We continue to think investors will profit most — and with the least risk — by buying shares of well-established companies with strong business prospects and strong positions in healthy industries.

(In the current issue of Canadian Wealth Advisor, our newsletter for the conservative investor, we update our buy/sell/hold advice on a well-established company that has risen over 36% for …read more »

We’ve long recommended that all Canadian investors own two or more of the country’s big five bank stocks. That’s mainly because of their importance to Canada’s economy. As well, investors continue to underestimate them. As a result, they consistently trade at below-average price-to-earnings ratios.

(In the latest issue of The Successful Investor, we’ve published a special analysis of all five of …read more »

Members of Pat McKeough’s Inner Circle enjoy a double benefit when it comes to taking advantage of our investment research. They get to address investment questions directly to me and my research associates; AND they get to see all other members’ questions, and our answers (of course, we eliminate any personal information).

Aside from specific investments (such as stocks, income …read more »

Last week, the U.S. Securities and Exchange Commission (SEC) announced that it was suing global investment bank and securities firm Goldman Sachs Group for defrauding investors.

The SEC claims that Goldman Sachs misled investors about the risks of investing in certain mortgage-backed financial products. The SEC alleges that Goldman Sachs created these products with the help of a hedge-fund manager …read more »

FORTIS INC. $28 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 170.7 million; Market cap: $4.8 billion; Price-to-sales ratio: 1.3; Dividend yield: 4.0%; SI Rating: Above Average) is the main supplier of electrical power in Newfoundland and Prince Edward Island. It also operates power plants in other parts of Canada, as well as the U.S., Belize and the …read more »

TORSTAR CORP. $11 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.0 million; Market cap: $869.0 million; Price-to-sales ratio: 0.6; Dividend yield: 3.4%; SI Rating: Above Average) at one time was, like Canadian Tire, a good example of a cyclical growth stock. For decades, ad revenue from The Toronto Star rose and fell with the economic cycle, but …read more »

MOLSON COORS CANADA INC. (Toronto symbols TPX.A $45 and TPX.B $45; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 185.5 million; Market cap: $8.3 billion; Price-to-sales ratio: 2.7; Dividend yield: 2.1%; SI Rating: Average) is the world’s fifth-largest brewer by volume. Its top brands include Coors Light, Molson Canadian and Carling.

The company gets 49% of its gross profit from Canada, followed …read more »

We’ve long recommended these 4 safe investing strategies in our newsletters and investment services. They can help you cut risk — and increase profits — in your stock portfolio.

(Our special report, “Canadian Stock Market Basics: How to Trade Stocks and Make Good Investments in Canada,” is full of safe investing strategies that you can easily put into practice right away. …read more »

BANK OF NOVA SCOTIA $50 (Toronto symbol BNS: Shares outstanding: 1.0 billion; Market cap: $51.4 billion; SI Rating: Above Average; Dividend yield: 3.9%) has reported better-than-expected earnings in the latest quarter.

In its first quarter, which ended January 31, 2010, the bank earned $988 million. That’s up 17.3% from $842 million a year earlier. Earnings per share rose 13.8%, to $0.91 …read more »

Some U.S. bank stocks have reported improved profits lately. And many banks have repaid some or all of the loans they received under the U.S. government’s Troubled Asset Relief Program (TARP) in 2008. That frees these bank stocks from government control, and improves their long-term prospects.

However, the U.S. banking sector remains highly volatile. As well, the industry could face greater …read more »

H&R BLOCK INC. $17 (New York symbol HRB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 329.2 million; Market cap: $5.6 billion; Price-to-sales ratio: 1.4; Dividend yield: 3.5%; WSSF Rating: Above Average) is the world’s largest provider of income-tax-preparation services. It also provides accounting services to businesses, as well as banking services to consumers.

The slow economy and high unemployment are …read more »

AMERICAN EXPRESS CO. $41 (New York symbol AXP; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $49.2 billion; Price-to-sales ratio: 1.9; Dividend yield: 1.8%; WSSF Rating: Average) gets most of its revenue from the the fees it charges merchants when consumers use its credit and charge cards. It also provides travel-agency services.

American Express set aside $5.3 billion …read more »

BECKMAN COULTER INC. $64 (New York symbol BEC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 69.9 million; Market cap: $4.5 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.1%; WSSF Rating: Average) makes lab equipment that doctors and medical researchers use to detect substances in bodily fluids.

