF Dividend All-Star
Page 6
Title: American Hotel Income Properties - HOT.UN (T) Cdn$10.05
Price: Cdn$10.05
StockRating: Outperform
TargetPrice: Cdn$12.50
Headline: Compelling Mix of Yield & Growth
Department Theme Piece
Real Estate
American Hotel Income Properties
Cdn$10.05
HOT.UN (T)
Outperform
Stock Rating:
Cdn$12.50
Target:
NBF Dividend All-Star
Compelling Mix of Yield & Growth
Below Average
Risk Rating:
Est. Total Return
33.4%
HIGHLIGHTS
Stock Data:
Cash Yield
9.0%
Implied Price Return
24.4%
52-w eek High-Low

$11.43-$9.04
Bloomberg/Reuters:
HOT-U CN / HOT.UN-T
Forecasts:
FYE Dec. 31
2014a
Occupancy
81.4%
2015e
77.3%
2016e
77.2%
$70.27
$78.43
$79.58
Revenue (US$mln)
$93.1
$146.7
$183.0
EBITDA (US$mln)
$24.4
$41.8
$51.1
FFO/unit (US$)
$0.91
$0.94
$1.11
ADR (US$)
AFFO/unit (US$)
$0.83
$0.81
$0.95
Distribution/unit
C$0.90
C$0.90
US$0.65
99%
83%
60%
AFFO Payout Ratio
108%
96%
69%
EV/EBITDA
19.3x
12.7x
10.7x
P/FFO
11.0x
10.1x
8.7x
P/AFFO
12.1x
10.3x
8.8x
FFO Payout Ratio

Financial Data:
Units Outstanding (mln)
Market Capitalization (mln)
Cash (US$ mln)
Total Debt (US$ mln)
Net Debt to GBV
NAV per unit
34.8
$349.8
$17.8
50%
~$12.50
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
AHIP is a portfolio of 45 rail hotels and ~3,700 rooms,
located in 22 U.S. States largely under the “Oak Tree Inn”
banner. The properties are strategically located at or near
rail hubs, and are almost entirely occupied by four railroads
(Union Pacific, BNSF, CSX, CP) at minimum guaranteed
levels. AHIP also has 35 non-rail, branded hotels totalling
~3,300 rooms across 11 U.S. states.
Trevor Johnson, CFA, MBA - (416) 869-8511
[email protected]
Associates:
Endri Leno - (416) 869-8047
[email protected]
Kyle Stanley - (416) 507-8108
[email protected]
Alex Bauer - (416) 869-7535
[email protected]

$292.8

Largest U.S. railway lodging operator
HOT owns and operates a portfolio of 80 hotels totaling ~7,000
guestrooms, of which 45 Oak Tree Inn Hotels (3,718 guest
rooms) and 31 Penny’s Dinner restaurants cater to four of the
seven Class I rail operators whose employees have union
mandated downtime between shifts. The average four-year
remaining contract term on these hotels, encompassing ~77%
of the rail portfolio guestrooms, guarantees occupancy and
generates better revenue visibility than traditional hotels.
Despite weakness in oil and gas related markets, HOT’s
geographic diversification across 22 states should minimize
any material operational impacts.
Defensive portfolio attributable to diversified hotel mix
2015 saw the addition of 12 hotels to HOT’s non-rail hotel
portfolio, which now consists of 35 branded hotels (Hilton,
Marriott, InterContinental, etc.) totaling 3,330 guestrooms
located in close proximity to transportation hubs in secondary
and tertiary markets in the U.S. We believe that favourable U.S.
lodging fundamentals attributable to the ongoing U.S.
economic recovery and minimal new hotel supply which are
forecasted to drive low to mid-single digit growth in occupancy,
ADR and RevPAR through 2016 should provide a near-term
tailwind for the branded hotel portfolio.
Underleveraged relative to TSX hotel peers
At ~50% debt to GBV HOT’s capital structure is relatively
conservative with the bulk of its debt under long-term,
favourable fixed rate terms that translate to cash flow visibility.
Yield protected by conservative balance sheet and payout
AHIP’s 9.0% cash yield is well cushioned by a 69% 2016e
AFFO payout ratio and favorable operating backdrop. We use
an ~11x P/AFFO to derive our $12.50 target price, reiterating
an Outperform rating.
Stock Performance (Source: Thompson)
Page 7
Title: Great-West Lifeco Inc. - GWO (T) Cdn$22.00
Price: Cdn$22.00
StockRating: Outperform
TargetPrice: Cdn$27.00
Headline: High Dividend Yield Supported by Stable Operating Model
Department Theme Piece
Banking
Bank of Montreal
Cdn$71.69
BMO (T)
Sector Perform
Stock Rating:
Cdn$82.00
Target:
Below Average
Risk Rating:
Est. Total Return
HIGHLIGHTS
52-w eek Low -High
64.01 - 83.81
Shares Outstanding EOP (mln)
647
Market Capitalization ($mln)
$50,263
S&P/TSX Composite Weighting
2.66%
2014A
2015A
2016E
2017E
$6.59
$7.00
$7.42
$7.57
6%
6%
6%
2%
$6.41
$6.57
$7.18
$7.38
4%
3%
9%
3%
Dividend / Share
$3.08
$3.24
$3.40
$3.48
F/D Avg. Shares
648
647
646
650
9.7x
9.5x
Core Cash EPS
% Grow th
Net Inc. to Common EPS
% Grow th
Price / Earnings
Strengthening U.S. Platform and Solid
Capital Position Support Dividend Increases
19%
Stock Data:
(Year-End 10/31)
NBF Dividend All-Star
10.9x
10.2x
Core Cash Net Income
$4,277
$4,529
$4,797 $4,925
NI to Equity Holders
$4,277
$4,370
$4,788 $4,950
Canadian P&C
2,016
2,104
2,196
2,093
U.S. P&C
654
827
949
1,070
Wealth Management
777
845
966
1,090
Capital Markets
1,077
1,032
1,071
1,155
Corporate Services
(247)
(438)
(394)
(458)
Financial Data: (As of last quarter-end)
Price / Book Value
1.3x
Dividend Inform ation:
Quarterly Dividend Per Share
$0.84
Dividend Yield
4.7%
Industry Rating: Overweight
(NBF Economics & Strategy Group)
Company Profile: Bank of Montreal is the fourth largest
Canadian bank in terms of assets. BMO offers financial
services in Canada and in the U.S. (using its Harris brand)
through three lines of business. The Personal & Commercial
Banking Group provides a full range of financial products
and services to consumers and small businesses. The
Private Client Group encompasses all of BMO’s wealth
management operations. The Investment Banking Group
(BMO Capital Markets) offers full financial services to
institutional and government clients.
Peter Routledge - (416) 869-7442
[email protected]
Associate: Parham Fini - (416) 869-6515
[email protected]
Associate: Paul Poon - (416) 507-8006
[email protected]
 BMO has a dividend yield of 4.7%, supported by a solid capital
position and favourable relative exposure to U.S. retail banking.
 We expect that BMO will increase its dividend in Q3 f2016 and
every four quarters thereafter. BMO announced a dividend raise of
$0.02/share (3%) to $0.84/share effective in Q1 f2016. The bank’s
dividend payout ratio of 45% sits in the middle of the board of directors’
target payout range of 40%-50%. We project BMO to remain in the top
half of its target range owing to ongoing dividend raises. We forecast that
BMO will raise dividends/share by 5% in f2016 (including the
aforementioned dividend increase) and 2% in f2017.
 BMO maintains a solid capital position. The bank reported a Basel III
common equity tier 1 (CET1) ratio of 10.7% at the end of Q4 f2015,
trailing only CM amongst its Big Six bank peers. Management has
expressed confidence that 10.0% - 10.5% represents an appropriate
CET1 target ratio for the foreseeable future.
 BMO is well positioned to manage commodities risk and take
advantage of U.S. economic growth. The bank has proportionally less
credit exposure to the commodities sector (including oil & gas) and
proportionally greater exposure to the U.S. consumer than its domestic
peers. The latter upside will only be bolstered by the bank’s recently
completed acquisition of General Electric Capital Corporation’s
Transportation Finance business. The addition of this business should
build materially on existing (macro-economic) momentum and act as a
greater catalyst for growth both directly through organic growth and
indirectly by broadening the reach of BMO’s U.S. commercial banking
business.
 BMO is rated Sector Perform; price target of $82.00. As the U.S.
economy continues to build momentum, with favourable implications for
interest rates, we expect BMO’s U.S. retail banking platform to benefit
from increased economic activity and reduced pressure on loan
spreads. Our price target is 10.8x our estimated NTM EPS one year from
today, a 5% premium to the average of BMO’s rated peers.
Stock Performance
Page 8
Title: Innergex Renewable Energy Inc. - INE (T) Cdn$9.53
Price: Cdn$9.53
StockRating: Outperform
TargetPrice: Cdn$11.25
Headline: Recent dip creates attractive entry point
Department Theme Piece
Independent Power Producers & Energy Traders
Boralex Inc.
Cdn$14.51
BLX (T)
Outperform
Stock Rating:
Cdn$17.00
Target:
Above Average
Risk Rating:
Est. Total Return
HIGHLIGHTS
52-w eek High-Low (Canada)
$14.75 - $11.79
Bloomberg/Reuters: Canada
BLX CN / BLX-T
(Year-End Dec 31)
2014a
2015e
2016e
$ 195.2
$ 267.3
$ 318.5
adj. EBITDA (mln)
$ 137.6
$ 207.7
$ 247.9
adj. EPS (diluted)
$
CAFD/sh
$
0.57
Dividends/sh
$
0.52
Dividend Yield
Payout Ratio
(0.29) $
3.6%
92%
0.06
$
0.54
$
0.74
$
1.15
$
0.52
$
0.52
3.6%
3.6%
70%


45%
P/ CAFD
25.6x
19.5x
12.6x
adj. EV/EBITDA
15.9x
12.3x
10.2x

Financial Data:
Market Capitalization (mln)
$
Total Debt1 (mln)
$ 1,424
Price/Book Ratio
1.70x
Debt/Capital
Sh/O Basic (mln)
0.63x
952
64.8
Source: Thomson Financial and NBF estimates
1
Undervalued power developer; Additional
10%+ growth to CAFD/sh beyond 2017E
21%
Stock Data:
Revenue (mln)
NBF Dividend All-Star

September 30, 2015

Industry Rating: Underweight
(NBF Economics & Strategy Group)
Company Profile:
Boralex Inc. is a renewable energy producer with assets in
the USA, France, and Canada. The company has over 1090
MW (net) of generation assets, mostly under long term
contracts with an average contract life of ~16 years. The
company is constructing 3 additional renewable projects
that are expected to come on line by the end of 2017E. It
continues to target the development of additional renewable
generation projects in Canada and Europe and has excess
capital to deploy for further growth.
Stable power developer with a dividend yield of 3.6%
BLX’s has a stable business model of developing & operating
power assets (mostly wind and hydro) with long-term off-take
contracts; its weighted average contract duration is about 16
years. BLX has about 1,100 MW in operation and following
the acquisition of a 350 MW project pipeline in France, it has a
development portfolio of about 850 MW with about 150 MW
under construction. BLX currently pays a quarterly dividend of
$0.13/sh, or $0.52/sh annually.
Acquisitions could be funded from available liquidity
We believe that BLX has ~$100 mln of cash and available
credit to fund additional growth. With its current payout, it
could generate $30-$40 mln/yr of free cash to fund growth
internally for a few years (unless more growth is sourced).
Additional 10% + growth to CAFD/sh beyond 2017E
We estimated CAFD of $82 mln in ‘17E, up from $40 mln in
2015E. BLX had limited visibility on growth beyond 2017E,
but if it can build another 150 MW/yr from its pipeline, we think
it would need about $80 mln/yr in equity and could drive
CAFD growth of >$10 mln/yr. If funded internally, this could
drive >10%/yr in CAFD/sh growth.
COP 21 could drive growth; U.S. tax credit extension
To reduce global GHG emissions, the world needs more
renewable power. The U.S. Congress extended tax credits
(PTC/ITC) for solar and wind power that could drive growth.
$17 target and OP rating; BLX continues to execute
In Q4, BLX commissioned 100 MW of wind, bringing its
operations to 1,100 MW. Our target is based on a DCF with an
8.5% discount rate and is equal to 11x 2016E EV/EBITDA.
With its 2016E payout ratio at about 40%, dividend increases
could come and visibility on growth could support a higher
target.
Stock Performance
Daily BLX.TO
2015-01-26 - 2016-02-11 (TOR)
Line, BLX.TO, 2016-01-25, 14.51-0.16, (-1.09%)
Price
14.51
CAD
14
13.5
13
Rupert M. Merer, P.Eng CFA - (416) 869-8008
[email protected]
Associates:
Ryan Wong, P.Eng MBA – (416) 869-6763
[email protected]
Steven Hong – (416) 869-7538
[email protected]
12.5
12
Vol, BLX.TO, 2016-01-25, 86,278.00
Volume
86,278.00
0
Feb Mar
Apr
Q1 2015
May Jun
Q2 2015
Source: Reuters
Jul
Aug Sep
Q3 2015
Oct
Nov
Dec
Q4 2015
Jan Feb
Q1 16
Page 9
Title: Chorus Aviation Inc. - CHR.B / CHR.A (T) $6.10 / $6.08
Price: $6.10 / $6.08
StockRating: Sector Perform
TargetPrice: $6.25
Headline: Target and rating unchanged following in-line quarter
Department Theme Piece
Airlines
Chorus Aviation Inc.
$5.34 / $5.32
CHR.B / CHR.A (T)
Sector Perform
Stock Rating:
$6.00
Target:
NBF Dividend All-Star
Attractive (and safe) 9% yield
Above Average
Risk Rating:
Est. Total Return
21%
HIGHLIGHTS
Bloomberg/Reuters: Canada
52-week High-Low: CHR.b
$6.77 - $4.91
52-week High-Low: CHR.a
$6.77 - $4.91
Bloomberg/Reuters: Canada
Bloomberg/Reuters: Canada

Sustainable dividend yield of 9%
Chorus Aviation’s dividend is currently a very attractive 9.0%.
Importantly, because Chorus’s capacity purchase agreement
guarantees a fixed fee per aircraft regardless of how much the
aircraft flies, and the agreement sees highly variable cost
items (such as fuel) passed through to Air Canada, we view
the dividend as highly sustainable (dividend payout ratio of
~60% based on our 2015 estimate).

Growing higher margin leasing revenue
The $111 million annual fixed fee Air Canada pays Chorus
steps down for the 2021-2025 contract period (by 42%), but
the number of aircraft Chorus leases into Air Canada under
the CPA (at better margin market lease rates) will increase
from 21 Q400s today to 34 Q400s and 19 Dash 8-300s by
2020. Leasing revenue will increase from ~$64 million/year
today to ~$105 million/year by 2020.

Business development could provide upside
Chorus’ recent purchase of charter operator Voyageur
diversifies the company away from Air Canada and provides
opportunities for growth in good margin contract flying around
the world. In addition, Chorus is developing a third party
leasing business that will allow it to potentially lease out 19 of
its owned Dash 8-100 turboprops that are exiting the Air
Canada operations.

Valuation
Our $6.00 target is based on 6.0x EV/EBITDAR applied to our
forecast for next four quarter EBITDAR.
CHR/b CN / CHR.b
CHR/a CN / CHR.a
(Cdn$ mln.unless otherwise noted)
(FYE Dec. 31)
2014A
2015E
2016E
Revenue
$1,666
$1,585
$1,693
$297
$309
$341
$65
$42
$106
Adj. EPS (FD)
$0.78
$0.76
$0.87
Free Cash Flow
$137
Net Debt*
$990
$1,251
$1,352
EBITDA / Int Exp
10.6x
EBITDAR
Net Income
($61)
$26
13.0x
13.2x
EV / EBITDAR
6.1x
5.9x
5.3x
P/E
6.8x
7.0x
6.2x
*Includes off balance sheet operating leases
Other Data:
Shares Outstanding (mln)
Market Capitalization (mln)
Net Debt (mln) (incl. leases)
Net Debt-to-Cap. (incl. leases)
Enterprise Value (mln)
122
$653
$1,165
54%
$1,817
Dividend per share
$0.48
Dividend yield
9.0%
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
Chorus Aviation is the largest regional airline and the
second largest airline in Canada based on fleet size and
number of routes operated. Chorus and Air Canada are
parties to a capacity purchase agreement under which Air
Canada purchases Chorus’s capacity based on
predetermined rates.
Cameron Doerksen, CFA - (514) 879-2579
[email protected]
Associate:
Umayr Allem, CFA, MBA - (416) 869-8577
[email protected]
Stock Performance
Page 10
Title: Artis REIT - AX.UN (T) Cdn $xx
Price: Cdn $xx
TargetPrice: Cdn $18.00
Headline: A Good Choice for Extra Yield
Department Theme Piece
Real Estate
Cominar REIT
Cdn$14.20
CUF.UN (T)
Outperform
Stock Rating:
Cdn$18.75
Target:
Below Average
Risk Rating:
42.4%
Stock Data:
52-w eek Low
$13.70
52-w eek High
$19.97
Bloomberg/Reuters:
(Year-End Dec. 31)
13A
14A
15E
16E
17E
$1.77
$1.85
$1.80
$1.81
$1.87
AFFO
$1.49
$1.57
$1.54
$1.55
$1.61
% change (FFO)
4.4%
-2.5%
0.4%
3.4%
8.0x
7.7x
7.9x
7.9x
7.6x
9.6x
9.0x
9.2x
9.2x
8.8x
Targe t Multiples
Target / FFO
10.6x
10.2x
10.4x
10.4x
10.0x
Target / AFFO
12.6x
11.9x
12.1x
12.1x
11.6x
$1.44
$1.46
$1.47
$1.47
$1.47
P / AFFO
Distribution
HIGHLIGHTS
Attractive Distribution Yield: Cominar offers investors an
attractive 10.4% yield when compared with the large Diversified
and Office REITs at 7.8% and 8.2%, respectively. Looking at AFFO
yield, which adjusts for differences in payout ratios, CUF also offers
a premium to both its diversified and office peers.
Geographic Exposure: Amid the weakness seen in W. Canada,
Cominar provides investors a portfolio that is largely insulated from
these risks (AB is only ~5% of NOI). The majority of its portfolio is
located in Quebec (>75% of NOI) which should provide downside
protection on the back of stable economic and property market
fundamentals.
Strong Internal Management Team: Michel Dallaire and his team
have been a part of the internal management of Cominar since it
went public in 1998 and are the continuation of a family legacy in
the Quebec real estate market since Cominar’s founding in 1965 by
Jules Dallaire. As the largest commercial property owner in the
province, it has a thorough understanding of the market dynamics,
leasing environment and is the go-to REIT for off-market
transactions. While Cominar is actively pursuing a targeted
cross-Canada diversification strategy in order to complement its
Quebec exposure, we view its concentration and expertise in the
province as a competitive advantage not easily replicated in other
public entities.
Valuation Discount: Cominar currently trades at a discount to its
large diversified peers, trading at 9.1x our 2016 AFFO vs. the
diversified and office comps at 10.6x and 13.4x, respectively. CUF
sold off significantly in 2015 and has come close to trough 08/09
multiples. As one of the largest diversified REITs with a strong
internal management team and balance sheet, we view the current
correction as overdone. Through unit buybacks, asset sales and
leasing at Target we expect a return to FFO/unit growth in late 2016
and de-leveraging.

