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Nutrien Ltd. offers exposure to potash and nitrogen prices, a stable retail base and strong profitability.
Toromont Industries Ltd. should see continued earnings growth thanks to its leading market share and Canada’s plan to increase spending on infrastructure projects.
Top pick Barrick Mining just raised its dividend a whopping 140% as it generates record earnings and continues its strategic asset reorganization.
Warner Music Group Corp. is well-positioned for higher-margin catalog revenues, added streaming adoption, and new AI monetization opportunities.
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The new Liberal government in Ottawa plans to spend more on roads, bridges and public transit over the next three years. SNC-Lavalin, below, is already working on big public works projects, including a transit line in Toronto and a bridge in Montreal, so it should gain from this new spending. The Liberals are also in favour of certain new pipelines, which should help ShawCor (see next article). SNC-LAVALIN GROUP INC. $42 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 149.8 million; Market cap: $6.3 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.4%; TSINetwork Rating: Average; www.snclavalin.com) is narrowing its focus to engineering projects in the oil and gas, mining and water-treatment industries....
SHAWCOR LTD. $28 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.5 million; Market cap: $1.8 billion; Price-to-sales ratio: 1.0; Dividend yield: 2.1%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and gas pipelines from rusting. It also manufactures industrial products, such as electrical wire and protective sheaths. In the three months ended September 30, 2015, ShawCor’s revenue rose 3.4%, to $485.4 million from $469.6 million a year earlier. Favourable exchange rates added $42.5 million to its revenue in the latest quarter. Earnings gained 21.3%, to $38.1 million from $31.4 million. Per-share profits rose 15.7%, to $0.59 from $0.51, on fewer shares outstanding. As of September 30, 2015, ShawCor’s backlog was $556 million. Its strong reputation should keep helping it win contracts; it has a total of $600 million worth of bids underway on new jobs....
MANITOBA TELECOM SERVICES INC. $29 (Toronto symbol MBT; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 78.9 million; Market cap: $2.3 billion; Price-to-sales ratio: 1.4; Dividend yield: 4.5%; TSINetwork Rating: Average; www.mtsallstream.com) has expanded its recent restructuring plan, under which it is cutting 25% of its Allstream subsidiary’s workforce and lowering this business’s capital spending by 20% to 30%. Allstream sells phone and Internet services to companies across Canada. Manitoba Telecom now aims to improve the performance of its MTS division, which has 1.3 million phone, wireless and TV customers in Manitoba. The company will cut jobs and capital spending at MTS and use some of the savings to improve its customer service and billing processes. Restructuring MTS should cut Manitoba Telecom’s annual costs by up to $25 million. To put that in context, it earned $26.7 million, or $0.34 a share, in the third quarter of 2015....
MAPLE LEAF FOODS INC. $21 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 136.6 million; Market cap: $2.9 billion; Price-to-sales ratio: 0.9; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) will soon complete a multi-year restructuring that mainly involves closing older meat-processing plants and shifting their operations to newer facilities. Thanks to these actions, Maple Leaf’s gross profit margin (gross profits as a percentage of revenue) jumped to 7.1% in the third quarter of 2015 from 0.5% a year earlier. However, the company has faced delays and higher-than-expected costs to start up these new plants, so it now expects to reach its goal of raising its gross profit margin to at least 10% in 2016 instead of 2015. Maple Leaf Foods is a hold.