Under Obamacare, Beckman and other medical-device makers will have to pay new fees, which …read more »

PEPSICO INC. $66 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.6 billion; Market cap: $105.6 billion; Price-to-sales ratio: 2.4; Dividend yield: 2.7%; WSSF Rating: Above Average) is developing a new type of salt that contains less sodium than regular salt. That will help it achieve its goal of cutting the sodium in its potato chips by …read more »

STANLEY BLACK & DECKER INC. $59 (New York symbol SWK; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 159.4 million; Market cap: $9.4 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.2%; WSSF Rating: Average) is the new name of The Stanley Works after the company recently completed its all-stock purchase of rival toolmaker Black & Decker Corp. Stanley shareholders own …read more »

BRIGGS & STRATTON CORP. $20 and other lawn-mower engine makers have agreed to settle over 65 class-action lawsuits that accused the companies of using misleading labels on their engines. The settlement will cut Briggs’ after-tax earnings by $19 million. That’s over half of the $35.5 million, or $0.71 a share, that it earned in the year ended June 30, 2009. …read more »

Whether you’re an aggressive or conservative investor, we continue to recommend that you cut your investment risk by spreading your money out across the five main economic sectors (Manufacturing & Industry; Resources; Consumer; Finance; and Utilities).

Generally speaking, stocks in the Resources and Manufacturing & Industry sectors expose you to above-average volatility, and stocks in the Utilities and Canadian Finance …read more »

FINNING INTERNATIONAL INC. $18 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 170.9 million; Market cap: $3.1 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.4%; SI Rating: Above Average) sells, rents and repairs tractors, bulldozers, trucks and other heavy equipment made by Caterpillar Inc. Finning’s major customers are mainly in the western Canadian mining, forest-products and construction …read more »

TRANSCANADA CORP. $36 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 684.4 million; Market cap: $24.6 billion; Price-to-sales ratio: 2.6; Dividend yield: 4.4%; SI Rating: Above Average) operates a 60,000-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. The company’s pipelines supply 20% of North America’s natural gas. In 2009, TransCanada’s pipelines …read more »

ENCANA CORP. $35 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 751.3 million; Market cap: $26.3 billion; Price-to-sales ratio: 2.3; Dividend yield: 2.3%; SI Rating: Average) focuses on developing unconventional natural-gas properties. The company has several landholdings in the Horn River Basin in northeastern B.C. Early drilling indicates that this area contains large amounts of shale gas, which …read more »

TORONTO-DOMINION BANK $71 earned $1.4 billion in its first quarter, which ended January 31, 2010. That’s up 31.2% from $1.1 billion a year earlier. Earnings per share rose 26.0%, to $1.60 from $1.27, on more shares outstanding. Thanks to the improving economy, TD set less money aside to cover bad loans. Its loan-loss provisions fell 17.9%, to $517 million from …read more »

Exchange-traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees, or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds.

ETFs trade on stock exchanges, just like …read more »

GREAT-WEST LIFECO $27 (Toronto symbol GWO; Shares outstanding: 945.3 million; Market cap: $25.5 billion; SI Rating: Above Average; Dividend yield: 4.6%) is Canada’s largest insurance company, with $458.6 billion in assets under administration. The company also operates in the U.S. and Europe.

Aside from insurance, Great-West sells wealth management and other financial services.

In the three months ended December 31, 2009, Great-West’s …read more »

ABB LTD. ADRs $20 (New York symbol ABB; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 2.3 billion; Market cap: $46.0 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.4%; WSSF Rating: Above Average) makes transformers, transmission switches and other equipment for distributing electricity. ABB is based in Switzerland.

In 2009, ABB’s earnings fell 7.0%, to $2.9 billion, or $1.27 per ADR, …read more »

MANITOBA TELECOM SERVICES INC. $31 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 64.7 million; Market cap: $2.0 billion; Price-to-sales ratio: 1.7; Dividend yield: 8.4%; SI Rating: Average) is the main provider of telephone services in Manitoba. The company’s Allstream subsidiary sells integrated telephone, Internet and other communication services to businesses across Canada. The company gets 70% of …read more »

BCE INC. $29 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 767.2 million; Market cap: $22.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 6.0%; SI Rating: Above Average) provides telephone and Internet services in Ontario and Quebec. It also sells wireless and satellite TV services across Canada.

BCE is starting to see the benefits of a restructuring plan that it …read more »

CANADA BREAD CO. LTD. $52 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 0.5%; SI Rating: Above Average) is Canada’s second-largest maker of baked goods after Weston Bakery. The company also makes specialty pastas and sauces. Its main brands include Dempster, Tenderflake and Olivieri.

