Search

AT&T INC. $36 (New York symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 5.2 billion; Market cap: $187.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 5.2%; TSINetwork Rating: Average; www.att.com) is the largest wireless provider in the U.S., with 121.8 million subscribers. Wireless supplies 55% of its revenue and 75% of its earnings.

The remaining 45% of revenue and 25% of earnings comes from the company’s wireline division, which sells phone services, television packages and highspeed Internet access to 34.2 million customers.

AT&T’s revenue rose 6.5%, from $124.4 billion in 2010 to $132.4 billion in 2014. Earnings fell 3.9%, from $2.29 a share (or a total of $13.6 billion) in 2010 to $2.20 a share (or $13.1 billion) in 2011, but they recovered to $2.33 a share (or $13.7 billion) in 2012.

...

VERIZON COMMUNICATIONS INC. $47 (New York symbol VZ, Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 4.1 billion; Market cap: $192.7 billion; Priceto- sales ratio: 1.5; Dividend yield: 4.7%; TSINetwork Rating: Average; www.verizon.com) gets 70% of its revenue and 95% of earnings from its 108.6 million wireless subscribers. The other 30% of revenue and 5% of earnings comes from its wireline business, which serves 19.5 million traditional phone customers and 26.4 million high-speed Internet and digital TV users. In 2014, the company bought the 45% of the Verizon Wireless joint venture it didn’t already own from U.K.-based Vodafone Group (Nasdaq symbol VOD). Verizon Wireless sells wireless services in the U.S.

Verizon paid $130 billion for Vodafone’s stake, including $58.9 billion in cash. It also issued $61.3 billion worth of common shares to Vodafone shareholders and borrowed most of the remaining $9.8 billion.

The Vodafone stake, along with strong wireless demand, boosted the company’s revenue by 19.3%, from $106.6 billion in 2010 to $127.1 billion in 2014. Earnings fell from $0.90 a share (or a total of $2.5 billion) in 2010 to $0.31 a share (or $875 million) in 2012, mainly due to a $7.2-billion charge related to a change in its pension plan accounting policies. Earnings jumped to $4.00 a share (or $11.5 billion) in 2013 but fell to $2.42 a share (or $9.6 billion) in 2014 as the Verizon Wireless purchase added more one-time charges and other operating costs.

...

Our portfolio advice: when you find the best stocks to invest in, and the shares begin to rise, avoid the temptation to sell them too soon.

With $44 billion earmarked for new projects, Enbridge builds up its cash flow and keeps our rating as one of Canada’s best dividend stocks.

We think the big banks remain some of the strongest Canadian dividend stocks, but warn against buying them through this split share company.

Starbucks is opening 1,650 new shops in 2015 and has strong growth overseas—our take on whether that makes it a good stock investment

Production problems solved, the 787 Dreamliner has over 1,000 sales, and that keeps Boeing high on our list of blue chips stocks.

DREAM OFFICE REIT $25.34 (Toronto symbol D.UN; TSINetwork Rating: Extra Risk) (416-365-3535; www.dream.ca/office; Units outstanding: 108.4 million; Market cap: $2.9 billion; Dividend yield: 8.8%) (formerly Dundee REIT) owns and manages 176 properties comprising 24.1 million square feet of office space in major cities across Canada.

In Western Canada, the trust has 16% of its total square footage in Calgary and 20% elsewhere. In Eastern Canada, it holds 23% of its square footage in downtown Toronto, 17% in suburban Toronto and 24% elsewhere. Its occupancy rate is 92.8%.

In the three months ended March 31, 2015, Dream Office’s revenue fell 1.6%, to $205.2 million from $208.4 million a year earlier. The trust sold four properties to Dream Industrial REIT (symbol DIR.UN on Toronto) for $33.0 million in September 2014. Dream Office owns 24.2% of Dream Industrial.

...

CHEMTRADE LOGISTICS INCOME FUND $19.98 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics .com; Units outstanding: 68.6 million; Market cap: $1.4 billion; Dividend yield: 6.0%) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base metal processors, whose operations create sulphur, acid and other by-products. Chemtrade converts these substances into useful chemicals, like sulphuric acid.

In the three months ended March 31, 2015, the company’s revenue rose 22.5%, to $326.0 million from $266.1 million a year earlier.

Big acquisition working out well

...

FIRSTSERVICE CORP. $30.49 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 34.6 million; Market cap: $1.1 billion; Dividend yield: 0.6%) has completed the spinoff of its Colliers International subsidiary after handing out Colliers shares to its investors.

The new FirstService began trading on Tuesday, June 2, 2015, retaining its FSV stock symbol. Colliers International Group, $47.01, symbol CIG on Toronto, began trading on the same day under its new symbol. Shareholders won’t pay capital gains taxes on the transaction until they sell their FirstService or Colliers shares.

Colliers is one of the world’s top three commercial real estate firms, offering a range of services in the U.S., Canada, Europe, Australia, New Zealand, Asia and Latin America. In 2014, it had $1.7 billion U.S. of revenue.

...

