TIM HORTONS INC. $50 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 154.9 million; Market cap: $7.7 billion; Price-to-sales ratio: 2.6; Dividend yield: 1.7%; TSINetwork Rating: Average; www.timhortons.com) aims to take advantage of fastgrowing interest in home coffee systems.
Under a new agreement, Kraft Foods Inc. (Nasdaq symbol KFT) and Tim Hortons will make and sell plastic cups, called T-Discs, filled with Tim Hortons coffee and sealed with a foil top. Kraft’s Tassimo beverage machine pierces the foil and brews a fresh single cup. The Tassimo system also scans a barcode on the T-Disc that tells it how much water to use, how long to brew the coffee and how hot it should be.
Tim Hortons plans to start selling T-Discs online and in its 3,000 Canadian outlets in October 2012.
Tim Hortons is a buy.