President Trump has invited TransCanada Corp. (TSX: TRP, NYSE: TRP) to reapply for a permit to build the U.S. leg of the Keystone XL pipeline. This permit was previously denied by former President Obama.

The company says it plans to resubmit an application. The application would then be reviewed by the U.S. State Department, which would have 60 days to reach a decision.

TransCanada has previously obtained all approvals and permits for the Canadian leg of the $8 billion pipeline. The 1,200-mile pipeline would move up to 830,000 barrels per day from Hardisty, Alberta to Steele City, Nebraska, where it would connect with a previously approved line running to the U.S. Gulf Coast.

At the end of 2015, TransCanada took a C$3.7 billion write-down after the Obama administration rejected the pipeline. The company also filed a claim against the U.S. government under the North American Free Trade Agreement, with hopes of recovering more than US$15 billion in costs and damages suffered as a result of the country’s alleged breach of obligations under the trade pact.

Keystone is a very valuable project for TransCanada. However, Trump has said he would like to renegotiate the project’s terms and conditions, which suggests that TransCanada may not see Keystone’s full potential profit. Nevertheless, this is very good news for the company.

Bad Luck, Good Luck

On Monday, we published an Alert to buy NorthWest Healthcare Properties REIT (TSX: NWH-U, OTC: NWHUF). Since then, the unit price has dropped by 3.7% following the REIT’s plans to issue 7.4 million new units in a bought deal at C$10.10 per unit, which was about 3.3% below the closing price prior to the announcement.

Although we did not enjoy this surprise, the units now offer an even more compelling value, and we have no hesitation regarding purchases at the current price. We repeat the previous Alert below in case you missed it:

Healthcare is one of the largest and fastest-growing industries worldwide. We believe that NorthWest Healthcare Properties REIT (TSX: NWH-U, OTC: NWHUF) is well positioned to benefit from this trend for decades to come.

NorthWest owns and operates medical office buildings, hospitals, clinics, and aged-care facilities in Canada, Germany, Australia, New Zealand, and Brazil.

NorthWest acquired its international operations in 2015, and the C$691 million REIT’s overseas presence gives it greater scale and better diversification.

Operating and financial metrics have been improving over the past 18 months. Meanwhile, the quality of the REIT’s portfolio has been enhanced by several acquisitions and divestitures.

Investors have started to acknowledge the improvement in the business, and the unit price is up 25% over the past year. We believe that the ongoing improvement will continue to drive the unit price even higher.

Despite recent gains, NorthWest is still undervalued compared to its global peers. The REIT’s distribution currently yields an attractive 7.7%, and there’s potential for further distribution growth in 2017. We estimate NorthWest’s fair value at C$14, or US$10.50.

A full report on NorthWest will appear in the February issue of Canadian Edge.

Canadian National Railway Co. (TSX: CNR, NYSE: CNI) reported slightly higher fourth-quarter profits, as freight volumes seem to have finally turned the corner. Earnings per share grew 4% year over year, and management boosted the company’s quarterly dividend by 10%.

Revenue increased by 2% thanks to higher carload volumes, while a 2.7% freight-rate increase helped drive profits. Commodity-related cargo volumes (i.e., coal, crude oil, and metals) declined, while grains, fertilizer, and intermodal fared better.

Operating expenses, up by 1%, were well contained, given the weak but improving operating environment. The key operating ratio (operating expenses as a portion of revenue) declined to 56.6%. At the same time, tight cost management could become a tough hurdle in future quarters as it will become increasingly difficult to reduce costs even further.

A highlight for 2016 was the record level of free cash flow. This is one of the key strengths of the business and supports ongoing share repurchases and dividend increases. The balance sheet remains in excellent condition.

Management expects to see moderate volume growth in 2017, with earnings per share rising by mid-single digits.

Although the company raised its dividend by 10%, we were somewhat disappointed since the payout ratio as a percentage of free cash flow and earnings is still quite conservative.

Over the past two months, Canadian National’s share price has moved higher as investors anticipated an improving operating environment. We see some downside risks to this optimistic outlook, including tougher winter conditions than last year, higher energy costs, and a more difficult pricing environment.

Canadian National is a high-quality operator, but the company’s valuation remains full in absolute terms, with a premium valuation compared to its North American peers. The stock yields 1.8% on a forward basis, and we estimate its fair value at C$92, or US$70.

Earnings Season Checklist

Our companies have started to announce their results for the calendar fourth quarter. While we do not have any particular insights into what the quarter will offer, we’re reasonably comfortable that our Dividend Champions will either maintain or increase their dividends.

The table below lists the date for each company’s earnings release, as well as the expected dividend. Please note that some dates have yet to be confirmed and are, therefore, based on the timing of past reports. Rows that have been highlighted green indicate companies that have already reported results.