WYNDHAM WORLDWIDE $84.04 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 120.0 million; Market cap: $10.1 billion; Dividend yield: 2.0%) is one of the world’s largest hospitality companies, with 7,670 franchised hotels worldwide.

In addition to hotels, Wyndham manages vacation resorts, rental properties, luxury clubs and time-shares.

The company has just bought Vacation Palm Springs, which manages more than 450 upscale vacation properties, for an undisclosed amount. This is Wyndham’s first acquisition in California.

...

RUSSEL METALS $23.29 (Toronto symbol RUS; TSINetwork Rating: Speculative)(905-819-7777; www.russelmetals.com; Shares outstanding: 61.7 million; Market cap: $1.4 billion; Dividend yield: 6.5%) has completed its acquisition of Western Fiberglass Pipe Sales for an undisclosed amount.

Western Fiberglass is a leading distributor of fibreglass pipe for the oil and gas industry. It serves Western Canada through offices in Estevan, Saskatchewan, and Red Deer, Alberta.

The acquisition will add just $30 million to Russel’s annual revenue of $3.9 billion. However, it lets it offer oil and gas customers fibreglass pipe as an alternative to steel. The company feels this could help them save on installation costs and maintenance while improving flow capacity and increasing service life.

...

AGT FOOD & INGREDIENTS $32.17 (Toronto symbol AGT; TSINetwork Rating: Extra Risk) (306-525- 4490; www.alliancegrain.com; Shares outstanding: 23.1 million; Market cap: $755.8 million; Dividend yield: 1.9%) has bought the assets of West Central Road & Rail for $22 million. The acquisition includes five bulk-loading sites in Saskatchewan.

Purchases like this are important because they help ensure that AGT can supply its manufacturing plants and continue its growth.

AGT Food & Ingredients is still a buy.

...

RESTAURANT BRANDS INTERNATIONAL $37.46 (New York symbol QSR; TSINetwork Rating: Average) (905-845-6511; www.rbi.com; Shares outstanding: 467.0 million; Market cap: $17.5 billion; Dividend yield: 1.0%) has joined McDonald’s and KFC in bringing back old mascots.

The company’s Burger King chain is now using its big-headed “King” mascot in its advertising for the first time since 2011. The move follows KFC’s reintroduction of Colonel Sanders after a 21-year absence, while McDonald’s brought back the Hamburglar after more than a decade.

Burger King recently paid $200,000 to have the King appear live on TV at the Belmont Stakes horse race. In May, the company reportedly paid $1 million to have the King included in Floyd Mayweather’s entourage during his Las Vegas boxing match.

...

CHIPOTLE MEXICAN GRILL $606.84 (New York symbol CMG; TSINetwork Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 31.0 million; Market cap: $18.7 billion; No dividends paid) is a Denver- based Mexican restaurant chain. It charges slightly higher prices than fast food companies, but it offers better quality food, including naturally raised meat, and superior decor and service.

In the three months ended March 31, 2015, Chipotle’s sales jumped 20.4%, to $1.09 billion from $904.2 million a year earlier. Its restaurants attracted more customers during the quarter, which pushed up same-restaurant sales by 10.4%.

Chipotle opened 49 new outlets and now has a total of 1,831. It plans to add 140 to 155 more in 2015. Earnings gained 47.6%, to $122.6 million, or $3.95 a share, from $83.1 million, or $2.67. That’s partly because it raised the prices of some menu items last year, offsetting higher costs for beef and tortillas. The company is a well-established chain with a growing following, especially among health conscious, environmentally aware consumers.

...

DOMINO’S PIZZA $110.92 (New York symbol DPZ; TSINetwork Rating: Average)(734-930-3008; www.dominos.com; Shares outstanding: 55.2 million; Market cap: $6.1 billion; Dividend yield: 1.1%) is the world’s largest chain of pizza stores that offer takeout and delivery. It operates 11,700 outlets in the U.S. and 75 other countries. Franchisees run most of these stores.

In the three months ended March 22, 2015, the company’s earnings per share jumped 19.1%, to $0.81 from $0.68 a year earlier.

Sales gained 10.6%, to $502.0 million from $453.9 million. Same-store sales rose 7.8% internationally— but more important, they rose 14.5% in the U.S., home to most of the company’s stores.

...

AIMIA INC. $14.01 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-897-6800; www.aimia.com; Shares outstanding: 164.7 million; Market cap: $2.3 billion; Dividend yield: 5.4%) owns and operates Aeroplan, Canada’s largest loyalty program.

The company reports that its revenue rose 8.4% in the three months ended March 31, 2015, to $660.1 million from $608.9 million a year earlier.

Earnings fell to $30.7 million, or $0.15 a share, from $88.2 million, or $0.48. However, the year-ago quarter included a one-time payment of $73.4 million after TD Bank replaced CIBC as Aeroplan’s main credit card issuer on January 1, 2014.

...

REITMANS (CANADA) LTD. $6.31 (Toronto symbol RET.A; TSINetwork Rating: Extra Risk) (514-384- 1140; www.reitmans.com; Shares outstanding: 64.6 million; Market cap: $398.9 million; Dividend yield: 3.2%) owns 810 women’s clothing stores across Canada.

