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ISHARES CDN REIT SECTOR INDEX FUND $16.48 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 15 Canadian real estate investment trusts in the S&P/TSX Capped REIT Index. The weight of each REIT is limited to 25% of the ETF’s value.

iShares CDN REIT’s expenses are 0.60% of its assets. The fund yields 4.9%.

The ETF’s largest holding is RioCan REIT at 19.9%, followed by H&R REIT (15.1%), Canadian REIT (7.5%), Dream Office REIT (7.2%), Calloway REIT (6.6%), Canadian Apartment REIT (6.0%), Boardwalk REIT (6.0%), Allied Properties REIT (5.8%), Cominar REIT (5.3%), Artis REIT (4.8%), Chartwell REIT (4.5%), Granite REIT (4.5%), Crombie REIT (2.3%), Dream Global REIT (2.2%) and Northern Property REIT (2.1%).

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H&R REIT $23.38 (Toronto symbol HR.UN; Units outstanding: 271.4 million; Market cap: $6.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.8%; www.hr-reit.com) owns stakes in 41 office buildings, 112 industrial properties and 168 shopping malls across Canada. The trust has a 97.9% occupancy rate.

In March 2013, H&R finished building the Bow, a $1.33-billion, two-million-square-foot office complex in Calgary. Encana Corp. has leased the entire building for 25 years.

In April 2013, H&R completed the purchase of 27 properties from Primaris REIT for $3.1 billion. These assets include the 567,000-square-foot Dufferin Mall in Toronto’s west end.

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RIOCAN REAL ESTATE INVESTMENT TRUST $27.64 (Toronto symbol REI.UN; Units outstanding: 304.4 million; Market cap: $8.4 billion; TSINetwork Rating: Average; Dividend yield: 5.1%; www.riocan.com) is Canada’s largest real estate
investment trust (REIT), with interests in 340 shopping malls containing over 82 million square feet of leasable area. That total includes 47 U.S. malls with over 13 million square feet.

In the three months ended March 31, 2014, RioCan’s revenue increased 6.4%, to $299 million from $281 million a year earlier. Cash flow per unit rose 2.4%, to $0.42 from $0.41, on more units outstanding.

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TORSTAR $7.86 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $629.2 million; TSINetwork Rating: Average; Dividend yield: 6.7%; www.torstar.com) is up over 20% since early May, when it agreed to sell its Harlequin book-publishing subsidiary to News Corporation (symbol NWSA on New York), the parent company of publishing firm HarperCollins.

We’ve long pointed out that Torstar had a great hidden asset in Harlequin, especially in light of the romance publisher’s successful expansion into e-books.

In 2013, Harlequin supplied 29% of Torstar’s revenue and 32% of its earnings. The company will get $455 million from the sale, which should close by September 30, 2014.

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TELUS $42.29 (Toronto symbol T; Shares outstanding: 619.0 million; Market cap: $26.0 billion; TSINetwork Rating: Above Average; Dividend yield: 3.6%; www.telus.com) gets 55% of its revenue from its 7.8 million wireless subscribers across Canada. It also has 3.3 million phone customers, 1.4 million high-speed Internet users and 815,000 TV subscribers.

In the three months ended March 31, 2014, Telus’s earnings per share rose 8.9%, to $0.61 from $0.56 a year earlier. Revenue increased 5.0%, to $2.90 billion from $2.76 billion.

Wireless revenue rose 5.6%, thanks to new wireless subscribers and rising use of smartphones, which generate higher fees than regular cellphones. Revenue gained 4.4% in the the wireline (land line) division, where an increase in Telus TV and high-speed Internet subscribers more than offset customers cancelling land lines and switching to wireless devices.