CUF-U / CUF.un
FFO
Curre nt Multiple s
P / FFO
Price Decline Presents Value Opportunity
Given Central Canada Focussed Portfolio
AFFO Payout
97%
93%
95%
95%
91%
Tax Deferral
75%
82%
82%
82%
82%


Financial Data:
Units Outstanding (mln) - Diluted for ITM Options
169.8
Market Capitalization (mln)
$2,411
Net debt (including convertible debt & cash from options, mln)
$4,492
Enterprise Value (mln)
$6,903
Debt / Total Assets (current)
54%
Debt / Total Assets (including convertible debt, current)
54%
Net Asset Value (NAV) / Cap rate
$18.65 / 6.60%
Debt / Market Value of Assets (using NAV, excl' converts)
58%
Debt / Market Value of Assets (using NAV, incl' converts)
58%
Premium to NAV
-23.9%
Current Distribution (annualized)
$1.47
Current Distribution yield (annualized)

10.4%
M ajo r Unitho lders (mln) (as per Tho mso n One, 26-Jan-16)
Units
%
Ivanhoe Cambridge
13.2
7.8%
CIBC Asset Management
10.5
6.2%
Dallaire Family (incl' units held through AM Investments)
8.3
4.9%
Sources: NBF, Thomson One, OSC Bullet in
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Stock Performance
$20.00
9.0
$19.50
8.0
$19.00
$18.50
7.0
$18.00
6.0
$17.50
Unit Price ($)
Company Profile:
Cominar is the largest commercial property owner in the
Province of Quebec and one of the largest diversified REITs
in Canada. CUF owns a real estate portfolio of 564
properties consisting of office, retail and industrial /
mixed-use buildings totalling ~45 million sq. ft. in
Quebec, Ontario, Western and Atlantic Canada. The REIT is
led by Michel Dallaire, one of Quebec’s foremost
entrepreneurs with a long track record of creating wealth
through various real estate cycles.
Matt Kornack - (416) 507-8104
[email protected]
$17.00
5.0
$16.50
4.0
$16.00
$15.50
Associate: Dawoon Chung - (416) 507-8102
[email protected]
Associate: Ammar Shah - (416) 869-7476
[email protected]
3.0
$15.00
2.0
$14.50
$14.00
1.0
$13.50
$13.00
Jan-14
Source: Bloomberg
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
0.0
Jan-16
Trading Volume (Millions)
Est. Total Return
NBF Dividend All-Star
Page 11
Title: Artis REIT - AX.UN (T) Cdn $xx
Price: Cdn $xx
TargetPrice: Cdn $18.00
Headline: A Good Choice for Extra Yield
Department Theme Piece
Real Estate
Crombie REIT
Cdn$13.08
CRR.UN (T)
Outperform
Stock Rating:
Cdn$14.75
Target:
Below Average
Risk Rating:
Defensive Name with Internal Growth
Opportunities and Intensification Potential
19.6%
Stock Data:
52-w eek Low
$12.26
52-w eek High
$13.79
Bloomberg/Reuters:
(Year-End Dec. 31)
HIGHLIGHTS
Attractive Yield: Crombie offers an attractive yield of 6.8% vs.
5.3% for its large-cap retail comparables (REI.un, FCR, CHP.un,
SRU.un & CRT.un). Adjusting for differences in payout ratios, the
REIT’s AFFO yield still trades at an attractive ~100 bps premium
to this same peer group.
Defensive Structure & Diversification: CRR has one of the
longest weighted average terms to maturity on leases in the
Canadian public retail REIT universe at 11.3 years. Likewise, its
weighted average debt maturity is 7.1 years. The REIT’s portfolio
of defensive grocery and drug store anchored retail plazas jives
well with its conservative structure.
Transformational Safeway Acquisition: Through the Canada
Safeway portfolio acquisition, Crombie enhanced geographic
diversification, and increased its exposure to high growth urban
centres such as Vancouver, Calgary, and Edmonton. The
acquired portfolio also contains development / intensification
opportunities for the REIT to pursue with Sobeys on a 50/50 JV
basis.
Development Pipeline: With 10 redevelopment projects in
progress and an additional 14 major developments available
(with a total estimated cost of $1-2 billion) Crombie is well
positioned to grow through adding density to its existing
properties by expanding its retail and multi-family GLA.
Attractive Valuation: We continue to view Crombie as an
attractive investment opportunity in the current slow growth, low
interest rate environment as its long-term leases provide for
stable / contractual income with upside potential through
development in W. Canada. CRR is trading at 13.6x 2016 AFFO
vs. its large-cap peers at 15.5x and we believe our Target of
14.7x is reasonable in the context of the comps.

CRR-U / CRR.un
13A
14A
15E
16E
17E
FFO
$1.10
$1.10
$1.12
$1.14
$1.19
AFFO
$0.90
$0.91
$0.93
$0.97
$1.01
% change (FFO)
0.3%
1.5%
2.6%
3.6%

Current Multiples
P / FFO
P / AFFO
11.5x
11.4x
11.3x
11.0x
10.6x
13.9x
13.8x
13.5x
13.0x
12.5x
Target Multiples
Target / FFO
13.5x
13.4x
13.2x
12.9x
12.4x
Target / AFFO
16.3x
16.2x
15.9x
15.3x
14.7x
$0.89
$0.89
$0.89
$0.89
$0.89
Distribution
AFFO Payout
99%
98%
96%
92%
88%
Tax Deferral
90%
64%
64%
64%
64%
Units Outstanding (mln)

131.3
Market Capitalization (mln)
$1,647
Net debt (including convertible debt, mln)
$2,181
Enterprise Value (mln)
$3,828
Debt / GBV (current - IFRS FV)
50%
Debt / GBV (including conv., current - IFRS FV)
53%
Net Asset Value (NAV) / Cap rate
$14.80 / 6.25%
Debt / Market Value of Assets (using NAV, excl' converts)
49%
Debt / Market Value of Assets (using NAV, incl' converts)
52%
Premium to NAV (Current)

-15.2%
Current Distribution (annualized)
$0.89
Current Distribution yield (annualized)
7.1%
Major Unitholders(mln)(as per ThomsonOne & SEDI)
Empire Company Limited
54.6
41.6%
RBC Global Asset Management
4.6
3.5%
Units
%
IA Clarington Investments
2.9
2.2%
Black Rock Asset Management
2.6
2.0%

So urces: NB F, Thomson One, OSC Bulletin
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Matt Kornack - (416) 507-8104
[email protected]
Associate: Dawoon Chung - (416) 507-8102
[email protected]
Associate: Ammar Shah - (416) 869-7476
[email protected]
Stock Performance
Unit Price ($)
Company Profile:
Crombie REIT was formed in March 2006 when Empire
Company Limited transferred 44 of its commercial properties
into the REIT. Crombie’s portfolio consists primarily of
defensive grocery-anchored retail plus a small office and
mixed-use component. In total the REIT currently has 256
properties (17.4 million sq. ft.), located in ten provinces.
Sobeys is the REIT’s largest tenant.
$14.00
3.0
$13.67
2.5
$13.33
2.0
$13.00
1.5
$12.67
1.0
$12.33
0.5
$12.00
Jan-14
Source: Bloomberg
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
0.0
Jan-16
Trading Volume (Millions)
Est. Total Return
NBF Dividend All-Star
Page 12
Title: Pembina Pipeline Corp. - PPL / PBA (T/N) $38.03 / US$34.32
Price: $38.03 /
StockRating: Outperform
TargetPrice: Cdn$45.00
Headline: NBF Dividend All-Star
Department Theme Piece
Pipelines, Utilities & Energy Infrastructure
Enbridge Inc.
$44.98 / US$31.55
ENB (T / N)
Outperform
Stock Rating:
Cdn$59.00
Target:
35.9%

Low-teens dividend growth through 2019e
On the dividend front, we forecast 14% annual dividend growth
through 2019e – underpinned by ~$17 bln of commercially
secured projects entering service through 2019e. Post 2019e,
we call for 3% annual dividend growth supported by ‘tilted
return’ profiles embedded within certain projects.

Valuation and rating
Our $59.00 target is based on a risk-adjusted dividend yield of
4.0% applied to our 2017e dividend of $2.42/sh, a 16.25x
multiple of our 2017e Free-EBITDA of $6.4 bln, and our DCF
valuation of $57.50/sh. We currently rate ENB an Outperform.
10.2x
$2.12
3.1%
4.6%
$2.42
5.4%
Adj. Payout Ratio
55%
52%
55%
D/EBITDA
7.7x
7.5x
7.1x
Financial Data:
Shares Outstanding (mln)
866.7
Market Capitalization (mln)
38,983
Net Debt (mln)
Enterprise Value (mln)
Total Debt/Enterprise Value
Total Return
55,555
$94,538
59%
35.9%
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
Enbridge Inc. holds energy infrastructure assets within the
following business segments: Liquids (55%), Gas
Distribution (25%), Sponsored Investments (15%), and Gas
Pipelines (5%). The Enbridge System, the Company's
Mainline System which represents 60% of the Liquids
segment, has a capacity of ~2.5 mmbpd, transporting
various grades of crude oil and diluted bitum en from
Western Canada to the Chicago area and Eastern Canada.
The Company also owns a 50% interest in the Alliance
Pipeline, transporting approximately 1.6 bcf/d of natural gas
from Western Canada to the Chicago area.
Patrick Kenny, CFA – 403-290-5451
[email protected]
Associate:
Michael Nguyen – 416-869-7566
[email protected]
Stock Performance
Vol. (mln)
Enbridge Inc.
$72
12.0
$60
10.0
$48
8.0
$36
6.0
$24
4.0
$12
2.0
$0
0.0
Source: Bloomberg
Jan-16
$1.86
Dividend Yield
Jan-15
11.2x
20.4x
$4.40
Jan-14
17.4x
21.5x
$4.12
14.7x
$2.20
Jan-13
Dividend per Share
28.8x
$3.43
15.5x
$2.13
Jan-12
P/AFFO
18.7x
$2.07
Jan-11
$850
$6,420
Jan-10
$850
$5,805
Jan-09
$725
$5,090
AFFO/sh (Basic)
Counterparty risk
~2/3 of ENB’s cash flows are supported by contracts with
Supermajors / Integrates – i.e., well positioned to weather the
commodity price downturn and perhaps benefit from cheap
Canadian refinery feedstock flowing down ENB’s pipelines.
Combined with the rate regulated gas distribution business and
long-term PPAs, less than 20% of ENB’s business is exposed to
material counterparty risk (namely Bakken oil producers, Texas
gas producers).
2017e
$7,270
Jan-08
2016e
$6,655
Jan-07
2015e
$5,815
Free-EBITDA (mln)
P/E

ENB US / ENB
Maint. Capex (mln)
EPS (Basic)
Highlighting cash flow quality
~75% of ENB’s cash flows are generated by cost-of-service /
take-or-pay agreements, with ~20% from fee-based contracts,
and just 5% from margin-based or commodity-based
operations. Of note, we classify the 2.85 mmbpd Mainline
(~20% of EBITDA) as half cost-of-service, half fee-based given
the provision with the CTS (Competitive Toll Settlement) to
revert back to cost-of-service should volumes decline to 1.35
mmbpd (currently ~2.4 mmbpd). Overall, we calculate a
weighted average contract duration of ~15-yrs on ENB’s
assets.
Jan-06
Bloomberg/Reuters: U.S.
EV/Free-EBITDA

ENB CT / ENB.TO
Jan-05
$54.42 - $33.42
Bloomberg/Reuters: Canada
Jan-04
52-week High-Low (U.S.)
HIGHLIGHTS
Jan-03
$66.14 - $44.56
Jan-02
52-week High-Low (Canada)
Jan-01
Stock Data:
Jan-00
Est. Total Return
EBITDA (mln)
14% annual dividend growth through 2019e
Above Average
Risk Rating:
(Year-End Dec.31)
NBF Dividend All-Star
Page 13
Title: Pembina Pipeline Corp. - PPL / PBA (T/N) $38.03 / US$34.32
Price: $38.03 /
StockRating: Outperform
TargetPrice: Cdn$45.00
Headline: NBF Dividend All-Star
Department Theme Piece
Pipelines, Utilities & Energy Infrastructure
Enbridge Income Fund
$26.78
ENF (T)
Outperform
Stock Rating:
Cdn$35.00
Target:
37.6%
AFFO/sh (FD)
8.4x
14.2x
13.6x
$2.64
$2.59
$2.69
P/AFFO
15.3x
10.5x
10.0x
Dividend per Share
$1.59
$1.85
$2.04
Dividend Yield
3.9%
6.8%
7.6%
Adj. Payout Ratio
D/Free-EBITDA
77%
12.6x
71%
6.2x
75%
5.8x

Counterparty risk
~70% of ENF’s cash flows are underpinned by Supermajors /
Integrateds or downstream refiners – i.e., well positioned to
weather the downturn in commodity prices and remain heavily
reliant on the Enbridge Mainline for base load transportation
requirements. The ~20% of cash flows generated by the
“regular E&P sector” and/or other midstream companies is
further mitigated by letters of credit / security received.
Meanwhile, the Power PPAs are all backed by high creditworthy
utility counterparties.

Long-term dividend growth of 10%
On the dividend front, we forecast 10% annual dividend growth
through 2019e.