Like Maple Leaf, Canada …read more »

MANITOBA TELECOM SERVICES $32.93 (Toronto symbol MBT; Shares outstanding: 64.7 million; Market cap: $2.1 billion; SI Rating: Average) is the main provider of telecommunication services in Manitoba.

Customers are buying fewer long-distance and traditional phone services from Manitoba Tel due to the weak economy and growing competition. However, demand remains strong for wireless and high-speed Internet services.

Manitoba Tel is building a …read more »

CANADIAN PACIFIC RAILWAY LTD. $51.38 (Toronto symbol CP; Shares outstanding: 168.5 million; Market cap: $8.7 billion; SI Rating: Average; Dividend yield: 1.9%) reports that its 2009 earnings fell 25.7%, to $460.3 million from $619.7 million in the prior year, mainly due to the recession. Earnings per share fell 30.8%, to $2.76 from $3.99, on more shares outstanding.

These figures exclude gains …read more »

CAMPBELL SOUP CO. $33 (New York symbol CPB; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 342.9 million; Market cap: $11.3 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.3%; WSSF Rating: Above Average) is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices.

Like Heinz, Campbell aims to spur long-term …read more »

H.J. HEINZ CO. $44 (New York symbol HNZ; Income Portfolio, Consumer sector; Shares outstanding: 315.6 million; Market cap: $13.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 3.8%; WSSF Rating: Above Average) is a leading maker of condiments. Its flagship product, Heinz ketchup, accounts for about 60% of U.S. ketchup sales. The company also makes frozen potatoes (under the Ore-Ida brand), pasta …read more »

GENERAL MILLS INC. $72 (New York symbol GIS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 329.5 million; Market cap: $23.7 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.7%; WSSF Rating: Above Average) is the second-largest maker of breakfast cereals in the U.S., after Kellogg. The company’s major brands include Cheerios, Wheaties and Total. General Mills also makes Betty Crocker baking mixes, …read more »

KRAFT FOODS INC. $28 (New York symbol KFT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.5 billion; Market cap: $42.0 billion; Price-to-sales ratio: 1.0; Dividend yield: 4.1%; WSSF Rating: Above Average) is the world’s second-largest food company after Switzerland-based Nestle S.A. Its leading brands include Kraft cheese, Maxwell House coffee, Nabisco cookies and Oscar Meyer meats.

Kraft is buying U.K.-based Cadbury …read more »

MCCORMICK & CO. INC. $38 (New York symbol MKC; Income Portfolio, Consumer sector; Shares outstanding: 130.9 million; Market cap: $5.0 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.7%; WSSF Rating: Average) is the world’s leading maker of spices, herbs, seasonings, flavourings, sauces and extracts. It sells its products to consumers, restaurants and industrial food processors. Its top brands include McCormick, Club …read more »

CONAGRA FOODS INC. $23 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 443.4 million; Market cap: $10.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.5%; WSSF Rating: Above Average) makes a wide variety of packaged foods, including Chef Boyardee canned pasta, Hunt’s tomato sauce, Peter Pan peanut butter and Orville Redenbacher popcorn.

The company gets 64% of its revenue by …read more »

DEL MONTE FOODS CO. $12 (New York symbol DLM, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 198.2 million; Market cap: $2.4 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.7%; WSSF Rating: Average) makes canned fruits, vegetables, sauces and soups. The company also makes Meow Mix, 9Lives and Milk-Bone brand pet foods.

The company earned $62.6 million in its second quarter, which ended …read more »

Food processors like the seven companies we analyze below add stability to any portfolio. That’s because they’ve built brands that have strong customer loyalty and produce steady, predictable revenue streams. These seven firms’ strong brands are also helping them expand in developing markets, such as Asia and Latin America.

These seven stocks trade at reasonable multiples to earnings, and have long …read more »

DUN & BRADSTREET CORP. $80 (New York symbol DNB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 52.0 million; Market cap: $4.2 billion; Price-to-sales ratio: 2.5; Dividend yield: 1.7%; WSSF Rating: Average) is the world’s largest provider of credit reports on individual companies. Its database contains information on 150 million businesses in over 200 countries. Companies use these reports to make …read more »

IGM FINANCIAL INC. $42 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 263.9 million; Market cap: $11.1 billion; Price-to-sales ratio: 4.7; Dividend yield: 4.9%; SI Rating: Above Average) reported that as of December 31, 2009, its assets under management had risen 1.8%, to $120.5 billion from $118.4 billion at November 30, 2009.