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AGRIUM INC. (Toronto symbol AGU; www.agrium.com) continues to benefit from its plan to expand its retail operations, which sell seed, fertilizer and other products to farmers. Steady sales from the company’s stores help offset its exposure to volatile fertilizer prices. Agrium’s 1,400 outlets in North America, South America and Australia now supply 75% of its sales and 40% of its earnings. The remaining 25% of sales and 60% of earnings mainly comes from making fertilizers from natural gas. Agrium also operates potash and phosphate fertilizer mines. Sales jumped 82.8%, from $9.1 billion in 2009 to $16.7 billion in 2012 (all amounts except share price and market cap in U.S. dollars), thanks to rising fertilizer prices and acquisitions of retail stores, particularly in Australia. However, lower fertilizer prices cut its 2013 sales to $15.7 billion. Earnings were $7.31 a share (or $1.1 billion) in 2013....

MAPLE LEAF FOODS INC. $19 (www.mapleleaffoods.com) owned 90.0% of Canada Bread (see above), so it received $1.66 billion for its shares. That’s equal to 64% of Maple Leaf’s $2.6-billion market cap....

ENCANA CORP. $26 (www.encana.com) has completed its plan to sell shares of subsidiary PrairieSky Royalty Ltd. (Toronto symbol PSK) to the public. PrairieSky owns the oil and natural gas rights to 5.2 million acres in Alberta....

AGRIUM INC. $99 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 144.0 million; Market cap: $14.3 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.3%; TSINetwork Rating: Average; www.agrium.com) continues to benefit from its plan to expand its retail operations, which sell seed, fertilizer and other products to farmers. Steady sales from the company’s stores help offset its exposure to volatile fertilizer prices.

Agrium’s 1,400 outlets in North America, South America and Australia now supply 75% of its sales and 40% of its earnings. The remaining 25% of sales and 60% of earnings mainly comes from making fertilizers from natural gas. Agrium also operates potash and phosphate fertilizer mines.

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TRANSCONTINENTAL INC. $16 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.0%; TSINetwork Rating: Average; www.tctranscontinental.com) earned $36.8 million in its fiscal 2014 second quarter, which ended April 30, 2014. That’s up 12.9% from $32.6 million a year earlier. Earnings per share rose 11.9%, to $0.47 from $0.42, on more shares outstanding.

These gains are mainly due to cost savings from a restructuring plan that mostly consisted of job cuts. Revenue fell 3.8% in the latest quarter, to $498.2 million from $517.8 million, as the slow economy hurt advertising sales at the company’s newspapers and flyer-printing businesses.

These results do not include Missouri-based Capri Packaging, which Transcontinental bought for $146.1 million in May 2014. Capri, which makes plastic food containers, should add $72 million U.S. to Transcontinental’s annual revenue.

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NORDION INC. $14 (Toronto symbol NDN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 61.9 million; Market cap: $866.6 million; Price-to-sales ratio: 2.6; No dividends paid since July 2012; TSINetwork Rating: Extra Risk; www.nordion.com) has accepted a $13.00 U.S.-a-share friendly bid from Sterigenics, a privately held Illinois firm that sterilizes surgical tools, drug ingredients and other materials.



Sterigenics expects to complete the takeover in the second half of 2014....

BLACKBERRY LTD. $8.46 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 526.8 million; Market cap: $4.5 billion; Price-to-sales ratio: 0.7; No dividends paid; TSINetwork Rating: Speculative; www.blackberry.com) has started selling its new Z30 touch-screen smartphone in Indonesia.

The Z30 is cheaper than Apple’s iPhone and devices that use Google’s Android software, which should help BlackBerry maintain its high share of Indonesia’s smartphone market.

The company now predicts it will probably lose money in the fiscal year ending February 28, 2015. However, it expects its recent job cuts, real estate sales and other cost-cutting measures will let it earn a profit in fiscal 2016.

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CAE INC. $15 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 263.8 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 1.6%; TSINetwork Rating: Average; www.cae.com) has a long history of developing flight simulators for Bombardier’s aircraft. This expertise will give CAE an advantage when airlines begin training their pilots to operate the new CSeries jet.

Meanwhile, the company sold a record 48 simulators in its 2014 fiscal year, which ended March 31, 2014. It ended the year with a $4.2-billion order backlog, which is equal to roughly two years’ worth of revenue.

