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TRANSCANADA CORP. $45 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 704.0 million; Market cap: $31.7 billion; Priceto- sales ratio: 3.5; Dividend yield: 3.9%; 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 2011, they provided 49% of TransCanada’s revenue and 60% of its earnings.

In the past few years, the company has aggressively diversified into other businesses, mainly through acquisitions and big new projects.

It now owns or invests in over 20 electrical power plants in Alberta, Ontario, Quebec and the northeastern U.S. In all, these facilities have over 10,800 megawatts of generating capacity. Trans- Canada’s electrical power business now provides 42% of its revenue and 26% of its earnings.

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The more you know about investing, the more successful you will be. That has been Pat McKeough’s approach through four decades as an investor and investment counsellor. He regularly presents his views on specific investment topics on video in order to share the insights he has gathered over the years. In today’s video, Pat points out that while the knowledge you acquire is certain to enhance your success an investor, it is also true that a little knowledge can be a dangerous thing. That applies to one of the mainstays of stock research, the price/earnings ratio (the current share price divided by earnings per share). As a staple of stock quotes, the p/e ratio is widely used as a guide to the future profitability of a stock. But when it’s used on its own without taking other factors into account, Pat observes, it can lead to very costly mistakes. ...

Natural gas prices recently dropped below $2 U.S. per million British thermal units (BTUs), a 10-year low. Prices have since moved up somewhat, to $2.82. Shale gas discoveries continue to increase supply. At the same time, demand is slowing due to the weak global economy. Even so, the long-term outlook for gas is positive—and one reason is the prospect of rising liquefied natural gas (LNG) exports to countries like Japan, China and South Korea, where gas sells at a big premium to North American prices....

Pat McKeough responds to many personal questions on specific stocks and other investment topics from the members of his Inner Circle. 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 the Inner Circle. This week, one Inner Circle member asked Pat how he thinks one growing U.S. consumer chain measures up as a stock market investment. Tapping into the increasing demand for a healthier diet, this stock has already made its presence felt in Canada and aims to continue its ambitious expansion program....

BROADRIDGE FINANCIAL SERVICES INC. $24 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 124.9 million; Market cap: $3.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.0%; TSINetwork Rating: Average; www.broadridge.com) gets 70% of its revenue from its Investor Communication Solutions division, which distributes proxy materials, including ballots, to investors in stocks and mutual funds. It also counts the votes. Broadridge’s ProxyEdge software helps centralize and simplify shareholder voting, particularly if a meeting involves multiple ballots. Broadridge mails and processes 60% of all proxy votes worldwide.

The remaining 30% of its revenue comes from its Securities Processing Solutions division, which provides transaction-processing services that automate many functions, including taking and executing orders, confirming trades, settlement and accounting.

Big changes since spinoff

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MOTOROLA SOLUTIONS INC. $48 (New York symbol MSI; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 286.3 million; Market cap: $13.7 billion; Priceto- sales ratio: 1.6; Dividend yield: 2.2%; TSINetwork Rating: Average; www.motorolasolutions.com) makes specialized equipment, such as bar-code scanners and radios for police and fire vehicles. It gets two-thirds of its revenue by selling its products to governments; the remaining third comes from businesses.

Earnings jumped 29.6% in the three months ended June 30, 2012, to $0.70 a share from $0.54 a year earlier. Revenue rose 8.3%, to $2.1 billion from $2.0 billion. Sales to government customers rose 13.6%. However, weak economic conditions in Europe cut sales to businesses by 1.6%.

It also raised its quarterly dividend by 18.2%, to $0.26 a share from $0.22. The new annual rate of $1.04 yields 2.2%.

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PFIZER INC. $24 (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 7.5 billion; Market cap: $180.0 billion; Price-to-sales ratio: 2.8; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.pfizer.com) plans to spin off its animal health subsidiary, which makes drugs for livestock and pets, as a separate, publicly traded company. As part of this plan, Pfizer will sell up to 20% of this business. The new company, which will be called Zoetis Inc., supplied 6% of Pfizer’s 2011 revenue of $67.4 billion.

Pfizer should complete the offering in the first half of 2013. After that, it will probably hand out its remaining shares in Zoetis to its own shareholders.

Pfizer is a buy.

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EBAY INC. $47 (Nasdaq symbol EBAY; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $61.1 billion; Price-to-sales ratio: 4.5; No dividends paid; TSINetwork Rating: Above Average; www.ebay.com) is testing a new service called eBay Now, which provides same-day delivery of goods purchased from major retailers such as Macy’s, Best Buy and Toys R Us.

eBay Now lets users order goods using their smartphones for a small fee. A courier company then picks up the merchandise from a store and delivers it to the customer. eBay’s PayPal service processes all payments.