IGM’s clients redeemed $25.5 million worth of …read more »

MOLSON COORS CANADA INC. (Toronto symbols TPX.A $47 and TPX.B $47; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 185 million; Market cap: $8.7 billion; Price-to-sales ratio: 2.9; Dividend yield: 2.1%; SI Rating: Average) is the world’s fifth-largest brewer by volume. Its major brands include Coors Light, Molson Canadian and Carling. The company gets 40% of its sales from Canada, followed …read more »

Canada’s telephone companies continue to face rising competition. Along with wireless and cable companies, Internet-based phone services, such as Skype, have also gained in popularity.

Now, three new wireless providers (Globalive’s WIND Mobile, DAVE Wireless, and Public Mobile) are set to enter the Canadian market.

This new competition will put pressure on BCE Inc. (symbol BCE on Toronto), Canada’s largest telephone …read more »

LOBLAW COS. $33.46 (Toronto symbol L; Shares outstanding: 276.6 million; Market cap: $9.3 billion; SI Rating: Above Average; Dividend yield 2.5%) bought Toronto’s old Maple Leaf Gardens hockey arena for $13 million in 2004.

The company now aims to reopen the facility in 2011 under a new deal with nearby Ryerson University. Loblaw will build a new supermarket and a Joe …read more »

CANADIAN PACIFIC RAILWAY LTD. $56.14 (Toronto symbol CP; Shares outstanding: 168.3 million; Market cap: $9.4 billion; SI Rating: Average; Dividend yield: 1.8%) is contributing $500 million to its employee defined-benefit pension plan. The company hopes the voluntary payment to the plan will make its future pension obligations easier to manage.

As of September 30, 2009, CP held cash of $615.9 million, …read more »

Grocery retailer Metro Inc. (symbol MRU.A on Toronto) is a good example of a stock that has graduated from Stock Pickers Digest, our newsletter for aggressive investors, to The Successful Investor, which focuses on more conservative selections.

Stock Pickers Digest is where we analyze stocks that are attractive but not yet suitable for The Successful Investor’s conservative investing focus. Ideally, …read more »

SNAP-ON INC. $40 (New York symbol SNA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 57.7 million; Market cap: $2.3 billion; Price-to-sales ratio: 1.0; Dividend yield: 3.0%; WSSF Rating: Average) makes hand and power tools for auto mechanics. It sells these through franchised vans that visit garages. This lets it build closer relationships with customers, which gives it an …read more »

BRIGGS & STRATTON CORP. $19 (New York symbol BGG; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 50.0 million; Market cap: $950.0 million; Price-to-sales ratio: 0.5; Dividend yield: 2.3%; WSSF Rating: Above Average) gets 60% of its revenue from making lawn-mower engines. (The company is the world’s largest lawn-mower engine maker.) The remaining 40% comes from other home and …read more »

PROCTER & GAMBLE CO. $62 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.9 billion; Market cap: $179.8 billion; Price-to-sales ratio: 2.5; Dividend yield: 2.8%; WSSF Rating: Above Average) is buying the Ambi Pur air freshener business from SARA LEE INC. $12 (New York symbol SLE; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 697.3 million; Market cap: …read more »

ENCANA CORP. $31 and CENOVUS ENERGY INC. $26 are now trading as separate stocks after EnCana split itself into two companies. One kept the EnCana name, and focuses on unconventional natural gas. The other operates as Cenovus Energy and specializes in oil-sands projects. Shareholders received one share in each of the two new firms for every EnCana share they owned. …read more »

TORSTAR CORP. $6.25 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.0 million; Market cap: $493.8 million; Price-to-sales ratio: 0.4; Dividend yield: 5.2%; SI Rating: Above Average) publishes The Toronto Star, which is Canada’s largest daily newspaper in terms of circulation. The company also publishes three other daily papers and over 100 weeklies, mainly in southern Ontario. Newspapers …read more »

THOMSON REUTERS CORP. $34 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 829.7 million; Market cap: $28.2 billion; Price-to-sales ratio: 2.0; Dividend yield: 3.5%; SI Rating: Above Average) has two main divisions: Markets accounts for 60% of revenue, and sells financial-information products to banks and other financial institutions. Professional (40% of revenue) sells specialized information to professionals in …read more »