CAE is our #1 buy for 2014.

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BOMBARDIER INC. (Toronto symbols BBD.A $3.88 and BBD.B $3.83; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $6.5 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.6%; TSINetwork Rating: Average; www.bombardier.com) is the world’s third-largest commercial aircraft maker, behind Boeing and Airbus. It is also the world’s leading passenger railcar manufacturer.

In the three months ended March 31, 2014, Bombardier’s earnings fell 3.2%, to $151 million from $156 million a year earlier (all amounts except share prices and market cap in U.S. dollars). Earnings per share were unchanged at $0.08. Revenue rose 0.3%, to $4.35 billion from $4.34 billion.

Revenue at the railcar division (52% of the total) rose 8.8%, as the company continues to win orders from public transit systems. This business ended the quarter with a record backlog of $38.4 billion, up 18.5% since the start of 2014.

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TELUS CORP. $41 (Toronto symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 618.9 million; Market cap: $25.4 billion; Price-to-sales ratio: 2.2; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.telus.com) has dropped its $350-million bid for wireless carrier Mobilicity.

The company was more interested in Mobilicity’s wireless frequencies, or spectrum, than its 165,000 wireless customers (Telus has 7.8 million wireless subscribers across Canada).

However, Ottawa opposed the deal. As well, if Telus had refused to drop the takeover, Ottawa would probably have blocked it from bidding on new spectrum at an auction planned for April 2015.

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ANDREW PELLER LTD. $14 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 11.3 million; Market cap: $158.2 million; Price-to-sales ratio: 0.7; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest producer of wines, after Vincor International. The company has wineries in Nova Scotia, Ontario and British Columbia.

In its 2014 fiscal year, which ended March 31, 2014, Peller’s sales rose 3.0%, to $297.8 million from $289.1 million in fiscal 2013. That’s mainly because it launched several successful products. Demand for its premium wines also remains strong.

However, strong competition in Western Canada and the Maritimes, as well as higher costs for wine and juice from overseas suppliers, cut Peller’s earnings by 3.4%, to $14.0 million from $14.5 million. Per-share earnings fell 2.9%, to $1.01 from $1.04. Without unusual items, such as losses on hedging contracts, earnings would have risen 4.5%.

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MOLSON COORS CANADA INC. (Toronto symbols TPX.A $78 and TPX.B $78; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 184.8 million; Market cap: $14.4 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.1%; TSINetwork Rating: Average; www.molsoncoors.com) is the world’s fifth-largest brewer.

In June 2012, Molson Coors paid $3.5 billion for StarBev, which owns nine breweries in central and eastern Europe (all amounts except share prices and market cap in U.S. dollars). The purchase has helped offset slower North American beer sales.

The company is also doing a good job of cutting StarBev’s costs and making it more efficient. In the three months ended March 31, 2014, Molson Coors’ earnings before one-time items jumped 115.2%, to $102.2 million from $47.5 million a year earlier. Per-share earnings rose 111.5%, to $0.55 from $0.26, on more shares outstanding.

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CANADIAN IMPERIAL BANK OF COMMERCE $97 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 397.4 million; Market cap: $38.5 billion; Price-to-sales ratio: 2.2; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.cibc.com) took control of FirstCaribbean, which offers banking services in 17 Caribbean countries, in December 2006. CIBC now holds a 91.7% stake. The region’s slow growth and high unemployment have prompted CIBC to write down the value of this investment by $420 million.

Due to this charge, as well as costs to launch a new loyalty plan for travellers after it lost the Aeroplan contract, CIBC’s earnings in the quarter ended April 30, 2014 fell 64.5%, to $306 million, or $0.73 a share. If you exclude all unusual items, the bank earned $887 million, or $2.17 a share. A year earlier, CIBC earned $862 million, or $2.09 a share.

Revenue rose just 1.4%, to $3.17 billion from $3.12 billion, mainly due to the loss of the Aeroplan deal.

