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Bombardier makes most of its money from its airplane operations. This is a highly cyclical industry, and the recession has hurt demand for new planes. That’s mainly why Bombardier’s shares are down over 50% from last June’s peak of around $9.
However, Bombardier’s passenger-railcar business, while not as profitable, adds stability. The long-term outlook for this division remains bright, particularly as …read more »
BOMBARDIER INC. (Toronto symbols BBD.A $3.78 and BBD.B $3.65, Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $6.4 billion; Price-to-sales ratio: 0.3; SI Rating: Extra Risk) is the world’s third-largest maker of commercial aircraft, after Boeing and Airbus. Bombardier’s aerospace division supplies about half of its revenue and two-thirds of its profits.
The remaining revenue and …read more »
Investor response to bad economic news often seems like an allergic reaction to a bee sting. Many investors take each new tidbit of economic news as the sure sign of an ominous new trend. But in fact, there’s a large random element in the economic news.
Economic statistics vary between one reporting period and the next, due to a variety of …read more »
CANADIAN UTILITIES LTD. (Toronto symbols CU $35 (class A non-voting) and CU.X $35 (class B voting); Income Portfolio, Utilities sector; Shares outstanding: 125.6 million; Market cap: $4.4 billion; Price-to-sales ratio: 1.6; SI Rating: Above Average) distributes electricity and natural gas in Alberta. It also operates power plants in other parts of Canada, the U.K. and Australia. ATCO Ltd. (Toronto symbols …read more »
With bonds yielding just 2% to 3%, we believe that income-seeking investors are better off sticking with high-quality utility stocks, such as these four electricity generators. All have consistently posted strong earnings, and have long histories of raising their dividends. Unlike bond-interest payments, which are taxed as regular income, their dividends qualify for the dividend tax credit. They also have …read more »
TRANSALTA CORP. $20 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 197.8 million; Market cap: $4 billion; Price-to-sales ratio: 1.3; SI Rating: Average) operates over 50 electrical-power plants in Canada, the United States and Australia.
TransAlta uses coal to generate 60% of its electricity, and owns three coal mines (two in Alberta and one in Washington State). This helps …read more »
FORTIS INC. $23 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 169.8 million; Market cap: $3.9 billion; Price-to-sales ratio: 0.9; SI Rating: Above Average) generates and distributes electricity in five Canadian provinces. It also owns power plants in the U.S. and Caribbean, as well as hotels and commercial real estate in Atlantic Canada.
Fortis is still benefiting from its …read more »
EMERA INC. $20 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 112.3 million; Market cap: $2.2 billion; Price-to-sales ratio: 1.7; SI Rating: Average) generates and distributes electricity to roughly 600,000 customers in Nova Scotia and Bangor, Maine.
Over the past few years, Emera has steadily expanded into new areas in order to cut its reliance on Nova Scotia, which still …read more »
TRANSCANADA CORP. $30 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 619 million; Market cap: $18.6 billion; Price-to-sales ratio: 2.0; SI Rating: Above Average) has won a $320-million U.S. contract to build, own and operate a 310-kilometre natural-gas pipeline in Mexico. (It already owns a 130-kilometre gas pipeline in the country.) To put this in context, TransCanada earned …read more »
AGRIUM INC. $52 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 157 million; Market cap: $8.2 billion; Price-to-sales ratio: 0.8; SI Rating: Average) makes fertilizers from natural gas, mainly at five facilities in North America. It also owns 50% of a plant in Argentina. This business supplies 45% of its revenue, but 70% of its earnings.
Most of Agrium’s …read more »
