MAPLE LEAF FOODS INC. $27

MAPLE LEAF FOODS INC. $27 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 134.6 million; Market cap: $3.6 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.3%; TSINetwork Rating: Average; www.mapleleaffoods.com) is Canada’s largest foodprocessing company. It mainly sells its products, including fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. The company will soon complete a multi-year restructuring that involves closing older meatprocessing plants and shifting their operations to newer, more efficient ones. Thanks to these new plants, Maple Leaf earned $0.58 a share in 2015 compared to its loss of $0.56 in 2014. Sales rose 4.3%, to $3.3 billion from $3.2 billion. That’s partly because the lower Canadian dollar boosted the contribution of its exports to customers in the U.S. and Japan. Without exchange rates, sales gained 2.6%. Maple Leaf’s improved earnings have also freed up cash for share repurchases: it spent $182.5 million on buybacks in 2015. As well, the company has increased its quarterly dividend by 12.5%, to $0.09 a share from $0.08. The new annual rate of $0.36 yields 1.3%. The company’s earnings will probably jump to $1.17 a share in 2016. However, the stock trades at a high 23.1 times that forecast. Maple Leaf Foods is a hold.

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