Valuation and rating
Our $35.00 target is based on a risk-adjusted dividend yield of
5.75% applied to our 2017e dividend of $2.04/sh, a 15.5x
multiple of our 2017e Free-EBITDA of $2.7 bln, and our DCF
valuation of $35.25/sh. We currently rate ENF an Outperform.
Financial Data:
Shares Outstanding (mln)
785.8
Market Capitalization (mln)
21,044
Net Debt (mln)
Enterprise Value (mln)
Net Debt/Enterprise Value
Total Return
16,042
$37,086
43%
37.6%
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
Created in 2003, Enbridge Incom e Fund's asset base
includes: Canadian portion of the Mainline, Regional Oil
Sands System in Alberta, Southern Lights Canada and
Class A units in Southern Lights U.S., the Saskatchewan
and Bakken System, Line 7-11, Hardisty storage, the
Alliance Pipeline, and Canadian Renewable assets. .
Patrick Kenny, CFA – 403-290-5451
[email protected]
Associate:
Michael Nguyen – 416-869-7566
[email protected]
Stock Performance
Vol. (mln)
Enbridge Income Fund
$50
1.0
$40
0.8
$30
0.6
$20
0.4
$10
0.2
$0
0.0
Source: Bloomberg
Jun-15
EV/Free-EBITDA
Jun-14
$2,722
Jun-13
$150
$2,430
Jun-12
$150
$1,115
Jun-11
$72
Free-EBITDA (mln)
Jun-10
Maint. Capex (mln)
Jun-09
2017e
$2,872
Highlighting cash flow quality
ENF’s cash flows are ~60% cost-of-service / take-or-pay and
40% fee-based. Of note, we classify the fixed-fee Mainline
(~55% of EBITDA) as half cost-of-service, half fee-based –
given a provision within the CTS (Competitive Toll Settlement)
under which Enbridge can revert back to the cost-of-service
model should volumes decline to 1.35 mmbpd (from current
levels of ~2.4 mmbpd). Although the CTS expires in mid-2021,
the pipeline remains ~20% oversubscribed (i.e., clearly
baseload export capacity for the WCSB’s ~3.9 mmbpd of
production). Overall, we calculate a weighted average contract
duration of ~16 years on ENF’s assets.
Jun-08
2016e
$2,580

Jun-07
2015e
$1,186
HIGHLIGHTS
Jun-06
$44.93 - $27.49
ENF.TO
Jun-05
52-week High-Low (Canada)
Bloomberg/Reuters: Canada
Jun-04
Stock Data:
Jun-03
Est. Total Return
EBITDA (mln)
10% annual dividend growth through 2019e
Above Average
Risk Rating:
(Year-End December 31)
NBF Dividend All-Star
Page 14
Title: Exchange Income Corporation - EIF (T) Cdn$27.72
Price: Cdn$27.72
StockRating: Outperform
TargetPrice: Cdn$32.00
Headline: NBF Dividend All-Star
Department Theme Piece
Airlines
Exchange Income Corporation
Cdn$23.22
EIF (T)
Outperform
Stock Rating:
Cdn$31.00
Target:
NBF Dividend All-Star
Diversified Model Paying Dividends
Above Average
Risk Rating:
Est. Total Return
41.8%
HIGHLIGHTS
Stock Data:
Cash Yield
8.3%
Implied Price Return
33.5%
52-week High-Low
Bloomberg/Reuters:
$28.73 - $20.01
EIF CN / EIF.TO
Forecasts:
Dec. 31 YE
2014a
2015a
2016e
Revenue
$542.5
$784.5
$859.4
EBITDA
$94.3
$178.6
$186.4
EPS (basic)
$0.66
$1.48
$1.26
DCPS (basic)
$1.59
$2.90
$2.80
Dividend
$1.69
$1.80
$1.92
Payout Ratio (basic)
106%
62%
69%
DC Yield
6.8%
12.5%
12.0%
EV/EBITDA
12.0x
6.4x
6.1x
P/DCPS
14.6x
8.0x
8.3x
P/E
35.2x
15.7x
18.4x



Financial Data:
Shares Outstanding (mln)
Market Capitalization (mln)
Net Debt (mln)
Enterprise Value (mln)
23.1
$536.4
$495.8
$1,032.2
Net Debt to Capitalization
48%
Net Debt (incl converts) to 2016e EBITDA
2.7x
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
Exchange Income Corporation is a diversified,
acquisition-oriented company currently focused on specialty
aviation, specialty manufacturing and specialty
communication towers.
Trevor Johnson, CFA, MBA - 416-869-8511
[email protected]
Associates:
Endri Leno - (416) 869-8047
[email protected]
Kyle Stanley - (416) 507-8108
[email protected]
Alex Bauer - (416) 869-7535
[email protected]

Positive track record of acquisition growth
Exchange
Income
Corporation
is
a
diversified,
acquisition-oriented company focused on specialty aviation
and specialty manufacturing. Exchange uses disciplined
acquisition criteria and targets cash flow rich businesses that
can generate an immediate return for shareholders.
Aviation set to continue robust momentum
The outlook for EIF’s aviation portfolio remains promising, this
segment performing the best we have seen and further poised
to take advantage of lower fuel prices, significant prior
fleet/infrastructure investments and incremental contributions
from Provincial Aerospace (PAL). The manufacturing portfolio
is collectively underperforming, but its relatively small
contribution (<10% of run-rate EBITDA), incremental gains
from the LTM acquisition of Ben Machine Products and
favorable FX helps to mitigate western Canadian headwinds.
Complementary acquisitions expected to persist
The company has achieved a robust acquisition pace in 2015,
purchasing PAL in Q1/15 and Ben Machine in Q3/15 for a
combined total of ~$294 mln. Given the deep pipeline of
opportunities, we expect EIF to continue growing accretively
by way of acquisition, currently equipped with ~$300 mln in
dry powder and leverage a manageable 2.7x net debt / 2016e
EBITDA.
Attractive yield opportunity
EIF’s 8.3% cash yield is attractive relative to its 69% 2016e
payout, one of the best combinations in the TSX diversified
yield universe. We rate EIF shares Outperform with a price
target of $31, implying~7x and ~8x 2016e EV/EBITDA and
P/DCPS, respectively.
Stock Performance (Source: Reuters)
Page 15
Title: Artis REIT - AX.UN (T) Cdn $xx
Price: Cdn $xx
TargetPrice: Cdn $18.00
Headline: A Good Choice for Extra Yield
Department Theme Piece
Real Estate
First Capital Realty
Cdn$18.24
FCR (T)
Outperform
Stock Rating:
Cdn$20.50
Target:
Below Average
Risk Rating:
Defensive Name with Urban Redevelopment
Upside
17.1%
Stock Data:
52-w eek Low
$17.09
52-w eek High
$20.25
Bloomberg/ThomsonOne
HIGHLIGHTS
Best-in-class Portfolio of Non-discretionary Retailer Focused
Shopping Centres: FCR owns a portfolio of retail properties in
primarily urban markets with a defensive tenant base that is less
sensitive to economic cycles. The company purchases properties in
locations with strong demographic and leasing fundamentals and
high barriers to entry. Furthermore, First Capital’s portfolio is
geographically diverse, allowing it to spread its exposure to the
various economic drivers in each of Canada’s metropolitan areas,
and it has a strong covenant tenant base.
Solid Balance Sheet and Advantageous Investment Grade
Pricing: First Capital’s balance sheet affords equity investors
significant protection in the form of low relative leverage levels and
a higher percentage of unsecured financing. An impressive 68.2%
of First Capital’s over $7.9 billion in total assets are unencumbered,
which allows the company greater flexibility. As the highest rated
Canadian publicly-traded real estate entity (BBB(h) from DBRS and
Baa2 from Moody’s) FCR has access to some of the most
competitively priced unsecured debt. Management is intent on
improving this rating through earnings growth and increasing the
pool of unencumbered assets while terming out the company’s debt
maturity profile.
Building an Irreplaceable Real Estate Portfolio in Prime
Downtown: First Capital is in the process of building out a pipeline
of development and intensification projects on its existing property
sites and land bought specifically for development. These
properties offer some of the finest retail locations in Canada and
command higher rents and quality tenants. FCR has made material
progress on its major development projects such as Yorkville
Village (93% leased) and Mount Royal Village which saw enough
pre-leasing activity to justify construction commencement. In
addition, First Capital is actively seeking various strategic
opportunities through incremental site density – we anticipate
potential JV projects or sales of land / air rights.

FCR
(Year-End Dec. 31)
13A
14A
15E
16E
17E
FFO
$1.03
$1.04
$1.04
$1.09
$1.13
AFFO
$0.91
$0.94
$0.96
$1.00
$1.04
% change (FFO)
0.5%
0.7%
4.4%
4.1%
Current M ultiples
P / FFO
17.7x
17.6x
17.5x
16.7x
16.1x
P / AFFO
20.1x
19.4x
19.0x
18.3x
17.5x
Target Multiples
Target / FFO
19.9x
19.8x
19.6x
18.8x
18.1x
Target / AFFO
22.6x
21.8x
21.4x
20.5x
19.7x
$0.84
$0.85
$0.86
$0.86
$0.86
Dividend
AFFO Payout
92%
90%
90%
86%

83%
Financial Data:
Basic Shares Outstanding (mln - diluted for ITM options)
228.1
Market Capitalization (mln)
$4,160
Net debt (mln)
$3,758
Enterprise value (mln)
$7,919
Debt / Total Assets (current - excl. converts)
42%
Debt / Total Assets (current - incl. converts)
46%
Net Asset Value (NAV) / Cap Rate
$19.10 / 5.70%
Debt / Market Value of Assets (using NAV - excl. converts)
41%
Debt / Market Value of Assets (using NAV - incl. converts)
45%
Premium to NAV
-4.5%
Current Dividend (annualized)
$0.86
Current Dividend yield (annualized)
M ajo r Shareholders (mln) (as per ThomsonOne & SEDI)
Shares
4.7%
%
41.7%
Gazit-Globe Ltd.
95.1
Alony-Hetz Properties & Investments Ltd.
14.0
6.1%
RBC Global Asset Management
8.1
3.6%

Source: NBF, Thomson One & Bloomberg
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Associate: Dawoon Chung - (416) 507-8102
[email protected]
Associate: Ammar Shah - (416) 869-7476
[email protected]
Stock Performance
Unit Price ($)
Company Profile:
First Capital Realty (FCR) owns and manages a portfolio of
well-located, supermarket and drugstore-anchored
neighbourhood and community shopping centres. FCR’s
portfolio is primarily located in Canada’s largest urban areas
including the GTA, Calgary and Montreal along with a
growing presence in Vancouver. The majority of the
company’s revenues are derived from leases with tenants
offering basic necessities including supermarkets,
drugstores, banks, liquor stores and fast food outlets.
Matt Kornack - (416) 507-8104
[email protected]
$20.50
9.0
$20.00
8.0
$19.50
7.0
$19.00
6.0
$18.50
5.0
$18.00
4.0
$17.50
3.0
$17.00
2.0
$16.50
1.0
$16.00
Jan-14
Source: Bloomberg
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
0.0
Jan-16
Trading Volume (Millions)
Est. Total Return
NBF Dividend All-Star
Page 16
Title: First National Financial Corp. - FN (T) Cdn$22.32
Price: Cdn$22.32
StockRating: Sector Perform
TargetPrice: Cdn$24.00
Headline: Yield Adequately Compensates for Housing Market Risks
Department Theme Piece
Diversified Financials
First National Financial Corp.
Cdn$19.91
FN (T)
Sector Perform
Stock Rating:
Cdn$21.00
Target:
Average
Risk Rating:
Est. Total Return
52-w eek Low -High
$16.00 - $23.00
Shares Outstanding (millions)
Market Capitalization (millions)
Core EPS
Y/Y Growth
Yield Adequately Compensates for Housing
Market Risks
13.3%
Stock Data:
Year-End 12/31
NBF Dividend All-Star
60.0
HIGHLIGHTS

One of Canada’s largest non-bank mortgage companies
First National Financial Corporation ranks as one of Canada’s
largest originators, underwriters and servicers of residential
mortgages. The company originated over $17 billion of
mortgages in the 12 months to September 2015, and currently
services a portfolio of $93 billion in mortgages.

Impact of slowing housing activity could be dampened
FN has seen rapid growth over the years, with mortgages
under administration growing at an average annual rate of 17%
from 2006 to Q3 2015. The rapid growth of the portfolio in
recent years has resulted in strong earnings growth. Earnings
proved resilient even through the most recent financial crisis,
buoyed by the strong demand for low-risk, government-insured
MBS backed by prime residential mortgages.

Housing concerns do not put dividend at risk
Despite mounting concerns about burgeoning household
credit levels in Canada and the possibility of a sharp correction
in home prices, we believe FN has an adequate cushion to
maintain its dividend. For one, the company earns a steady
stream of fee income from mortgages under administration. In
addition, FN has little need to retain earnings.
$1,194
2014A
2015E 2016E 2017E
$2.04
$2.34
$2.52
$2.86
(9.1%) 14.7%
7.9%
13.5%
Price / Earnings
9.8x
8.5x
7.9x
7.0x
Revenue
$368
$412
$485
$523
Expenses
$228
$265
$271
$281
Net Income
$100
$104
$153
$173
Less: Non-Core Income
$25
$39
$0
$0
Core Net Income
$125
$142
$153
$173
Book Value Per Share
$5.90
$6.00
$7.00
$8.22
Financial Data: (Quarter-End 9/30/2015)
Book Value per Share
$5.73
Price/Book Value
3.47x
Distribution/Dividend Information:
Dividend/Share (Quarterly)
Payout Ratio
Yield
$0.388
81.2%
7.8%
Yield adequately compensates for housing market risks
We use a target P/E multiple on blended 2016/2016 EPS of
7.5x to reflect housing market concerns that have weighed on
valuation for all mortgage-related stocks. However, we believe
the 7.8% yield adequately compensates for housing market
risks.
Stock Performance

Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
First National Financial Corporation is an originator,
underwriter and servicer of mainly prime single-family and
multi-unit residential mortgages, as well as commercial
mortgages. First National is Canada’s largest non-bank
originator and underwriter of mortgages with over $90 billion
in mortgages under administration.
Shubha Khan - (416) 869- 6425
[email protected]
Associate:
Jaeme Gloyn, CFA - (416) 869-8042
[email protected]
Q4 AheTitle: High Arctic Energy Services Inc. - HWO (T) $2.18
Price: $2.18
StockRating: Outperform
Page 17
TargetPrice: Cdn$3.00
Headline: PNG Operations Continue to Grow; HWO Remains the Best
Department Theme Piece
Oil and Gas Services
High Arctic Energy Services Inc.
$3.08
HWO (T)
Outperform
Stock Rating:
Cdn$5.50
Target:
85%
n/a
n/a
2015E
2016E
6.3x
2.3x
4.5x
7.3x
1.9x
4.0x
All amounts in Cdn$ unless otherwise noted.
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
High Arctic Energy Services Inc. (“HWO” or “High Arctic”) is
Canada’s largest provider of snubbing services in addition to
being one of the most active providers of drilling and
workover services in Papua New Guinea (“PNG”). The
business model employed by HWO in PNG has led to
returns on capital that are among the highest in our energy
services universe. Since taking over during the heart of the
financial crisis in 2009, current management has shown to
be prudent operators, resulting in impressive cash flow
generation over this period.
Greg Colman - (416) 869-6775
[email protected]
Andrew Jacklin, CFA – (416) 869-7571
[email protected]
Michael Storry-Robertson – (416) 507-8007
[email protected]
Westley MacDonald-Nixon - (416) 507-9568
[email protected]
Pristine balance sheet supports OP rating & $5.50 target
With an estimated net cash position of ~$28 mln at the exit of
2015, HWO is an ideal position to weather the current
commodity market conditions. At 1.7x 2016e EV/EBITDA,
HWO’s valuation is the lowest of the mid cap drilling peers,
below High Arctic’s post-2009 average of 3.0x and a 66%
discount to the peer average of 5.0x. Our $5.50 target is
driven by 4.0x 2016e EV/EBITDA. Outperform.
Stock Performance

$4.60
1.4
$4.40
1.2
$4.20
1.0
$4.00
0.8
$3.80
0.6
$3.60
0.4
$3.40
$3.20
0.2
$3.00
0.0
Source: Thomson ONE, NBF
Volume (mm)
2016E
n/a
n/a
Dec-15
5.7x
2.7x
5.5x
2015E
Nov-15
2014
Attractive dividend with sustainable 18% payout ratio
The annual dividend of $0.20/sh (yielding ~6% based on the
current price) results in a relatively low 18% payout ratio (after
maintenance capital expenditures). We thereby believe HWO
can continue to increase dividends and model $0.28/sh in
2016 (for an implied yield of ~9% based on the current price
and a manageable payout ratio of 32%).
Oct-15
Valuation
223.2
63.3
1.00
0.28
0.42
Sep-15
-0.8x
n/a

2016E
$
$
$
$
$
Aug-15
2014
Debt/EBITDA
Interest Coverage
218.0
60.3
0.84
0.20
0.49
Jul-15
Balance Sheet
2015E
$
$
$
$
$
Revenue and EBITDA expected to increase in 2016 y/y
High Arctic is the only company in our energy services space
that we forecast to increase both revenue and EBITDA
sequentially in 2015 and 2016. Our 2016 estimate calls for
EBITDA of $63.3 mln in in 2016 (up from $60.3 mln in 2015
and $49.3 mln in 2014) vs. consensus of $69.3 mln.
Jun-15
171.8
49.3
0.82
0.18
0.54

May-15
2014
$
$
$
$
$
We like HWO’s defensive positioning through the
downturn…
High Arctic benefits from a largely contracted revenue stream
from operations in Papua New Guinea, where HWO derives
approximately 90% of annual revenue. We believe HWO can
continue to offer investors shelter from the downtrodden
commodity price market as we expect rig utilization levels in
PNG to remain flat in 2016 relative to 2015 and 2014.
Jan-15
Estim ates
$4.34 - $3.02
355,220
$3.50

Price
52-w eek High-Low
Average Weekly Volume
Net Tangible Book Value per Share
HIGHLIGHTS
Apr-15
54.9
$169.1
-$12.5
$156.6
6.4%
Mar-15
Shares Outstanding (mm)
Market Capitalization (mm)
Net Debt (mm) 1
Enterprise Value (mm)
Dividend Yield
Feb-15
Est. Total Return
P/E (x)
EV/EBITDA (x)
Target EV/EBITDA
Defensive Driller with Durable Dividend
Above Average
Risk Rating:
Revenue (mm)
EBITDA (mm)
CFPS
DPS
EPS
NBF Dividend All-Star
Page 18
Title: Innergex Renewable Energy Inc. - INE (T) Cdn$9.53
Price: Cdn$9.53
StockRating: Outperform
TargetPrice: Cdn$11.25
Headline: Recent dip creates attractive entry point
Department Theme Piece
Independent Power Producers & Energy Traders
Innergex Renewable Energy Inc.
Cdn$10.64
INE (T)
Outperform
Stock Rating:
Cdn$14.00
Target:
Above Average
Risk Rating:
Est. Total Return
NBF Dividend All-Star
Hydro assets with steady growth should
provide certainty in uncertain times
37%
Stock Data:
22-Jan-16
52-w eek High-Low (Canada)
$12.36 - $9.51
Bloomberg/Reuters: Canada
INE CN / INE-T
(Year-End De c 31)
2014a
2015e
2016e
Revenue (mln)
$ 241.8
$ 248.7
$ 301.6
adj. EBITDA (mln)
$ 171.2
$ 180.6
$ 216.9
adj. EPS (diluted)
$
0.16
$
0.15
$
0.46
CAFD/sh
$
0.69
$
0.70
$
0.90
Dividends/sh
$
0.60
$
0.62
$
0.62
Dividend Yield
5.7%
5.9%
5.9%
Payout Ratio
88%
88%
69%
P/ CAFD
15.3x
14.9x
11.7x
adj. EV/EBITDA
13.0x
13.4x
12.4x
HIGHLIGHTS


Financial Data:
Market Capitalization (mln)
$ 1,083
Total Debt1 (mln)
$ 2,239
Net Debt/Capital
0.80x
Sh/O Basic 1 (mln)
FD Outstanding1 (mln)
103.0