The chain consists of 337 Reitmans stores, 138 Penningtons, 107 Addition Elle, 78 RW & Co., 68 Thyme Maternity and 82 Smart Set. It also has 21 Thyme Maternity boutiques in Canadian Babies “R” Us stores.

In the three months ended May 2, 2015, Reitmans’ sales fell 2.3%, to $201.7 million from $206.5 million a year earlier. Sales declined because the company closed 52 less profitable stores. Same-store sales gained 3.0%.

...

LEON’S FURNITURE LTD. $15.18 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding: 71.1 million; Market cap: $1.1 billion; Dividend yield: 2.6%) has steadily opened new stores, growing from 27 in 2003 to 80 today.

However, the company more than quadrupled in size overnight with its March 2013 purchase of its main rival, The Brick, for $700 million. The Brick has 220 locations across Canada; the chains continue to operate separately.

In the three months ended March 31, 2015, the company’s sales fell slightly, to $423.0 million from $426.0 million a year earlier. On a same-store basis, sales declined 0.1%.

...

We made MITEL NETWORKS $11.29 (Toronto symbol MNW; TSINetwork Rating: Extra Risk) (613-592-2122; www.mitel.ca; Shares outstanding: 120.0 million; Market cap: $1.4 billion; No dividends paid) a buy in our June 2014 issue at $12.03 after it took over Aastra Technologies, a Stock Picker Digest recommendation, at a big premium....

COMPUTER MODELLING GROUP $12.85 (see at left) is up over 500% for us since we first recommended it in our April 2003 issue at $2.10. We think it still has gains ahead. Computer Modelling is a buy.

PASON SYSTEMS $22.24 (Toronto symbol PSI; TSINetwork Rating: Speculative)(403-301-3400; www.pason.com; Shares outstanding: 83.6 million; Market cap: $1.9 billion; Dividend yield: 3.1%) rents equipment for monitoring and managing land-based oil rigs. It also provides communication systems clients use to remotely collect data from their drilling operations. Pason serves oil and gas firms and drilling contractors throughout Canada, the U.S., Mexico and Argentina.

In the three months ended March 31, 2015, the company’s revenue fell 19.3%, to $99.4 million from $123.2 million a year earlier. A rise in the U.S. dollar only partly offset an industry-wide slowdown in oil and gas drilling.

The company earned $14.2 million, or $0.17 a share, in the latest quarter, down from $20.8 million, or $0.25 a year earlier. The lower revenue was the main reason for the decline. Cash flow per share fell 23.5%, to $0.52 from $0.68.

...

COMPUTER MODELLING GROUP $12.85 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgl.ca; Shares outstanding: 78.5 million; Market cap: $1.0 billion; Dividend yield: 3.1%) sells software and services that help conventional oil and gas producers create 3-D models of reservoirs. That lets them squeeze more out of those reservoirs using advanced recovery techniques, such as injecting steam or chemicals. Typically, only 25% to 30% of oil and gas is recovered during primary production.

Unconventional producers using hydraulic fracturing, or fracking, of oil and gas-bearing shale can also use Computer Modelling’s software to determine optimal drilling locations and depths.

In the three months ended March 31, 2015, the company’s revenue rose 2.0%, to $20.4 million from $20.0 million a year earlier. Software licensing revenue (89% of the total) rose 2.8%, and consulting and professional services revenue (11%) gained 9.6%.

...

SIERRA WIRELESS $34.10 (Toronto symbol SW; TSINetwork Rating: Extra Risk) (604- 231-1100; www.sierrawireless.com; Shares outstanding: 32.1 million; Market cap: $1.1 billion; No dividends paid) has entered into a new partnership with France’s PSA Peugeot Citroën.

The carmaker has been a Sierra client since 2001 and has connected more than 1.6 million of its vehicles with the company’s emergency notification system modules.

Now the automaker will use Sierra’s Air- Vantage device-to-cloud technology to add other connected services. The companies didn’t provide specifics, but these new functions could include apps that sync with smartphones and display information about a car’s performance and mileage.

...

ACI WORLDWIDE $25.19 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative)(402-390-7600; www.tsainc.com; Shares outstanding: 116.7 million; Market cap: $3.0 billion; No dividends paid) makes software for processing transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. The company’s products also help cut fraud. Clients include leading global retailers, plus two-thirds of the world’s 100 largest banks.

ACI has made a series of acquisitions in recent years. In November 2013, it paid $109 million for Official Payments Holdings, which processes 20 million payments totalling over $9 billion a year. It also added Retail Decisions (ReD) for $205 million in August 2014. ReD is an e-commerce and fraud-prevention firm whose software serves the payments industry.

In the three months ended March 31, 2015, the company’s revenue rose 5.1% to $232.8 million from $221.5 million a year earlier. ACI typically has higher sales and profits in the last half of each year, which is the busiest period in its customers’ purchasing cycle.

...