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TRANSCANADA CORP. $50 (Toronto symbol TRP; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 707.4 million; Market cap: $35.4 billion; Price-to-sales ratio: 3.8; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.transcanada.com) operates a 68,500-kilometre pipeline network that pumps natural gas from Alberta to Eastern Canada and the U.S. The company’s pipelines supply 20% of North America’s natural gas. In 2013, they provided 51% of TransCanada’s revenue and 53% of its earnings.

The company also owns or invests in power plants in Alberta, Ontario, Quebec and the northeastern U.S. In all, these facilities have over 11,800 megawatts of generating capacity. TransCanada’s electricity operations now supply 36% of its revenue and 30% of its earnings.

In 2011, the company started up its oil pipeline division. This business mainly consists of the Keystone pipeline, which pumps oil from Alberta to refineries in Illinois, and a distribution hub in Cushing, Oklahoma. Oil pipelines supply the remaining 13% of TransCanada’s revenue and 17% of its earnings.

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ENBRIDGE INC. $51 (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 834.8 million; Market cap: $42.6 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.enbridge.com) operates pipelines that pump oil and natural gas from Western Canada to Eastern Canada and the U.S. The company’s pipelines also handle 53% of Canada’s crude oil exports to the U.S.

Pipelines supply 90% of Enbridge’s revenue. The remaining 10% comes from distributing gas to two million consumers in Ontario, Quebec, New Brunswick and New York State.

In the quarter ended March 31, 2014, Enbridge’s revenue jumped 33.2%, to $10.5 billion from $7.9 billion a year earlier, mainly because the company is pumping more crude from the Alberta oil sands.

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METRO INC. $67 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 87.0 million; Market cap: $5.8 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.8%; TSINetwork Rating: Average; www.metro.ca) is Canada’s third-largest supermarket operator, after Loblaw (also in this issue) and Sobeys. It now has 600 supermarkets and 250 drugstores.

To cut its reliance on Quebec, which accounted for nearly all of its revenue, Metro bought A&P Canada for $1.7 billion in 2005. The chain consisted of 240 food stores in Ontario, mostly under the A&P and Dominion names.

Since then, Metro has mainly focused on improving the profitability of its stores. Lower costs will give the company more flexibility to adjust its prices, and cope with the recent 7.3% increase in Ontario’s minimum wage.

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BANK OF NOVA SCOTIA $64 (www.scotiabank.com) earned $1.32 a share in its fiscal 2014 fourth quarter, which ended October 31, 2014. That figure excludes several unusual items, mainly severance costs related to the closure of 120 branches at its international division and the consolidation of some Canadian offices....

Pat McKeough responds to many requests from members of his Inner Circle for specific advice on stocks to buy as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle. This week an Inner Circle members asked us about one of the world’s best known entertainment companies. Walt Disney now has five separate businesses and continues to add to its assets. Pat examines the company’s entertainment empire and the impact of several recent high-profile acquisitions. He also consider the company’s financial outlook and whether the shares can continue their recent rise. Q: What is your opinion about Disney? Thanks....

Sales are slowing at these beverage makers, mainly because health-conscious consumers are cutting back on sugary drinks and alcohol. Still, they are taking measures to support their well-known brands and help them continue to prosper. They’re also cutting their costs in order to free additional cash. PEPSICO INC. (New York symbol PEP; www.pepsico.com) is the world’s second-largest soft drink maker after Coca-Cola. It also makes other products, such as Frito-Lay snack foods, Gatorade sports drinks, Tropicana fruit juices and Quaker Oats cereals....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you advice on specific investment topics. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Wise investors always value dividends, but many investors don’t realize that share buybacks can be just as valuable as dividends, and in some cases, more so.” Dividends are in fashion with investors, and that’s a good thing. Creative accounting can produce false impressions of prosperity and hide embarrassing financial problems. But accounting can’t create cash for this year’s dividend, let alone conjure up a history of past dividends. If you restrict your stock market picks to dividend payers, you’ll avoid most of the market’s greatest disasters....