103.2
Source: Thomson Financial and NBF estimates
1
September 30, 2015

Industry Rating: Underweight
(NBF Economics & Strategy Group)
Company Profile:
Innergex is one of Canada’s largest Independent Power
Producers with a pure-play focus on renewable power. The
company operates 1215 MW (net 708 MW) of renewable
projects (34) mostly under long term power purchase
agreements (PPA) with an average remaining life of close to
20 years. It has wind, hydro and solar assets and operates
in Quebec, Ontario, B.C. and Idaho. Innergex also has 297
MW (net 186 MW) of new projects with PPAs with
construction planned over the next two years and has a
pipeline of more than 3 GW of future opportunities.
Stable business model with relatively low risk
INE consists mainly of hydro assets which typically have the
longest asset life among renewables. It also has the longest
weighted average life remaining on its PPA contracts
compared to its peers, at >18 years. As a developer of
projects, INE can achieve attractive IRRs (typically in the
9-19% range) and use operational expertise to reduce capital
costs. Combined with hedged FX and fixed interest rate costs
on non-recourse debt, INE reduces its risk profile dramatically.
Growth continues to materialize
With ~300 MW of gross installed capacity under construction
and a strong development pipeline, INE has a runway of
projects that will contribute to growth. In addition, INE recently
signed a memorandum of understanding with the Federal
Electricity Commission of Mexico to jointly develop hydro
projects and expand its international presence. INE tends to
acquire and aggregate smaller scale projects (10-30 MW
range) which they can typically purchase at lower prices.
Sustainable dividend and NCIB
INE currently has a ~6% dividend yield and with a payout ratio
target of 80%, they remain prudent with cash. As projects
come on line, investors should see dividend increases over
the coming 12 months. They also have an NCIB in place and
are approved to buyback up to 2 million common shares.
Valuation and Rating
Our target assumes an 8.5% equity discount rate and is equal
to 11.9x EV/EBITDA on 2017E. INE’s projects under
construction should largely be completed by the end of
2016E, supporting an increase in adj. EBITDA by >60% for
2017E and payout ratios below INE’s 80% target. We have
currently assigned INE an Outperform rating.
Stock Performance
Rupert M. Merer, P.Eng CFA - (416) 869-8008
[email protected]
Ryan Wong, P.Eng MBA - (416) 869-6763
ryan.wong @nbc.ca
Steven Hong - (416) 869-7538
[email protected]
Source: Reuters
Page 19
Title: Inter Pipeline Ltd. - IPL (T) Cdn$26.37
Price: Cdn$26.37
StockRating: Outperform
TargetPrice: Cdn$31.00
Headline: NBF Dividend All-Star
Department Theme Piece
Pipelines, Utilities & Energy Infrastructure
Inter Pipeline Ltd.
Cdn$20.61
IPL (T)
Outperform
Stock Rating:
Cdn$28.00
Target:
43.4%
EV/Free-EBITDA
19.3x
15.0x
14.6x
AFFO/sh (FD)
$1.99
$2.09
$2.16
P/AFFO
18.0x
9.8x
9.6x
Dividend per Share
$1.48
$1.56
$1.65
Dividend Yield
4.1%
7.6%
8.0%
Adj. Payout Ratio
74%
74%
77%
D/EBITDA
5.4x
5.1x
4.8x

Counterparty risk
76% of IPL’s cash flows are supported by Supermajors /
Integrates – mainly within the oil sands segment but also ~60%
on the Bow River conventional pipeline system. Elsewhere,
NOVA and DOW Chemical represent strong counterparties
within the NGL Extraction segment, contributing another 5% to
IPL’s consolidated cash flows. As such, we estimate 19% of
IPL’s cash flows are exposed to material counterparty risk.

6% annual dividend growth through 2018e
On the dividend front, we forecast two more dividend increases
of 6% per year for 2017 and 2018 – i.e., until the company’s
payout ratio reaches 80%.

Valuation and rating
Our $28.00 target is based on a risk-adjusted dividend yield of
6.0% applied to our 2017e dividend of $1.65/sh, a 15.0x
multiple of our 2017e Free-EBITDA of $940 mln, and our
discounted cash flow valuation of $27.00/sh. We currently rate
IPL an Outperform.
Financial Data:
Shares Outstanding (mln)
336.5
Market Capitalization (mln)
$8,388
Net Debt (mln)
Enterprise Value (mln)
Net Debt/Enterprise Value
Total Return
$5,317
$13,705
39%
43.4%
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Patrick Kenny, CFA – 403-290-5451
[email protected]
Associate:
Michael Nguyen – 416-869-7566
[email protected]
Stock Performance
Vol. (mln)
Inter Pipeline Ltd.
$40
2.5
$32
2.0
$24
1.5
$16
1.0
$8
0.5
$0
0.0
Jan-00
Company Profile:
Inter Pipeline Limited has four lines of business. The
pipeline business has both conventional and oil sands
assets. In July 2004; Inter Pipeline acquired three natural
gas processing plants from Williams Canada Inc. for $715
million that now make up its NGL extraction business, and in
October 2005, Inter Pipeline completed its acquisition of
Simon Storage Limited, a petroleum and petrochemical
storage business in the United Kingdom for £120 million
British Pounds or $250 million.
.
Source: Bloomberg
Jan-16
$940
Jan-15
$915
Jan-14
$863
Jan-13
$50
Free-EBITDA (mln)
Jan-12
$60
Jan-11
$55
Jan-10
$990
Maint. Capex (mln)
Jan-09
2017e
$975
Jan-08
2016e
$918
Highlighting cash flow quality
IPL’s cash flows are 63% underpinned by cost-of-service /
take-or-pay contracts that bear no commodity or volume risk.
Meanwhile, 33% of cash flows are fee-based (volume risk),
while just 4% is exposed to commodity and volume risk (NGL
frac). That said, the majority of IPL’s cost-of-service /
take-or-pay cash flows are long-term contracts (~20-yrs) on its
oil sands pipeline system, which services long-life projects with
sunk capital. Furthermore, despite the potential for volume
decline across IPL’s fee-based business we note IPL’s ability to
bump up tolls to partially mitigate the impact to margins.
Overall, we calculate a weighted average contract duration of
~13 years on IPL’s assets.
Jan-07
2015e

Jan-06
IPL CT / IPL.TO
Jan-05
Bloomberg/Reuters: Canada
HIGHLIGHTS
Jan-04
$36.12 - $21.23
Jan-03
52-week High-Low (Canada)
Jan-02
Stock Data:
Jan-01
Est. Total Return
EBITDA (mln)
6% annual dividend growth through 2018e
Above Average
Risk Rating:
(Year-End December 31)
NBF Dividend All-Star
Page 20
Title: Thomson Reuters Corporation - TRI/TRI (T;N) $28.06;US$28.20
Price:
StockRating: Sector Perform
TargetPrice: Cdn$30.00
Headline: Q3 Revs/EBITDA Miss, EPS Helped By Tax Resolutions, Q4 Net Sales
Department Theme Piece
Telecom Services
Manitoba Telecom Services Inc.
$29.70
MBT (T)
Outperform
Stock Rating:
Cdn$32.00
Target:
Average
Risk Rating:
Est. Total Return
HIGHLIGHTS
52-w eek High-Low (Canada)
$30.60 - $23.13
52-w eek High-Low (U.S.)
NA
Bloomberg/Reuters: Canada
MBT / MBT-T
Bloomberg/Reuters: U.S.
Revenue (mln)
Following Allstream Sale Attention Turns To
Use Of Proceeds & MTS’ Transformation Plan
12.1%
Stock Data:
(FYE De c. 31)
NBF Dividend All-Star
NA
2014a
2015e*
2016e
$1,003
$1,600
$1,008
EBITDA (mln)
$566
$458
$467
Adjusted EPS
$1.70
$1.06
$1.26
P/E
23.6x
17.5x
27.9x
EV/EBITDA*
5.6x
5.8x
5.8x
EV/EBITDA**
6.5x
7.1x
7.3x
FCF/Share***
$1.96
$2.05
$2.12
FCF Yield
6.6%
6.9%
7.1%
*Estimates are ex-Allstream; 2015e EV/EBITDA is P F
**EV/EBITDA adjusted fo r deferred wireless costs
***Ex-spend on wireless spectrum & voluntary pensio n payments
Financial Data (as at Septem ber 30, 2015):
Shares Outstanding (mln)
78.8
Float (mln)
Market Capitalization (mln)
79.2
$2,340
Net Debt as per B/S (mln)
$874
Common Shareholders' Equity (mln)
$1,207
Net Debt to Capital
31.3%
Leverage (Net Debt to EBITDA)
BVPS / Price/Book
1.6x
$15.23/2.0x
Dividend
$1.30
Dividend Yield
4.4%
Industry Rating (Telecom Services): Underweight
(NBF Economics & Strategy Group)
Company Profile:
Manitoba Telecom Services is one of Canada's leading
national communications providers. MTS is the incumbent
communications provider for residential and business
customers across Manitoba offering wireless, voice,
broadband, TV, and home security services. On Nov. 23,
2015, MTS announced the sale of Allstream, a national
communications provider serving business customers with
voice, data & security services, which closed Jan. 15, 2016.
Allstream sale yielded net proceeds of $420 million.
After being deemed non-core and undergoing further
restructuring in 2015, Allstream was successfully sold to
U.S.-based Zayo in a deal which closed on Jan. 15. MTS will
keep obligations for retired/deferred employees of Allstream,
but also keeps most of the tax shield (NPV of $275 million).

Use of Allstream proceeds to be disclosed on Feb. 4.
Along with its 4Q15 results, MTS will disclose how it will
allocate the Allstream proceeds after reviewing its options
which include the retirement of debt incurred to fund its
pension funding pre-payment & spectrum purchases in 2015.

MTS 3-year transformation plan launched with 3 phases.
Following the reporting of its 3Q15 results which produced
lower than expected profits and subscriber metrics, the
company noted that it’s now turned its attention to MTS with a
newly-established Transformation Management Office tasked
with a 3-year plan to unlock $100 million in FCF (same level of
costs to be incurred), as it streamlines processes, improves
customer service, refreshes the brand & rejuvenates growth.

Regulatory hurdles to be overcome for future MTS sale.
It’s long been anticipated that any sale of Allstream sets a
timer on a possible sale of MTS, quite possibly at some point
during the course of its transformation program. Regulations
related to Wireless and the prior government’s desire to have
four players in each market serve as obstacles to be
overcome, but we don’t think these make a sale impossible.

MTS is rated Outperform, target $32.
Our target is based on the average of the 2016E metric in our
DCF and 2017E value in our NAV, with implied EV/EBITDA of
7.6x 2016E and 7.1x 2017E including Wireless COA. On May
7, 2015, the dividend was cut 23.5% to its current $1.30 level.
Stock Performance (Source: Thomson Reuters)

Daily MBT.TO
1/26/2015 - 2/11/2016 (TOR)
Price
CAD
29.70
29.5
29
28.5
28
27.5
27
26.5
26
25.5
Adam Shine, CFA - 514-879-2302
[email protected]
25
24.5
24
Associates:
Luc Troiani, CFA - 416-869-6585
[email protected]
Piotr (Peter) Stusio, CFA - 514-879-2564
[email protected]
23.5
23
Volume
1M
550,653.00
0
02 17 02 16
Q1 2015
01 16
01 19 01
Q2 2015
16
02 16
04 17 01 16
Q3 2015
01 16
02 16 01
Q4 2015
16
04
18 01
Q1 2016
Page 21
Title: MCAN Mortgage Corporation - MKP (T) Cdn$13.59
Price: Cdn$13.59
StockRating: Sector Perform
TargetPrice: Cdn$16.00
Headline: Healthy Returns in Mortgage Investments
Department Theme Piece
Diversified Financials
MCAN Mortgage Corporation
Cdn$11.79
MKP (T)
Sector Perform
Stock Rating:
Cdn$12.50
Target:
NBF Dividend All-Star
Healthy Returns in Mortgage Investments
Average
Risk Rating:
Est. Total Return
15.9%
Stock Data:
52-w eek Low -High
$10.40 - $14.20
Shares Outstanding (millions)
22.8
Market Capitalization ($ millions)
$269
Year-End 12/31
2014A
2015E
2016E
2017E
Core EPS
$1.22
$1.23
$1.23
$1.44
Y/Y Growth
(15.2%)
1.0%
(0.0%)
16.6%
Price / Earnings
9.7x
9.6x
9.6x
8.2x
Net Investment Income
$37.2
$43.2
$43.4
$51.2
Other Income
$2.7
$0.1
$0.0
$0.0
Operating Expenses
($13.4)
($13.9)
($15.3)
($16.6)
Pre -Tax Incom e
$26.5
$29.3
$28.1
$34.6
Income Tax Provision
($1.0)
$0.5
$0.0
$0.0
Net Incom e
$25.4
$29.8
$28.1
$34.6
Adjustments
($0.3)
($3.0)
$0.0
$0.0
Core Ne t Incom e
$25.2
$26.8
$28.1
$34.6
Book Value Per Share
$10.83
$11.18
$11.25
$11.60
Financial Data: (Quarter-End 09/30/2015)
Book Value per share
Price/Book Value
HIGHLIGHTS

One of Canada’s most attractive MICs
MKP qualifies on an ongoing basis as a Mortgage Investment
Corporation (MIC) under terms specified in the Income Tax Act
of Canada. As such, all dividends paid to shareholders are fully
tax deductible. Consequently, the company distributes
substantially all of its earnings to shareholders.

Among the best-positioned MICs in Canada
In our view, MKP is among the MICs best positioned to
generate the highest risk-adjusted returns. Unlike other MICs,
MKP can exploit its status as a deposit-taking institution to
generate leveraged returns. We regard CDIC-insured deposits
as a low-cost, stable and reliable source of funding.

Abundance of investment opportunities in Alt-A market
MKP continues to invest in uninsured Alt-A residential
mortgages, a segment in which there continues to be abundant
lending opportunities, particularly since the introduction of
stricter mortgage underwriting rules in 2012.

Securitization mortgages up 96% y/y through Q3 2015
MKP recommenced securitizing insured mortgages in 2014.
These mortgages do not affect MKP’s Income Tax
Assets-to-Capital Multiple. As such, they generate revenue for
MKP, but do not constrain lending capacity.
$11.19
1.05x
Dividend Inform ation:
Dividends/Share (NTM)
Payout Ratio (NTM)
Dividend Yield (NTM)
$1.16
100.0%
9.8%
Capital:
Tier 1 Ratio
Income Tax Assets to Capital Multiple (ACM)
25.2%
4.89x
Generating attractive risk-adjusted return
We believe the projected dividend yield of 9.8% (vs. the
average yield of 8.2% for other publicly-traded MICs and ~5%
for other mortgage market comparables) is attractive,
particularly in view of MKP's low balance sheet risk relative to
peers. We use a target P/BV multiple of 1.1x Q3 2016 BV.
Stock Performance

Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
MCAN Mortgage Corporation (MKP) qualifies on an ongoing
basis as a Mortgage Investment Corporation (MIC),
whereby all dividends paid to shareholders are fully tax
deductible. Consequently, the company distributes
substantially all of its earnings to shareholders. As a MIC,
the company is able to invest in a wide variety of real
estate-related loans, but primarily residential mortgages and
residential construction loans. These investments are
funded by term deposits eligible for CDIC insurance, as well
as shareholders’ equity.
Shubha Khan - (416) 869- 6425
[email protected]
Associate:
Jaeme Gloyn, CFA - (416) 869-8042
[email protected]
Page 22
Title: Artis REIT - AX.UN (T) Cdn $xx
Price: Cdn $xx
TargetPrice: Cdn $18.00
Headline: A Good Choice for Extra Yield
Department Theme Piece
Real Estate
Milestone Apartments REIT
Cdn$15.00
MST.UN (T)
Outperform
Stock Rating:
Cdn$19.50
Target:
Average
Risk Rating:
35.3%
Stock Data:
52-w eek Low
$12.39
52-w eek High
$16.03
Bloomberg/Reuters:
(Year-End Dec. 31)
13A(1)
14A
15E
16E
Relative Valuation & Supportive Financial Metrics: On a
currency adjusted basis Milestone now trades at in excess of a 27%
discount to NAV and a ~10x AFFO multiple. From a leverage
standpoint MST’s debt levels remain reasonable at a ~53% Debt /
Total Assets and after taking into account currency appreciation the
AFFO payout ratio is in the low 50% range – allowing for future
distribution increases.
Interest Rate & Currency Environment: Global growth concerns
have driven government bond yields (even in the US, which is
expected to be one of the few better performing outliers) to all time
lows – providing support for valuations as lower risk free return
hurdles are incorporated into cap rates. This while apartment rental
fundamentals continue to drive top-line expansion. Meanwhile the
Canadian Dollar has continued to slide relative to the US due to the
divergence in central bankers’ stance on monetary policies.
US Investors Continue to Have Confidence in Domestic
Multi-Family Issuers Driving Price Appreciation: While
Milestone had a positive year, performance wise, in 2015 as one of
the leading TSX REITs from a total return perspective, most of this
growth could be attributed to currency appreciation. Since
September 2013 US comps have seen ~76% appreciation in values
while MST was up 53% in spite of a relatively similar expected
growth in AFFO/unit.
Positive Operating Performance May Slow but Likely Still
Better than Canada: Despite the concerns surrounding
fundamentals in energy-related markets particularly in Houston,
MST’s properties from that region posted SP Rent of +5.9% in Q3
2015. We continue to expect that B&C properties will see higher
rent and occupancy growth than A class apartments as they are
less sensitive to new supply and are supported by job growth and
lower homeownership rates in the US.

17E
US$0.98 US$0.99 US$1.07 US$1.16 US$1.25
AFFO per Unit
US$0.75 US$0.80 US$0.90 US$0.98 US$1.07
Grow th (FFO per Unit)
1.4%
8.4%
8.1%
Current Multiples (Converted at Current Spot FX Rate)
P / FFO
10.4x
10.2x
9.4x
7.8%
8.7x
8.1x
11.3x
10.3x
9.5x
Target Multiples (Converted at Curre nt Spot FX Rate)
P / FFO
13.9x
13.7x
12.7x
11.7x
10.9x
13.8x
12.7x
13.5x
12.7x
P / AFFO
18.0x
17.0x
Distribution
C$0.65
C$0.65
AFFO Payout (No Conversion)
Tax Deferral
HIGHLIGHTS
MST-U / MST.un
FFO per Unit
P / AFFO
Ongoing Solid Performance + M&A Activity
to Provide Economies of Scale
15.1x

C$0.65 US$0.55 US$0.55
86%
82%
72%
56%
51%
100%
100%
100%
100%
100%
Financial Data:
Units Outstanding
75.8
Market Capitalization

C$1,104
Net Debt
C$1,717
Enterprise Value
C$2,821
Debt / Total Assets (Current - Incl. Converts)
52%
Debt / Total Assets (Current - Excl. Converts)
52%
Net Asset Value ("NAV") / Cap Rate
US$13.85 / 6.35%
Premium to NAV (Incl. FX Impact @ Spot)
-26.9%
Debt / Market Value (Using NAV, Incl. Converts)
53%
Current Distribution (Annualized PF Announced Increase)
C$0.79
Current Distribution Yield (Annualized)

5.4%
Units
Major Unitholders (mln)
MileSouth
11.8
%
15.6%
MST Investors
5.5
7.3%
1832 Asset Management
5.3
7.0%
Sources: Company Prospectus & Report s, Thomson One
1) Normalized f or a f ull year of operations
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Matt Kornack - (416) 507-8104
[email protected]
Associate: Dawoon Chung - (416) 507-8102
[email protected]
Associate: Ammar Shah - (416) 869-7476
[email protected]
Stock Performance
Price ($ / Unit)
Company Profile:
Milestone Apartments REIT is a multi-family residential
property owner focused on investing in garden-style
properties in the Southern U.S. The REIT was created on
January 17, 2013 and went public via an IPO on the TSX.
Milestone currently owns (PF transactions announced) 72
properties with 22,546 units – the REIT also manages
additional units, which provide fee income in the near term
and a longer-term acquisition pipeline.
$16.50
2,000
$15.70
1,800
$14.90
1,600
$14.10
1,400
$13.30
1,200
$12.50
1,000
$11.70
800
$10.90
600
$10.10
400
$9.30
200
$8.50
24-Jan-14
24-Apr-14
Source: Bloomberg
23-Jul-14
21-Oct-14
19-Jan-15
19-Apr-15
18-Jul-15
16-Oct-15
0
14-Jan-16
Volum e (000s)
Est. Total Return
NBF Dividend All-Star
Page 23
Title: Morneau Shepell Inc. - MS I (T) Cdn$14.65
Price: Cdn$14.65
StockRating: Outperform
TargetPrice: Cdn$19.00
Headline: Organic Growth Remains Encouraging; Profitability Challenged
Department Theme Piece
Commercial Services & Supplies
Morneau Shepell Inc.
Cdn$14.65
MSI (T)
Outperform
Stock Rating:
Cdn$19.00
Target:
Below Average
Risk Rating:
Est. Total Return
NBF Dividend All-Star
Recurring Revenue Model Ideal for Yield
Predictability
35.0%
HIGHLIGHTS
Stock Data:
Cash Yield
5.3%
Implied Price Return
29.7%
52-week High-Low
Bloomberg/Reuters:
$18.18-$13.35
MSI CN / MSI.TO
Forecasts:
FYE Dec. 31
2014a
2015e
2016e
Revenue (mln)
$535.9
$561.3
$624.9
EBITDA (mln)
$98.9
$105.1
$119.0
DCPS
$0.92
$1.06
$1.03
Dividend
$0.78
$0.78
$0.78
Payout Ratio
84%
74%
76%
DC Yield
6.3%
7.2%
7.0%
EV/EBITDA
10.1x
9.7x
8.6x
P/DCPS
15.8x
13.8x
14.2x
Financial Data:
Shares Outstanding (mln)
48.0
Market Capitalization (mln)
$704
Net Debt (mln)
Enterprise Value (mln)
Net Debt to Capitalization



$327
$1,031
32%
Net Debt to TTM EBITDA
3.2x
Net Debt to TTM EBITDA ex-converts
2.5x


Industry Rating: Underweight
(NBF Economics & Strategy Group)
Company Profile:
Morneau Shepell Inc. is the largest Canadian-owned
provider of human resource consulting and outsourcing
services. The firm delivers solutions to assist employers in
managing the financial security, health and productivity of
staff. With almost 4,000 employees in offices across North
America, Morneau Shepell offers its services to over 20,000
organizations.
Largest domestic HR consulting firm
MSI has grown to become the largest Canadian provider of
human resources consulting and pension/benefit services,
offerings that are increasingly sought after by firms given: 1)
ongoing regulations and complexities associated with
accounting/reporting standards and employee assistance
programs (i.e., Obamacare health insurance exchanges); and
2) an increased emphasis on employee well-being and morale,
given the resulting positive effects on productivity and
profitability shown to be realized.
Recurring revenue base and high cash flow stability
The average client relationship exceeds 20 years, with 96-99%
of revenue typically recurring each year. Once MSI wins a
mandate it is well positioned to maintain the business, as its
service is generally considered excellent and it takes a lot of
time and effort to transition to a new partner for most offerings
provided. As a result MSI’s margins and cash flows have shown
to be amongst the more stable and predictable within the TSX
diversified yield universe.
Solid track record of organic top-line growth
MSI has achieved positive y/y organic revenue gains the last 21
quarters, and we expect mid-single digit growth to persist
2016+. The company continues to win large new domestic
mandates, gain traction in the US, and we believe there is still
cross-selling upside from the marriage of Morneau & Shepell.
Balance sheet manageable
MSI has a net debt to TTM EBITDA ratio of 3.2x (2.5x excluding
converts) which is higher than diversified yield peers, but not
unreasonable given the relative stability of MSI’s operations.
Defensive yield with cushion
MSI’s 5.3% cash yield is well supported by the defensive,
recurring nature of its offering and a 76% 2016e payout ratio.
We rate MSI shares Outperform with a price target of $19,
implying ~10x 2016e EV/EBITDA & ~18x P/DCPS.
Stock Performance (Source: Reuters)
17.00
16.00
15.00
Trevor Johnson, CFA, MBA - (416) 869-8511
[email protected]
Associates:
Endri Leno - (416) 869-8047
[email protected]
Kyle Stanley - (416) 507-8108
[email protected]
Alex Bauer - (416) 869-7535
[email protected]
14.00
600,000
300,000
0
Feb
Mar
Q1 2015
Apr
May
Jun
Q2 2015
Jul
Aug
Sep
Q3 2015
Oct
Nov
Dec
Q4 2015
Jan
Page 24
itle: Innerg ex Renewable Energy Inc. - INE (T) Cdn$9.53
Price: Cdn$9.53
StockRating: Outperform
TargetPrice: Cdn$11.25
Headline: Recent dip creates attractive entry point
Department Theme Piece
Independent Power Producers & Energy Traders
Northland Power Inc.
Cdn$18.41
NPI (T)
Outperform
Stock Rating:
Cdn$21.00
Target:
Average
Risk Rating:
Est. Total Return
22-Jan-16
52-w eek High-Low
$19.20 - $14.45
Bloomberg/Reuters: Canada
(Year-End Dec 31)
NPI CN / NPI-T
2014a
2015e
2016e
Revenue (mln)
$
760
$
736
$
784
adj. EBITDA (mln)
$
363
$
402
$
422
maint capex (mln)
$
2
$
2
$
EV/EBITDA
19.8x
23.3x
$ 1,048
$ 2,263
$ 3,610
11.9x
11.1x
$
P/ CAFD
1.13
$
16.1x
Dividends/sh
2
16.1x
adj EV/EBITDA
CAFD/sh
$
Dividend Yield
1.08
1.08
11.0x
$
16.9x
$
1.08
5.9%
5.9%
Payout Ratio
95%
100%
Debt /EBITDA
6.9x
8.6x
1.13
16.2x
$
1.08
5.9%
96%
11.5x
Financial Data:
Market Capitalization (mln)
$ 3,099
Total Debt1 (mln)
$ 3,679
Net Debt/Capital
Sh/O Basic 1 (mln)
1
FD Outstanding (mln)
0.8x
170.1
170.1
Source: Thomson Financial and NBF estimates
1
NPI has taken the road less traveled with
offshore wind, but it’s paying dividends
20%
Stock Data:
Construction assets
NBF Dividend All-Star
September 30, 2015
Industry Rating: Underweight
(NBF Economics & Strategy Group)
Company Profile:
Northland Power holds an economic interest of 1,345 MW
in natural gas-fired and renewable power generation. The
company has an active growth pipeline, including a net
interest of 642 MW in two offshore wind farms in Europe
that are targeting commercial operations in late 2017E.
HIGHLIGHTS
Diversity and locked-in cash flow support dividend
NPI has a range of assets across geographies (Canada and
Europe) and segments (thermal, wind and solar) to diversify
risk. With more than 1,300 MW of installed capacity and 98%
of revenues tied to long term PPA contracts, we believe NPI
has predictable cash flows and a sustainable dividend. It has
a weighted average life of ~14 years remaining on its PPAs.

NPI stands out from the crowd with offshore wind
Unlike many of its peers who have aggregated smaller
conventional projects, NPI ventured into offshore wind with its
Gemini and Nordsee One projects, with combined net
capacity of 642 MW. Once considered risky, offshore wind has
significantly matured with experienced contractors and
improved business practices. NPI has signed long term PPA
contracts with credit worthy off-takers and retained high
quality partners to de-risk the projects. It also has O&M
contracts which lock-in a large portion of the operating costs.
With expected COD in the H2 2017E, NPI could double
EBITDA in 2018E and drop its payout ratio to below 50%. This
may present an opportunity for NPI to increase its dividend.

Additional growth not far away
Besides its two offshore wind farms, NPI has another 100 MW
of gross installed capacity under construction and more than
2 GW of development projects in the pipeline. There are also
expansion opportunities in the offshore wind segment with
Nordsee Two and Three.

Valuation and Rating
Our target is based on a DCF with an 8.5% discount rate and
an 8.7x adj EV/EBITDA on 2018E. We believe that as NPI’s
offshore projects are further de-risked, the stock should
benefit. We rate NPI an Outperform.
Stock Performance

Rupert M. Merer, P.Eng CFA - (416) 869-8008
[email protected]
Associates:
Ryan Wong, P.Eng MBA – (416) 869-6763
[email protected]
Steven Hong – (416) 869-7538
[email protected]
Source: Reuters
Page 25
Title: Pembina Pipeline Corp. - PPL / PBA (T/N) $38.03 / US$34.32
Price: $38.03 /
StockRating: Outperform
TargetPrice: Cdn$45.00
Headline: NBF Dividend All-Star
Department Theme Piece
Pipelines, Utilities & Energy Infrastructure
Pembina Pipeline Corp.
$29.38 / US$20.60
PPL / PBA (T/N)
Outperform
Stock Rating:
Cdn$38.00
Target:
Above Average
Risk Rating:
35.7%
Improving cash flow quality with take-or-pay commitments
By 2018e (pro forma secured growth), PPL’s cash flows will be
~50% cost-of-service / take-or-pay, with the majority of its
conventional pipeline system contracts recently converted to
long-term commitments, combined with the 100% take-or-pay
Redwater fractionation II & III expansions, as well as legacy oil
sands pipelines. Meanwhile, 33% of cash flows are fee-based
and largely comprised of Montney-based gas processing and
NGL Infrastructure services – leaving 17% of cash flows driven
by margin-based activities and just 2% from commodity-based
activities. Overall, we calculate a weighted average contract
duration of ~7 years on PPL’s assets.

Counterparty risk
We estimate ~40% of PPL’s cash flows are supported by
Supermajors / Integrateds – well positioned to weather the
downturn. Meanwhile, as a barometer for the ~35% of cash
flows supported by the “regular E&P sector”, of the 42
customers signed up for the 420 mpbd, $2.4 bln Phase III
conventional pipeline system expansion, ~90% of shippers
recently confirmed their take-or-pay nominations, with the other
~10% remaining committed, but with delayed volumes.

Long-term dividend growth of ~10%
On the dividend front, we forecast a 5% dividend increase for
mid-2016e, moving up to 10% increases for mid-2017e and
mid-2018, while maintaining a long-term AFFO payout ratio of
~75%.

Valuation and rating
Our $38.00 target is based on a risk-adjusted dividend yield of
5.25% applied to our 2017e dividend of $2.02/sh, a 16.0x
multiple of our 2017e Free-EBITDA of $1.3 bln, and our DCF
valuation of $37.00/sh. We currently rate PPL an Outperform.
PBA CT / PBA
19.2x
14.9x
13.7x
AFFO/sh (FD)
$2.26
$2.14
$2.54
P/AFFO
18.7x
14.1x
11.6x
Dividend per Share
$1.79
$1.88
$2.02
Dividend Yield
4.2%
6.2%
Adj. Payout Ratio
78%
86%
6.9%
79%
D/EBITDA
4.4x
5.3x
4.7x
Financial Data:
Shares Outstanding (mln)
385.4
Market Capitalization (mln)
11,322
Net Debt (mln)
Enterprise Value (mln)
Net Debt/Enterprise Value
Total Return
6,293
$17,616
36%
35.7%
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
Pembina directly or indirectly owns interests in several oil
and NGLs pipeline systems and a 50% interest in an
ethylene storage facility. Pembina has four lines of business
- conventional toll pipelines, oil sands pipelines, gas
services and the midstream business. The conventional toll
pipelines transport crude oil and NGLs volumes for a toll
rate, while the oil sands pipelines earn a rate of return on
capital invested.
Patrick Kenny, CFA – 403-290-5451
[email protected]
Associate:
Michael Nguyen – 416-869-7566
[email protected]
Stock Performance
Vol. (mln)
Pembina Pipeline
$60
2.5
$48
2.0
$36
1.5
$24
1.0
$12
0.5
$0
0.0
Source: Bloomberg
Jan-16
EV/Free-EBITDA
Jan-15
$1,289
Jan-14
$0
$1,069
Jan-13
$0
$942
Jan-12
$0
Free-EBITDA (mln)
Jan-11
Maint. Capex (mln)
Jan-10
$1,289
Jan-09
2017e
$1,069
Jan-08
2016e
$942
Jan-07
2015e
Jan-06
Bloomberg/Reuters: U.S.
EBITDA (mln)

PPL CT / PPL.TO
Jan-05
$37.21 - $22.95
Bloomberg/Reuters: Canada
Jan-04
52-week High-Low (U.S.)
HIGHLIGHTS
Jan-03
$43.66 - $30.51
Jan-02
52-week High-Low (Canada)
Jan-01
Stock Data:
(Year-End December 31)
One stop midstream shop, with dividend
growth intact!
Jan-00
Est. Total Return
NBF Dividend All-Star
Page 26
Title: Pure Multi-Family REIT - RUF.U (V) US$4.70
Price: US$4.70
StockRating: Outperform
TargetPrice: US$6.00
Headline: Portfolio Fundamentals Support Elevated Yield
Department Theme Piece
Real Estate
Pure Multi-Family REIT
US$4.70
RUF.U (V)
Outperform
Stock Rating:
Target:
US$6.00
Risk Rating:
Average
Est. Total Return
NBF Dividend All-Star
Portfolio Fundamentals Support Elevated Yield
35.7%
HIGHLIGHTS
Stock Data
Cash Yield
8.0%
Implied Price Return
27.7%
52-week High-Low

US$5.70 - US$4.27
Bloomberg/Reuters:
RUF/U.CN / RUFu.V
Forecasts (US$):
FYE Dec 31
2014a
2015e
2016e
Revenue
$48.1
$58.6
$80.1
EBITDA
$25.5
$32.3
$45.5
FFO / Class A Unit
$0.46
$0.45
$0.53
AFFO / Class A Unit
$0.43
$0.43
$0.49
Distribution
$0.38
$0.38
$0.38
FFO Payout
82.8%
84.4%
68.9%
AFFO Payout
89.8%
89.6%
73.8%
EV/EBITDA
21.2x
15.4x
15.7x
P/FFO
10.1x
10.4x
8.9x
P/AFFO
11.0x
11.0x
9.5x
Financial Data (US$):
Class A Units Outstanding (mln)
49.1
Market Capitalization (mln)
$230.7
Net Debt (mln)
$308.3
Net Debt to GBV
57%
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
Pure Multi-Family REIT is a Canadian-based, publicly
traded multi-family investment trust offering investors
USD denominated exposure to real estate in the
southwestern United States. Pure currently owns 15
multi-unit properties throughout Texas and one interest
in Arizona, seeking to expand its asset base through
accretive acquisitions of high quality multi-unit
properties in the Sunbelt region.
Trevor Johnson, CFA, MBA - (416) 869-8511
[email protected]
Associates:
Endri Leno - (416) 869-8047
[email protected]
Kyle Stanley - (416) 507-8108
[email protected]
Alex Bauer - (416) 869-7535
[email protected]




Exclusively US Sunbelt multi residential portfolio
RUF owns and operates a portfolio of 14 properties (16 following
closing of TPC portfolio) that comprise ~4,700 units, ~267 buildings,
~253 acres of land and ~4.2 mln of rentable square feet located
throughout Texas and one property in Arizona as of Q3/15. RUF’s
portfolio is well positioned to capture the ongoing U.S. economic
recovery, which has generally been more pronounced in the
Sunbelt region with above-average growth rates in population,
employment & GDP.
Positive occupancy and rental rate growth
This favorable market backdrop and RUF’s high quality new
portfolio have contributed nicely to occupancy and same-property
rental rates, both growing aggressively since the July 2012 IPO. At
~98% current occupancy portfolio upside is constrained in 2015, but
we continue to expect rent increases in the mid-single digit range to
contribute to organic growth.
High grading portfolio a source of cash
RUF’s strategy is to profitably dispose older assets (Class B
properties) and apply the proceeds towards the acquisition of newer
Class A properties (which comprise almost the entire portfolio). RUF
recently announced the acquisition of two Class A multi-family
apartment communities for a purchase price of ~US$118 mln
following the disposition of several assets over 2015 amounting to
~US$67.8 mln in proceeds.
Balance sheet not a concern
RUF’s net debt to GBV ratio of ~57% sits slightly above its peer
group (~55%) but poses no concern given the predictability of its
cash flows.
Low payout supports elevated yield
There is some investor concern that the Texas housing market
could get impacted by the oil price decline, but evidence suggests
RUF is well-positioned to weather headwinds (about 70% the
portfolio is in Dallas which is less exposed). We argue this risk is
more than adequately reflected in RUF’s 8.0% yield, which is
well-covered by a 74% 2016e AFFO payout ratio. Our US$6 target
price is derived using a ~12x P/AFFO multiple, Outperform rating.
Stock Performance (Reuters)
Page 27
Title: Premium Brands Holdings Corp. - PBH (T) Cdn$17.32
Price: Cdn$17.32
StockRating: Outperform
TargetPrice: Cdn$19.50
Headline: NBF Dividend All-Star
Department Theme Piece
Industrial Products
Savaria Corporation
$4.92
SIS (T)
Outperform
Stock Rating:
$6.50
Target:
Above Average
Risk Rating:
Est. Total Return
4% yield is icing on the cake for this strong
performer with a compelling valuation
36.2%
Stock Data:
52-w eek High-Low
$6.30 - $4.10
Bloomberg/Reuters
SIS CN / SIS.TO
Shares Outstanding (basic) (mln)
Market Capitalization (mln)
(Year-End Dec. 31)
HIGHLIGHTS

Expanding presence in aging market
As one of the leaders in the North American personal mobility
products market, Savaria is expected to benefit from a clear
demographic trend (aging population). In addition, we see
company-specific organic growth opportunities such as
increasing volume at existing dealers, adding new dealers and
expanding its network of Silver Cross-bannered stores.

Ended 2015 on a strong note, which bodes well for 2016
Last week, Savaria announced better-than-expected
preliminary Q4/15 sales and EBITDA, which rose 24% and 40%
y/y respectively. These results imply that Savaria will beat its
prior 2015 sales guidance of $92 million and be at the upper
end of its targeted EBITDA range. Savaria’s strong momentum
at the end of 2015 and strong bookings year-to-date bode well
for 2016 in our view.

Rock-solid balance sheet
A $27.5 million cash position (net cash of $9.8 million), $7.1
million in unused credit and projected free cash flow generation
are supportive of the organic and acquisition driven growth
strategy as well as dividends. We estimate that Savaria could
add $3-5 million in pre-synergy EBITDA using this ammunition.

Dividend increased 25% in 2015; Now yields 4.1%
Savaria increased its quarterly dividend to $0.05 per share in
Sept. 2015, a 25% jump. The 4.1% dividend yield looks safe
based on projected payouts of ~50% on free cash flow.

Current valuation at low end of historical range
Our $6.50 target implies 12x EV/EBITDA on our 2016
estimates. The current 8.8x multiple on 2016e is at the low-end
of SIS’ historical range of ~8x to 14x, unwarranted in our view
given strong operational momentum, attractive dividend and
potential M&A.
32.6
$160
2014A
2015E
2016E
Revenues (mln)
$82.9
$95.3
$109.6
EBITDA (mln)
$11.2
$14.4
$17.0
EBITDA Margin
13.5%
15.2%
15.5%
EPS (f d)
$0.23
$0.27
$0.32
P/E
21.6x
18.1x
15.6x
EV/EBITDA*
*Using current EV
13.5x
10.4x
8.8x
Financial Data:
NBF Dividend All-Star
As at Se ptem be r 30, 2015 (Q3 2015)
Net Debt (Net Cash) (mln)
-$9.8
Net Debt / EBITDA
-0.7x
Dividend per share
Dividend yield
$0.20
4.1%
Industry Rating: Overweight
(NBF Economics & Strategy Group)
Company Profile:
Savaria is a North American leader in personal mobility
products and does business in two segments: Accessibility
(stairlifts, elevators, wheelchair lifts, etc.) and Adapted
Vehicles (van conversions).
Stock Performance
Leon Aghazarian, M.Sc. – (514) 879-2574
[email protected]
Associates:
Frederic Tremblay, M.Sc., CFA – (514) 412-0021
[email protected]
Connor Sedgewick - (514) 390-7825
[email protected]
Source: www.bigcharts.com
Page 28
Title: Slate Retail RE IT - SRT.U/SRT.UN (TSX) US$9.75/C$14.19
Price: US$9.75/C$14.19
StockRating: Outperform
TargetPrice: US$12.75
Headline:
Grocery-Anchored
Portfolio
Supports
Attractive
Department Theme Piece
Real Estate
Slate Retail REIT
US$9.75/C$14.19
SRT.U/SRT.UN (TSX)
Outperform
Stock Rating:
US$12.75
Target:
Below Average
Risk Rating:
Est. Total Return
NBF Dividend All-Star
Grocery-Anchored Portfolio Supports
Attractive Distribution
38.8%
HIGHLIGHTS
Stock Data (US$):
Cash Yield
8.0%
Implied Price Return
30.8%
52-week High-Low
US$11.49 - US$9.65
Bloomberg/Reuters:
SRT/U CN / SRT.U-T

Forecasts (US$):
2014a*
2015e
2016e
Revenue (US$ mln)
35.8
79.5
95.9
NOI (US$ mln)
25.0
56.4
67.4
69.8%
71.0%
71.7%
FYE Dec 31
NOI %
19.6
49.6
60.2
EBITDA %
54.8%
62.3%
62.7%
Distribution (US$)
$0.55
$0.76
$0.78
EBITDA (US$ mln)
FFO/unit (IUS$)
$0.89
$1.34
$1.40
FFO Payout
61.5%
56.6%
55.7%
AFFO/unit (US$)
$0.80
$1.16
$1.20
AFFO Payout
68.0%
65.6%
65.1%
EV/EBITDA
39.7x
15.7x
13.0x
P/FFO
11.0x
7.3x
7.0x
P/AFFO
12.1x
8.4x
8.1x


* April 2014 TSX listing onward
Financial Data:
Units Outstanding (mln)
28.7
Units Outstanding - Diluted (mln)
32.0
Market Capitalization (US$ mln)
279.4
Debt to GBV
NAV per unit (NBF est)
55%
US$12.75
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
Slate Retail REIT holds a portfolio of grocery-anchored
retail properties in secondary U.S. markets. The
portfolio is comprised of 66 properties across 7.6 million
square feet in 20 U.S. States. Slate Retail REIT is
externally managed by Slate Asset Management.

Pure-play U.S. grocery-anchored portfolio
Slate Retail REIT (SRT) owns and operates a portfolio of 66
properties totalling 7.6 million square feet across 20 U.S.
states. The properties are primarily concentrated in
secondary markets in Florida (11% of GLA), North Carolina
(10% of GLA) and Pennsylvania (10% of GLA). The
properties are anchored by large, non-cyclical, international
grocer tenants such as Walmart, Kroger, Delhaize, etc.
These blue-chip tenants have stable sales and outlooks,
long-term tenancies and minimal impact from e-commerce.
Below market rents to drive organic growth
SRT’s weighted average in-place rent of US$10.05 per
square foot is ~20% below comparable market rents, a
discount we expect to narrow over coming quarters as the
REIT continues to renew rents to market.
Acquisitions expected to continue
The REIT has more than doubled its portfolio in less than two
years (66 properties 7.6 mln square feet currently vs. 29
properties 3.5 mln square feet at 2014 TSX-listing), a trend
we expect to continue due to: 1) a fragmented U.S. retail
property market (only ~5% of retail centres are owned by the
top 25 landlords); 2) ~$222 bln of commercial mortgage
backed securities issued with loose credit standards in
2006-07 will need refinancing in 2016-17; 3) the pricing gap
between secondary vs. primary markets has widened
suggesting relative undervaluation in secondary markets.
High yield and low payout support US$12.75 target price
Our US$12.75 target price is in line with our NAV and well
complemented by a high yield / low payout combination
(8.2% distribution yield vs. 2016e AFFO payout of 65%).
Stock Performance (Reuters)
SRTu.TO
Price
12
11.5
11
10.5
Endri Leno, MSc, MBA - (416) 869-8047
[email protected]
10
9.5
Volume
0
M J J S
N D J
2014
F M A M J J A S ON D
2015
J
F
2016
Page 29
Title: Student Transportation Inc. - STB/STB (T; N) Cdn$6.65; $5.47
Price: Cdn$6.65;
StockRating: Outperform
TargetPrice: Cdn$8.50
Headline:
Grocery-Anchored
Portfolio
Supports
Attractive
Department Theme Piece
Transportation
Student Transportation Inc.
Cdn$4.76; $3.32
STB/STB (T; N)
Outperform
Stock Rating:
Cdn$7.75
Target:
Above Average
Risk Rating:
Est. Total Return
96.5
Market Capitalization (mln)
Net Debt (mln)
Enterprise Value (mln)
Dividend Yield
$459.3
$274.2
$733.5
13.2%
52-w eek High-Low
Average Weekly Volume
Net Tangible Book Value per Share
Revenue (mln)
EBITDA (mln)
CFPS
DPS
EPS
Steady at the Wheel with an Enticing 13%
Yield and an Estimated 66% Payout Ratio
72%
Shares Outstanding (mln)
Estim ates
NBF Dividend All-Star
2015
$ 554.8
$ 72.5
$ 0.42
$ 0.44
$0.04
HIGHLIGHTS

USD$0.44/sh dividend looking better as CAD slides…
Recall Student Transportation’s dividend is paid in USD,
aligning with approximately 90% of STB’s revenue and cash
flow. The USD$0.44/sh (annualized) dividend yields an
attractive 13% at the current price. With the U.S. dollar
currently worth approximately $1.43 Canadian dollars, foreign
exchange winds are blowing on the backs of Canadian STB
shareholders.

...with a falling payout ratio that suggests sustainability…
The dividend continues to appear viable as the payout ratio
trends lower. We calculate a manageable 66% gross payout
ratio in f2016 falling from 97% in f2015. STB’s balance sheet
also continues to improve, as net debt/ttm EBITDA has
decreased from 3.8x in f2014, to 2.8x in f2015, to an expected
2.4x in f2016.

…and macro trends staying in favor…
In addition to the aforementioned f/x tailwinds, management
continues to highlight falling fuel expense y/y in both fiscal
2016 and 2017 as oppressed commodity prices continue to
slump, believing the savings could increase EBITDA margins
by 150-200 basis points relative to f2015.
$7.44 - $4.34
1,081,837
-$0.15
2016E
2017E
$ 601.2
$ 90.9
$ 0.77
$ 0.44
$0.17
$ 657.9
$ 107.2
$ 0.90
$ 0.44
$0.29
Balance Sheet
2015
2016E
2017E
Debt/EBITDA 1
Interest Coverage
2.8x
4.2x
2.4x
6.6x
2.2x
7.1x
Valuation
2015
2016E
2017E
P/E
EV/EBITDA
Target EV/EBITDA
nmf
8.5x
12.1x
nmf
7.4x
10.6x
nmf
6.5x
9.2x
1: year end debt net of cash vs. TTM EBITDA
All amounts in Cdn$ unless otherwise noted.
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
Student Transportation is the 3rd largest provider of school
bus transportation services in the US. STB is a leading
school bus company aggregating operations through
consolidation of existing providers, targeted bid-ins, and
conversion of in-house operations.
Outperform Rating and $7.75 target
Management has guided towards a secured increase in
annual revenue of 7% in f2016 relative to 2015 (with the
possibility of additional growth), in line with our current
forecast which calls for 8% y/y revenue growth ($601.2 mln in
f2016). Our $7.75 target is driven by 9.2x 2017 EV/EBITDA, in
line with the long term average. Outperform.
Stock Performance

$8.00
6.0
$7.00
5.0
Greg Colman - (416) 869-6775
[email protected]
Michael Storry-Robertson - (416) 507-8007
[email protected]
Westley Macdonald-Nixon – (416) 507-9568
[email protected]
Price
Andrew Jacklin - (416) 869-7571
[email protected]
4.0
$5.00
$4.00
3.0
$3.00
2.0
$2.00
1.0
$1.00
$0.00
2015-01-29
0.0
2015-04-29
Source: Thomson ONE, NBF
2015-07-29
2015-10-29
Volume (mm)
$6.00
Page 30
Title: Bank of Montreal - BMO (T) Cdn$59.12
Price: Cdn$59.12
StockRating: Sector Perform
TargetPrice: Cdn$64.00
Headline: Title
Department Theme Piece
Life Insurance
Sun Life Financial
Cdn$38.20
SLF (T)
Outperform
Stock Rating:
Cdn$44.00
Target:
(Unchanged)
Average
Risk Rating:
19%
Stock Data:
52-week Low-High
$36.88 - $45.65
Shares Outstanding EOP (mln)
611
Market Capitalization ($mln)
$26,807
Quarterly Dividend Per Share
$0.39
Dividend Yield
4.1%
Price-to-Book
1.27x
S&P/TSX Composite Weighting
1.30%
2014A
2015E
2016E
2017E
$2.86
$3.60
$3.86
$4.01
Y/Y Growth
9%
18%
9%
10%
NBF Core EPS
$2.98
$3.53
$3.84
$4.21
IFRS EPS
Y/Y Growth
83%
26%
7%
4%
Dividend / Share
$1.44
$1.51
$1.64
$1.80
IFRS F/D Avg. Shares O/S
Book Value / Share
Price / Book
Price / IFRS Earnings
Net Income to Common
618
618
617
614
$26.87
$31.03
$32.99
$34.87
1.4x
1.2x
1.2x
1.1x
13.4x
10.6x
9.9x
9.5x
1,762
2,210
2,367
2,451
SLF Canada
972
925
957
1,022
SLF U.S.
409
449
485
528
SLF Asset Management
823
1,118
1,265
1,373
SLF Asia
Corporate
220
(14)
300
2
325
18
345
23
2,793
3,056
3,330
(607)
(100)
(661)
(100)
2,349
2,569
Core Earn. from Ops.
Core Earn. (pre-tax)
Taxes
Pref. Div.
Core Earn. (after-tax)
Positive Cash Flow Dynamics Underpin
Increasing Return of Capital
(Unchanged)
Est. Total Return
(Year-End 12/31)
NBF Dividend All-Star
(Unchanged)
2,410
(469)
(111)
1,830
(530)
(101)
2,162
Industry Rating: Overweight
(NBF Economics & Strategy Group)
Company Profile: Sun Life Financial is the third largest
Canadian lifeco by market capitalization. The company
offers a diverse range of life and health insurance,
investment management and retirement products for both
individuals and groups. Although SLF's primary operations
are in the United States and Canada, it also has a sizeable
presence in the United Kingdom and several Asian markets
(China, India, Hong Kong, the Philippines and Indonesia).
Peter Routledge - (416) 869-7442
[email protected]
Associate: Parham Fini - (416) 869-6515
[email protected]
Associate: Paul Poon - (416) 507-8006
[email protected]
HIGHLIGHTS
 SLF has a dividend yield of 4.1%, the highest amongst the four life
insurers in our coverage universe, supported by the positive cash flow
dynamics at its two primary franchises (insurance and wealth
management).
 We expect that SLF to continue to raise its dividend every two
quarters. Last quarter, consistent with our forecast, SLF announced a
dividend increase to take into effect in Q4 f2015. However, the quantum
of the raise ($0.01/share or 3%) fell short of our forecast ($0.03/share or
8%). SLF’s payout ratio of 48% sits at the upper range of its target
dividend payout ratio range of 40% - 50%. At our 2015 Financial
Services Conference, SLF CFO Colm Freyne stated that SLF’s robust
cash flows will enable the insurer to remain at the high end of its target
payout range. We forecast that SLF will raise dividends/share by 9% in
f2016 and 10% in f2017.
 SLF well-positioned to build on asset management platform. Last
quarter, SLF consolidated its asset management operations, including
recent acquisitions (Prime Advisors Inc., the Bentall Kennedy Group,
and Ryan Labs Asset Management) under Sun Life Investment
Management (SLIM) in addition to MFS, within a new segment titled SLF
Asset Management. We consider SLF to have the most complete asset
management platform amongst its life insurer peers and view the
company’s emerging institutional wealth management strategy, built
around liability-driven investing, to be a viable one that is both focused
and leverages the company’s competitive strengths. MFS continues to
anchor SLF’s U.S. presence, continuing to earn through a challenging
environment.
 SLF is rated Outperform rating; price target of $44. We have rated
SLF Outperform since March 2015 because, we argued, the company
would continue to benefit from the positive cash flow dynamics at its two
primary franchises. This condition gives SLF the financial flexibility to not
only consider adding to its franchises via acquisitions but to also return
more capital to shareholders in the form of common share buybacks and
dividend increases. Our target is 11.0x our estimated f2017 EPS, a 5%
premium to peers versus 9.9x our forecasted f2016 EPS today.
Stock Performance
Page 31
Title: Bank of Montreal - BMO (T) Cdn$59.12
Price: Cdn$59.12
StockRating: Sector Perform
TargetPrice: Cdn$64.00
Headline: Title
Department Theme Piece
Banking
Toronto-Dominion Bank
Cdn$50.18
TD (T)
Outperform
Stock Rating:
Cdn$59.00
Target:
Est. Total Return
22%
Stock Data:
52-w eek Low -High
$47.75 - $56.48
Shares Outstanding EOP (mln)
1,855
Market Capitalization ($mln)
$91,714
S&P/TSX Composite Weighting
6.20%
2014A 2015A
2016E
2017E
$5.33
Core Cash EPS
$4.27
$4.61
$4.93
% Grow th
15%
8%
7%
8%
$4.14
$4.21
$4.80
$5.21
Net Inc. to Common EPS
% Grow th
20%
2%
14%
8%
Dividend / Share
$1.84
$2.00
$2.16
$2.32
1,877
F/D Avg. Shares
1,845
1,854
1,866
Price / Earnings
11.8x
10.9x
10.2x
9.4x
Core Cash Net Income
$7,877 $8,543 $9,205
$10,006
NI to Equity Holders
$7,776 $7,912 $9,061
$9,876
Canadian P&C
3,929
4,430
4,515
U.S. Retail
2,110
2,488
2,997
3,541
Canadian Wealth & Insurance
1,305
1,508
1,591
1,727
813
873
843
896
(381) (1,387)
(886)
(847)
Wholesale Banking
Corporate Segment
Strengthening Outlook for U.S. Platform
Below Average
Risk Rating:
(Year-End 10/31)
NBF Dividend All-Star
4,560
Financial Data: (As of last quarter-end)
Price / Book Value
1.5x
Dividend Inform ation:
Quarterly Dividend Per Share
$0.51
Dividend Yield
4.1%
Industry Rating: Overweight
(NBF Economics & Strategy Group)
Company Profile: TD Bank is the second largest Canadian
bank in terms of assets. TD operates along four business
lines. Canadian and U.S. Personal and Commercial
Banking provide a wide range of personal banking services
in their respective jurisdictions. Wealth Management offers
self-directed brokerage services and full service brokerage
to individual investors, as well as investment management
services for institutional and high net worth individuals. The
Wholesale Bank provides capital market products and
services.
Peter Routledge - (416) 869-7442
[email protected]
Associate: Parham Fini - (416) 869-6515
[email protected]
Associate: Paul Poon - (416) 507-8006
[email protected]
HIGHLIGHTS
 TD has a dividend yield of 4.1% supported by a strengthening outlook
for its sizeable U.S. platform and accelerating earnings growth from its
Wholesale Banking segment.
 We expect that TD will continue to raise dividends every four
quarters. We remind readers that last year, TD’s management indicated
that the bank would break from the pattern of a dividend increase every
other quarter, as had occurred since Q2 f2011. TD will continue to aim
for common share dividend payout ratio towards the middle of its 40% to
50% target range but reduce the incidence of dividend increases to give
the bank more financial flexibility. We expect TD to announce its next
dividend increase of $0.04/share (8%) to $0.55/share in the first quarter
of f2016, taking effect in Q2 f2016 with a similar increase (7%) in f2017.
 Capital position to strengthen. TD reported a Basel III common equity
tier 1 (CET1) ratio of 9.9% at the end of Q4 f2015, trailing most of its Big
Six bank peer group. Growth in risk-weighted assets, reflecting strong
loan growth in wholesale and the U.S., and restructuring charges offset
internal capital generation last quarter. However, we expect TD to reach
a CET1 ratio of 10.4% by the end of f2016, in line with peers.
 TD is rated Outperform; price target of $59. We maintain our
Outperform rating for three reasons. First, amongst its peers, TD has the
strongest U.S. retail banking platform along with the greatest gearing to
a rising interest rate environment in the United States – a by-product of
its core deposit-heavy funding mix in that country. Second, we expect
TD’s Wholesale Banking segment to accelerate its earnings growth over
the next few years as the investment bank expands its appetite for
wholesale credit risk, boosts underwriting revenue and does better with
cost control. Third, we think the bank protests too much on EPS growth
– even after incorporating our bearish outlook on Canadian P&C
Banking loan losses, we still get to 7% EPS growth without assuming
any common share repurchases. Our price target is 11.1x our four
quarter forward EPS estimate one year from today, an 8% premium to
the average of TD’s rated peers.
Stock Performance
Page 32
Title: Innergex Renewable Energy Inc. - INE (T) Cdn$9.53
Price: Cdn$9.53
TargetPrice: Cdn$11.25
Headline: Recent dip creates attractive entry point
Department Theme Piece
Independent Power Producers & Energy Traders
TransAlta Renewables Inc.
Cdn$9.42
RNW (T)
Outperform
Stock Rating:
Cdn$12.50
Target:
Above Average
Risk Rating:
Est. Total Return
NBF Dividend All-Star
Sustainable dividend payments with steady
cash flow growth
42%
HIGHLIGHTS
Stock Data:
52-w eek High-Low (Canada)
$13.50 - $8.99
Bloomberg/Reuters: Canada
(Year-End Dec 31)
RNW CN / RNW-T
2014a
2015e
2016e
Revenue (mln)
$ 233.4
$ 227.3
$ 239.5
adj. EBITDA (mln)
$ 170.0
$ 239.1
$ 289.3
adj. EPS (diluted)
$
0.43
$
0.54
$
0.69
CAFD/sh
$
0.78
$
0.85
$
0.93
Dividends/sh
$
0.77
$
0.82
$
0.88
Dividend Yield
8.2%
8.7%
Payout Ratio
98%
90%


9.3%
94%
P/ CAFD
12.0x
11.1x
10.1x
adj. EV/EBITDA
10.1x
10.3x
12.0x

Financial Data:
Market Capitalization (mln)
$ 2,188
Total Debt1 (mln)
$
762
Price/Book Ratio
0.96x
Debt/Capital
0.23x
2
190.8
Sh/O Basic (mln)
FD Outstanding2 (mln)
232.3

Source: Thomson Financial and NBF estimates
1
Sept 30th, 2015
2
Proforma

Industry Rating: Underweight
(NBF Economics & Strategy Group)
Company Profile:
TransAlta Renewables (RNW) operates 1,680 MW (net) of
generating assets in North America and Australia and a gas
pipeline asset in Australia, all under long-term off-take
contracts. The company operates as a “Yield Co.”, with
assets dropped down from its parent company, TransAlta
Corp. (TA-TSX). TA maintains an interest of roughly 64% in
RNW.
Dividend all-star that raised dividend every year
RNW has raised its dividend every year since its IPO in 2013
and we expect this trend to continue as long as RNW’s
dropdown inventory grows. RNW has recently announced a
4.8% increase to its dividend to $0.073/sh (monthly) and it
expects a further 6-7% increase in the dividend mid 2017E.
RNW’s yield is high at 9.1% but sustainable over long-term.
Dropdown inventory continues to grow
RNW’s parent, TransAlta (TA), plans to increase its focus on
renewables and to drop down more assets into RNW.
Recently, RNW has agreed to purchase preferred shares that
track the cash flows for three of TA’s assets for $540 mln and
also retains a ROFO for expansion opportunities at the site.
Alberta GHG plan will benefit RNW over long-run
Alberta released a plan to reduce greenhouse-gas emissions
which includes phasing out coal power by 2030. RNW has the
strongest Alberta presence in our universe, including 4 hydro
and 10 wind assets. With the government pushing for
renewable energy in Alberta, RNW could benefit from
government subsidies and higher energy prices for its current
and future growth pipeline.
New shareholder, AIMCo, could support future liquidity
TA sold $200 mln in shares of RNW to the Alberta Investment
Management Corporation (AIMCo). With this, TA’s proforma
ownership in RNW will drop from about 76% to 64%.
Target at $12.50/sh, with Outperform rating
Our target uses a discount rate of 8.5%, consistent with its
peer group and implies an adj. EV/EBITDA of 9.9x 2017E. We
believe the dividend is attractive and should increase by 6 to
7% with the start of the South Hedland facility in H2 2017E
Stock Performance
Rupert M. Merer, P.Eng CFA - (416) 869-8008
[email protected]
Associates:
Ryan Wong, P.Eng MBA – (416) 869-6763
[email protected]
Steven Hong – (416) 869-7538
[email protected]
Source: Reuters
Page 33
Title: Groupe Aeroplan Inc. - AER (T) Cdn$10.42
Price: Cdn$10.42
StockRating: Outperform
TargetPrice: Cdn$13.50
Headline: Q2 EBITDA Ex-Items Beats, NCIB Expands, Air Canada Issues
Department Theme Piece
Media
Transcontinental Inc.
Cdn$17.86
TCL.A (T)
Outperform
Stock Rating:
Cdn$22.50
Target:
Above Average
Risk Rating:
Est. Total Return
HIGHLIGHTS
52-week High-Low (Canada)
$21.85 - $13.18
52-week High-Low (U.S.)
NA
Bloomberg/Reuters: Canada
Bloomberg/Reuters: U.S.
Revenue (mln)
EBITDA (mln)
2015a
2016e
2017e
$2,025.2
$1,903.0
$378.7
$394.0
$380.2
$2.39
$2.40
$2.39
7.5
7.4
7.5
P/E
EV/EBITDA
4.4
3.9
3.7
$223.3
$241.0
$188.7
$2.86
$3.09
$2.42
FCF per share
Dividend
Dividend / FCF

TCL/A / TCL'A-T
NA
$2,002.2
FD EPS ex-items
Free Cash (mln)
Declining Leverage & Robust FCF Profile
Support M&A & Sustained Dividend Growth
29.8%
Stock Data:
(FYE Oct. 31)
NBF Dividend All-Star
$0.67
$0.72
$0.78
23.4%
23.2%
32.1%

F2016e FCF includes $31MM payment from The Globe
and Mail and $9MM payment from Revenue Québec.
Financial Data (as at October 31, 2015):
Shares Outstanding (mln)
78.0
Float (mln)
64.8
Market Capitalization (mln)
Net Debt
Shareholders' Equity (mln)
$1,393.4
$345.5
$1,016.3
Net Debt/Capital
BVPS / Price/Book
Dividend / Yield

25.4%
$13.03/1.4x
$0.68/3.8%
Industry Rating: (Media): Market Weight
(NBF Economics & Strategy Group)
Company Profile:
Transcontinental is one of North America’s largest
commercial printers (#1 in Canada) with operations primarily
in Canada and, to a lesser extent, in the U.S. The company
is a leading publisher of weekly newspapers & door-to-door
flyer distribution. It acquired U.S.-based Capri Packaging in
May 2014 to add a third leg to its platform, with the purchase
of Ultra Flex Packaging on Sept. 30, 2015 helping to bulk up
the contribution from Packaging.

Canada’s largest printer building up packaging division.
Transcontinental is Canada’s largest commercial printer and
one of the biggest in North America. Its media division
consists of Local Solutions, Interactive Marketing Solutions,
and Business Information Solutions & Education. Following
the acquisitions of Capri Packaging in 2014 and Ultra Flex
Packaging last year, packaging is emerging as a key 3rd piece
of the story. Based on PF2015, the revenue split between
Printing/Media/Packaging was 64%/27%/9%, respectively.
Stable capex & ongoing optimization efforts drive FCF.
Between f2008 and f2009, the company invested over $500
million in its printing platform to satisfy new and/or expanded
mandates, gain share, and establish a national retail flyer
platform. Since then spending on capex (incl. intangibles) has
declined to $70-$75 million per year. Management continues
to extract efficiencies across the organization. We think more
plant consolidation is likely to be pursued, as the company
continues to optimize its printing platform. Transcontinental
now operates 23 plants, down from 29 in 2012 and 54 in 2008.
Low payout signals plenty of room to grow the dividend.
At Q4/15, net debt to EBITDA stood at 0.9x, below the
company’s historical target range of 1.0x to 2.0x. In the
absence of M&A which is expected or buybacks, we forecast
leverage to drop to 0.4x in f2016 and to 0.1x in f2017. We look
for annual dividend growth to continue with the reporting of
Q1/16 results in March (+6.3% with Q1/15, +10% with Q1/14).
Transcontinental is rated Outperform, $22.50 target.
Our target, based on our NAV, implies EV/EBITDA multiples of
4.9x f2016E and 4.7x f2017E. The company’s forward
EV/EBITDA multiple averaged 5.3x over the past 13 years
and 4.5x over the past 8 years. We upgraded the stock to
Outperform from Sector Perform on Jan. 20, 2015.
Stock Performance (source: Thomson Reuters)
Daily TCLa.TO
1/26/2015 - 2/11/2016 (TOR)
Line, TCLa.TO, Trade Price(Last), 1/25/2016, 17.86, +0.18, (+1.02%)
Price
CAD
21
20.5
20
19.5
19
18.5
Rémi Marcoux, founder and chairman, controls 16.5%
equity and 71.7% votes.
18
17.86
17.5
17
16.5
16
15.5
Adam Shine, CFA - 514-879-2302
[email protected]
15
14.5
14
Associates:
Piotr (Peter) Stusio, CFA – 514-879-2564
[email protected]
Luc Troiani, CFA – 416-869-6585
[email protected]
Auto
Vol, TCLa.TO, Trade Price, 1/25/2016, 218,060.00
Volume
500,000
218,060.00
Auto
02 17 02 16
01 16
01 19 01
16
02 16
04 17
01 16
01 16
02 16 01
16 04 18 01
Feb 15 Mar 15
Apr 15 May 15
Jun 15
Jul 15
Aug 15 Sep 15
Oct 15
Nov 15
Dec 15
Jan 16
Page 34
Title: Baytex Energy Corp. - BTE (T/NYSE) Cdn$44.46
Price: Cdn$44.46
StockRating: Outperform
TargetPrice: Cdn$52.00
Headline: NBF Dividend All-Star
Department Theme Piece
Oil & Gas Exploration and Production
Vermilion Energy Inc.
Cdn$33.60
VET (T;N)
Outperform
Stock Rating:
Cdn$48.00
Target:
Above Average
Risk Rating:
Est. Total Return
52-week High-Low (Cdn$)
$29.71 - $62.80
Dividend Yield
110.8
Market Cap. (mln)
$3,723.5
Net Debt (mln)
$1,400.4
Enterprise Value (mln)
$5,123.9
Production
2015e
2016e
2017e
Oil & NGL's (bbls/d)
33,048
35,950
37,309
% Nat. Gas
Pricing*
131.0
162.3
172.1
54,874
63,000
66,000
40%
43%
43%
2015e
2016e
2017e
WTI (US$/bbl)
$49.00
$39.00
$44.00
Brent (US$/bbl)
$53.58
$39.00
$45.00
AECO (Cdn$/mcf)
$2.56
$2.70
$3.10
Estimates
2015e
2016e
2017e
CFPS
$4.54
$4.32
$5.16
-$0.97
-$0.71
-$0.19
EPS
DPS
Cash Flow (mln)
Capex (mln)
$2.58
$2.58
$2.58
$502.0
$492.5
$601.8
$485.0
$285.0
$350.0
$1,437.9
$1,401.3
$1,383.3
D/CF
2.9 x
2.8 x
2.3 x
Basic Payout (%)
56%
59%
50%
Total Payout (%)
153%
117%
108%
Total Net Payout (%)
122%
88%
84%
Net Debt (mln)
NAV ($/sh)
$34.56
CNAV ($/sh)
$40.50
Valuation
2015e
2016e
EV/DACF
9.4 x
9.7 x
8.2 x
$96,437
$85,155
$82,032
$37.24
$23.91
EV/BOE/D
EV/boe P+P
HIGHLIGHTS
7.7%
Shares Outstanding (mln)
Boe/d (6:1)
Diversified International Asset Base with
Leverage to Premium European Gas
51%
Stock Data - Q3a 2015:
Nat. Gas (mmcf/d)
NBF Dividend All-Star
P/CNAVPS

Diversified Asset Base with Leverage to European Gas
Vermilion has a globally diversified asset base with production
coming from France, Netherlands, Germany, Ireland, Australia,
Canada and the U.S.A. This globally diversified portfolio
provides access to premium global pricing and top-quartile
netbacks, with significant leverage to European gas prices
(~40%), which are currently trading ~C$6.25/mcf and more
than double North American gas prices.

Conservative Budget Ensures Sustainability
Vermilion recently announced a formal 2016 capital budget of
$285 mln which is down -41% Y/Y and -19% from its preliminary
guidance in November. However, with first gas from the Corrib
gas project (offshore Ireland) achieved in late 2015, production
for the year is expected to grow 15% Y/Y to a range of
62,500-63,500 boe/d, while increasing European gas exposure.

Capital Program & Dividend Expected to be Fully Funded
The current 2016 capital program along with the cash dividend
is expected to be fully funded by operating cash flow down to
the mid US$30/bbl WTI range, while the company also noted
that the budget is flexible with the ability to increase or decrease
spending, depending on what happens with commodity prices.

Outperform Rating with a $48.00 Target
Despite the commodity downturn, VET has been able to
demonstrate strong capital discipline and flexibility which we
believe will allow them to maintain the dividend while delivering
impressive Y/Y production growth. We currently rate Vermilion
as Outperform and have a 12-month target price of $48.00
which is based on a 1.2x CNAV multiple and reflects a 2016
EV/DACF multiple of 12.8x.
2017e
0.8x
Source: Company reports, NBF estimates
Note: Debt figures include convertible debentures
All figures in Cdn$ unless otherwise noted
Industry Rating (Oil & Gas Exploration and
Production): Market Weight
(NBF Economics & Strategy Group)
Associate: John Hunt - (403) 441-0955
[email protected]
Associate: Jason Wai - (403) 355-6643
[email protected]
$65
1,800
1,600
$60
1,400
$55
Price ($/sh)
Kyle Preston, CFA, CMA - (403) 290-5102
[email protected]
Stock Performance
1,200
$50
1,000
$45
800
600
$40
400
$35
$30
Jan-15
Source: Bloomberg
200
Mar-15
May-15
Jul-15
Sep-15
Nov-15
0
Jan-16
Volume (000's)
Company Profile:
Vermilion Energy is an internationally diversified and
oil-weighted Intermediate Yield E&P pursuing a growth and
income business model. The company has a globally
diversified portfolio of assets located in France,
Netherlands, Ireland, Australia, Germany and Canada.
Approximately 60% of current production is sourced outside
of Canada, which provides the company with diversification
across geographic areas, regulatory regimes and
commodity price benchmarks.
Title: Whitecap Resources Inc. - WCP (T)
$9.38
Price: $9.38
StockRating: Outperform
TargetPrice: $12.50
Headline: Stands out from its energy peers across a number of
Department Theme
Page 35 Piece
Oil & Gas Production and Exploration
Whitecap Resources Inc.
$6.97
WCP (T)
Outperform
Stock Rating:
$11.00
Target:
Above Average
Risk Rating:
64%
Stock Data Q4/15e
52-week High-Low (Cdn$)
$5.80 - $15.62
Shares Outstanding (mln)
298.9
Current Dividend Yield
6.5%
Net Debt (mln)
$848
Market Cap. (mln)
$2,083
Enterprise Value (mln)
$2,931
Production
2015e
2016e
2017e
Oil & NGL's (bbls/d)
31,027
27,750
24,750
Nat. Gas (mcf/d)
58,788
55,500
49,500
Boe/d (6:1)
40,825
37,000
33,000
% Nat. Gas
24%
25%
25%
Pricing
2015e
2016e
2017e
WTI (US$/bbl)
$48.74
$38.75
$44.50
AECO (Cdn$/mcf)
Corp. Oil & NGL's ($/bbl)
$2.57
$2.70
$3.10
$49.94
$43.00
$50.67
Corp. Nat. Gas ($/mcf)
$2.70
$2.71
$3.18
Corp. Wellhead ($/boe)
$41.84
$36.31
$42.77
* Strip pricing 15/16 (as at 01/06/2016)
Estimates
2015e
Cash Flow (mln)
$483.3
CFPS - diluted
2016e
2017e
$266.4
$250.2
$1.67
$0.88
$0.82
CF Netback ($/boe)
$32.44
$19.67
$20.77
Capex (mln)
$370.8
$0.0
$100.0
Net Debt (mln)
$848.0
$731.0
$715.3
Valuation
2017e
2015e
2016e
P/CF
7.4 x
7.9 x
8.5 x
EV/DACF
8.0 x
9.3 x
9.8 x
Net Debt / CF
EV/BOE/D
Defensive Model in Today’s Commodity
Storm
1.8 x
2.7 x
2.9 x
$103,379
$76,057
$84,800
P/NAVPS
EV/boe P+P
1.4x
$11.74
Source: Company Reports, NBF Estimates
Industry Rating (Oil & Gas Exploration and Production):
Market Weight
(NBF Economics & Strategy Group)
 Sustainability Measures Migrate to More Favourable Levels.
As a means of improving financial flexibility in today’s tough
commodity price environment, Whitecap recently revised the 2016
budget (decreased 53% to $70 million), reduced the dividend (by
40%) and disposed of production facilities for proceeds of $70
million. In turn, Whitecap’s sustainability measures migrate to more
favourable levels, underscored by a 2016e total payout ratio of
104% and a D/CF of 3.7x (strip). Moreover, ample liquidity on the
bank line provides the company with a meaningful buffer in the
event that commodity prices deteriorate further.
 2016 Budget: Under the company’s 2016 pricing assumption of
US$37.50/bbl, Whitecap revealed a capital program of $70 million
(down 53% from $150 million), which is expected to drive production
to an annual average of 37.0 mboe/d (from 40.1 mboe/d). Based on
management’s conservative nature (WCP has a history of beating
expectations), we believe there is a healthy degree of defensibility
built into the budget (providing some potential to see incremental
upside to valuation and sustainability).
 Facility Disposition: Whitecap will fund its 2016 capital program by
way of a $70 million infrastructure disposition. Under the terms of
the arrangement, Whitecap will remain as operator and retain third
party revenues generated for an annual tariff paid to the purchaser.
In our view, Whitecap’s cost of capital on the transaction is quite
favourable, given that the annual tariff behind the arrangement is
offset by internally generated operating cost enhancements and
through G&A reductions. Moreover, Whitecap will have the option to
repurchase the facilities at any time.
 Outperform Rating and $11.00/sh Target Price: Our view for
continued outperformance of peers is backstopped by the relative
strength of sustainability measures, management’s track record of
meeting/exceeding expectations and the Street’s general bias
toward companies with relative financial flexibility and low risk
operations in today’s challenged energy environment. Whitecap
remains as one of the strongest operators/capital allocators in the
basin and a history of financial discipline gives us comfort that the
company will find ways of maintaining its sustainability even under
weaker commodity prices. Whitecap trades at a 2016e EV/DACF of
9.3x vs peers at 8.0x
Stock Performance (source: Bloomberg)
$16
14,000
$14
12,000
Volume (000's)
Company Profile:
Whitecap Resources entered the market through a reverse
takeover of Spitfire Energy in June 2010. The company has a
diversified asset base with a primary focus on the Cardium in
West Central Alberta and the Viking in Saskatchewan.
Through a combination of a focused drilling program and
accretive acquisitions the company has transitioned itself into
an intermediate yield growth company.
HIGHLIGHTS
Price ($/sh)
Est. Total Return
NBF Dividend All-Star
10,000
$12
8,000
$10
Brian Milne – (403) 290-5625
[email protected]
$8
Associate:
Mark Hirsch, P. Eng. – (403) 441-0928
[email protected]
$6
Jan-15
6,000
4,000
2,000
Mar-15
May-15
Jul-15
Sep-15
Nov-15
0
Jan-16
Page 36
Title: WPT Industrial REIT - WIR.U (TSX) US$10.00
Price: US$10.00
StockRating: Outperform
TargetPrice: US$12.50
Headline: Attractive U.S. Based Yield Opportunity
Department Theme Piece
Real Estate
WPT Industrial REIT
US$10.00
WIR.U (TSX)
Outperform
Stock Rating:
US$12.50
Target:
Average
Risk Rating:
Est. Total Return
NBF Dividend All-Star
US$ Yield Opportunity Backstopped By Strong
Portfolio Fundamentals
32.6%
HIGHLIGHTS
Stock Data
Cash Yield
7.6%
Implied Price Return
25.0%
52-week High-Low
US$12.20 - US$9.50
Bloomberg/Reuters:
WIR/U.CN / WIRu.TO
Forecasts (US$):
FYE Dec 31
2014a
2015e
2016e
Revenue
$57.4
$69.4
$75.2
EBITDA
$39.2
$47.2
$52.6
FFO/Unit
$1.00
$1.02
$1.15
AFFO/Unit
$0.82
$0.84
$0.87
Distribution
$0.70
$0.71
$0.76
FFO Payout
70.0%
70.0%
66.2%
AFFO Payout
85.5%
85.0%
87.5%
EV/EBITDA
16.7x
14.7x
13.7x
P/FFO
10.0x
9.8x
8.7x
P/AFFO
12.2x
11.9x
11.5x
Financial Data (US$):
Public Units Outstanding (mln)
Public Market Capitalization (mln)
Class B Units Outstanding (mln)
Net Debt (mln)
Net Debt to GBV
27.0
$270.3
6.7
$354.7
49%
Industry Rating: Market Weight
(NBF Economics & Strategy Group)
Company Profile:
WPT Industrial REIT offers investors USD denominated
exposure to industrial warehouses and distribution
centres across the U.S. WPT currently owns 48
warehouses / distribution facilities and two office
properties totaling 15.1 million square feet of gross
leasable area across 13 states.
Dedicated U.S. industrial portfolio
WPT Industrial REIT owns 48 distribution facilities / warehouses and
two office properties totaling ~15.1 million square feet of gross
leasable area with total portfolio occupancy of 98.1%. The portfolio’s
avg. age is ~13 years and its properties are located in key U.S.
distribution markets across 13 states, including Georgia (19%),
Tennessee (15.4%), Kentucky (12.6%), Indiana (12.6%), Ohio
(10.5%) and Illinois (9.9%).
 Warehouse/distribution tenants attractive counterparties
Characterized by high occupancy (~97.7% since IPO), long-term
tenancy, recurring revenues, visible cash flows and stable, growing
rents (+2.5% y/y forecast through 2016e). WPT’s focus on US
ecommerce & online retailers is a compelling vertical with this space
projected to continue growing immensely (sales 20%+ CAGR
through 2017e).
 Culmination of strategic review adds high-quality unitholder
Alberta Investment Management Corporation (AIMCo) acquired 4.8
mln units of WPT (representing a 19% interest, ~16% fully diluted) at
US$11.75 per unit from WPT’s parent company Welsh Property
Trust, LLC following the completion of the recent strategic review.
The acquisition of units, in our view, serves as validation WPT’s
intrinsic value and allows management to refocus efforts on REIT
operations. In conjunction with the transaction, the creation of WPT
Capital Advisors, a new entity owned by AIMCo and senior
management of Welsh, was announced. WPT Capital will assume
the role as WPT’s property manager and will also have the ability to
invest in and develop value-add real estate properties, which
provides a captive pipeline of investment opportunities for WPT.
 Elevated, sustainable yield
Investors receive a sustainable 7.6% distribution vs. a 2016e AFFO
payout of 87.5%. Our target price of US$12.50 reflects a 6.6% cap
rate and ~14x 2016e P/AFFO & we reiterate an Outperform rating.
Stock Performance (Reuters)

12.50
12.00
11.50
11.00
10.50
Trevor Johnson, CFA, MBA - (416) 869-8511
[email protected]
10.00
Associates:
Endri Leno - (416) 869-8047
[email protected]
Kyle Stanley - (416) 507-8108
[email protected]
Alex Bauer - (416) 869-7535
[email protected]
200,000
0
Feb
Mar
Q1 2015
Apr
May
Jun
Q2 2015
Jul
Aug
Sep
Q3 2015
Oct
Nov
Dec
Q4 2015
Jan
Page 37
Title: Premium Brands Holdings Corp. - PBH (T) Cdn$17.32
Price: Cdn$17.32
StockRating: Outperform
TargetPrice: Cdn$19.50
Headline: NBF Dividend All-Star
Department Theme Piece
Construction & Engineering
WSP Global Inc.
$38.33
WSP (T)
Outperform
Stock Rating:
$51.00
Target:
Est. Total Return
37.0%
HIGHLIGHTS
Stock Data:
52-w eek range
$31.13 - $49.18
Bloomberg/Reuters: Canada
WSP CN / WSP
Shares Outstanding (mln)
Adj. EBITDA (mln)
Adj. EBITDA Margin
Strong, sustainable dividend yield
At 3.9%, the current dividend yield is the highest among the
pure-play engineering firm peer group. Moreover, we consider
the dividend payment to be safe as it represents a payout ratio
of 37% over our 2016 FCF estimate.

Well diversified global platform
With over 80 acquisitions since 2006, including PB ($1.4 billion)
and MMM ($425 million) WSP is now a truly global pure-play
consultancy: Canada (22%), Americas (29%), EMEIA (36%),
APAC (14%). WSP’s diversified platform is supported by a
record backlog of $4.8 billion (as of Q3/15).

Conservative debt level, room for leverage
As of Q3/15, Net Debt/EBITDA is at 1.2x. We expect WSP to
continue to use FCF to pay down debt while remaining
opportunistic, in line with their acquisition strategy.
Management maintains a Net Debt/EBITDA target of 1.5x-2.0x.

Poised to achieve guidance
Our 2016 numbers are supported by a solid track record of
acquisition integration, minimal exposure to O&G (~5% of total
workforce) and favourable FX positioning (<25% revenues in
CAD ~30% revenues in USD). Our 2016 revenue estimate of $5
billion is well on the way towards management’s roadmap
revenue target of $6 billion by 2018.

$51.00 target – Outperform rating
Our $51.00 target (10x 2016e EV/EBITDA) results in a 37.0%
potential upside (including the 3.9% dividend yield).
$3,768
2014a
2015e
2016e
$2,349.9
$4,451.8
$5,008.0
$253.5
$439.5
$526.2
10.8%
9.9%
10.5%
Adj. EPS (fd)
$1.83
$2.15
$2.59
P/E
21.0x
17.8x
14.8x
EV/EBITDA 1
16.8x
9.7x
8.1x
1. Using current EV.
Financial Data:

98.3
Market Capitalization (mln)(Cdn$)
Net Revenue (mln)
3.9% yield backed by robust financials
Average
Risk Rating:
(Year-End Dec 31)
NBF Dividend All-Star
As at Septem ber 30, 2015 (Q3 2015)
Net Debt (mln)
$502.4
Net Debt / EBITDA
1.2x
Dividend per Share (annualized)
$1.50
Dividend Yield
3.9%
Industry Rating: Overweight
(NBF Economics & Strategy Group)
Company Profile:
WSP is a leading engineering services firm providing private
and public-sector clients with a full range of professional
consulting services through all project phases, including
planning, design, construction and maintenance.
Leon Aghazarian, M.Sc. – (514) 879-2574
[email protected]
Associates:
Frederic Tremblay, M.Sc., CFA – (514) 412-0021
[email protected]
Connor Sedgewick - (514) 390-7825
[email protected]
Stock Performance
Page 38
DISCLOSURES:
Ratings And What They Mean: PRIMARY STOCK RATING: NBF has a three-tiered rating system that is relative to the coverage universe of the particular analyst. Here is a brief
description of each: Outperform – The stock is expected to outperform the analyst’s coverage universe over the next 12 months; Sector Perform – The stock is projected to perform in
line with the sector over the next 12 months; Underperform – The stock is expected to underperform the sector over the next 12 months. SECONDARY STOCK RATING: Under
Review − Our analyst has withdrawn the rating because of insufficient information and is awaiting more information and/or clarification; Tender − Our analyst is recommending that
investors tender to a specific offering for the company’s stock; Restricted − Because of ongoing investment banking transactions or because of other circumstances, NBF policy and/or
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against broader market averages over the next 12 months. RISK RATING: NBF utilizes a four-tiered risk rating system, Below Average, Average, Above Average and Speculative.
The system attempts to evaluate risk against the overall market. In addition to sector-specific criteria, analysts also utilize quantitative and qualitative criteria in choosing a rating. The
criteria include predictability of financial results, share price volatility, credit ratings, share liquidity and balance sheet quality.
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Page 39
Additional company related disclosures for
American Hotel Income Properties REIT LP (2,3,4,5,7)
Bank of Montreal (2,3,4,5,7)
Crombie REIT (2,3,4,5,7)
First Capital Realty (2,3,4,5,7)
Milestone Apartments REIT (2,3,4,5,7)
Pure Multi-Family REIT LP (2,3,4,5,7)
Savaria Corporation (2,3,4,5,7)
Slate Retail REIT (2,3,4,5,7)
AG Growth International Inc. (2,3,4,5,6,7)
Enbridge Income Fund Holdings (2,3,4,5,6,7)
Exchange Income Corporation (2,3,4,5,6,7)
First National Financial Corporation (2,3,4,5,6,7)
Innergex Renewable Energy Inc. (2,3,4,5,6,7)
Inter Pipeline Ltd. (2,3,4,5,6,7)
Northland Power Inc. (2,3,4,5,6,7)
Student Transportation Inc. (2,3,4,5,6,7)
Whitecap Resources Inc. (2,3,4,5,6,7)
Pembina Pipeline Corp. (2,3,4,5,7,10)
Toronto-Dominion Bank (2,3,4,5,7,10)
Boralex Inc. (2,3,4,5,6,7,10)
Cominar REIT (2,3,4,5,6,7,10)
TransAlta Renewables Inc. (2,3,4,5,6,7,10)
WSP Global Inc. (2,3,4,5,6,7,10)
Vermilion Energy Inc. (6,7,10)
Morneau Shepell Inc. (6,7,14)
Transcontinental Inc. (6,7,10,14)
Chorus Aviation Inc. (6,7)
Enbridge Inc (6,7)
Manitoba Telecom Services Inc. (6,7)
MCAN Mortgage Corporation (6,7)
Sun Life Financial (6,7)
2 National Bank Financial Inc. has acted as an underwriter with respect to this issuer within the past 12 months.
3 National Bank Financial Inc. has provided investment banking services for this issuer within the past 12 months.
4 National Bank Financial Inc. or an affiliate has managed or co-managed a public offering of securities with respect to this issuer within the past 12 months.
5 National Bank Financial Inc. or an affiliate has received compensation for investment banking services from this issuer within the past 12 months.
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7 The issuer is a client, or was a client, of National Bank Financial Inc. or an affiliate within the past 12 months.
10 National Bank Financial Inc. makes a market in the securities of this issuer, at the time of this report publication.
14 A member of the Board of Directors of National Bank Financial Inc. is also a member of the Board of Directors or is an officer of this issuer.