This new service should help eBay compete with Amazon.com, which offers two-day shipping for an extra fee. Moreover, using existing stores instead of building its own warehouses— as Amazon does— will help eBay keep its delivery costs down.

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WINDSTREAM CORP. $9.59 (Nasdaq symbol WIN; Income Portfolio, Utilities sector; Shares outstanding: 588.0 million; Market cap: $5.6 billion; Price-to-sales ratio: 1.1; Dividend yield: 10.4%; TSINetwork Rating: Average; www.windstream.com) reported revenue of $1.5 billion in the quarter ended June 30, 2012, up 49.3% from $1.0 billion a year earlier. The gain is mainly due to its December 2011 purchase of PAETEC Holding Corp., which sells telecommunication services to businesses. Integration costs cut its earnings by 43.4%, to $54.7 million, or $0.09 a share, from $96.7 million, or $0.19 a share.

As a result of this purchase, Windstream now gets 68% of its revenue from broadband services, up 2.5% from a year earlier. That’s helping it offset declining traditional phone revenue.

The company feels that closing overlapping functions will save it $50 million in 2012 and $100 million by the end of 2014. That should let it keep paying quarterly dividends of $0.25 a share, for a 10.4% annualized yield.

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SONY CORP. ADRs $12 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.0 billion; Market cap: $12.0 billion; Price-to-sales ratio: 0.2; Dividend yield: 2.7%; TSINetwork Rating: Average; www.sony.com) is buying California-based Gaikai Inc., whose technology makes it easier to play online video games. The purchase will help Sony sell more video games to users of its mobile phones and handheld gaming devices.

The company will pay $380 million for Gaikai when the deal closes later this year. To put that in context, it lost $312 million, or $0.31 per ADR, in the three months ended June 30, 2012.

Sony is a hold.

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APACHE CORP. $89 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 391.2 million; Market cap: $34.8 billion; Price-to-sales ratio: 2.0; Dividend yield: 0.8%; TSINetwork Rating: Average; www.apachecorp.com) produces oil and natural gas from properties in the U.S., Canada, the U.K., Australia, Egypt and Argentina. Gas accounts for 55% of its production, and oil supplies the remaining 45%.

Due to low natural gas prices, the company recently wrote down the value of its Canadian gas properties by $480 million. Without this charge, its earnings fell 34.9% in the three months ended June 30, 2012, to $821 million, or $2.07 a share. A year earlier, it earned $1.3 billion, or $3.22 a share. Revenue fell 8.4%, to $4.0 billion from $4.3 billion.

The company’s aggressive drilling program should let it reach its goal of increasing its production by 6% to 9% in 2012. The stock trades at a low 8.8 times the $10.08 a share that Apache will likely earn in 2012. The yearly dividend of $0.68 yields 0.8%.

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CHEVRON CORP. $112 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.0 billion; Market cap: $224.0 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.chevron.com) is the second-largest integrated oil company in the U.S. after ExxonMobil.

Chevron is still assessing the damage caused by a fire at its oil refinery in Richmond, California. This facility processes 245,000 barrels of crude oil a day and accounts for 10% of the refining capacity on the U.S. west coast. It will likely be several months before it resumes normal operations.

The company’s refineries supply just 11% of its earnings, so the outage should have little impact on its future profits. As well, Chevron’s selling prices for gasoline and other fuels are rising. That should help offset the repair costs.

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J.C. PENNEY CO. INC. $24 (New York symbol JCP; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 218.8 million; Market cap: $5.3 billion; Price-to-sales ratio: 0.3; Dividend suspended in May 2012; TSINetwork Rating: Extra Risk; www.jcpenney.com) operates more than 1,100 department stores in the U.S. and Puerto Rico. It also sells goods over the Internet.

In response to strong competition from discount retailers, Penney is shifting to an everyday pricing strategy. The company feels that predictable prices will spur customers to visit more often instead of waiting for items to go on sale.

Penney is also remodelling its stores to feature more in-store boutiques devoted to single brands, such as its Sephora beauty and fragrance shops. As well, the company is investing in new computer systems and simplifying its purchasing.

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NVIDIA CORP. $15 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 618.8 million; Market cap: $9.3 billion; Price-to-sales ratio: 2.3; No dividends paid; TSINetwork Rating: Average; www.nvidia.com) continues to see strong demand for its Tegra chips from makers of smartphones and tablet computers.

In its 2013 second quarter, which ended July 29, 2012, Nvidia’s sales rose 2.7%, to $1.04 billion from $1.02 billion a year earlier. However, earnings fell 11.9%, to $170.5 million from $193.5 million. Earnings per share fell 15.6%, to $0.27 from $0.32, on more shares outstanding.

Research spending rose 13.5%, to $281.2 million, or a high 26.9% of its revenue. This was the main reason for the lower earnings. However, new chips from these outlays should spur sales.

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INTERNATIONAL BUSINESS MACHINES CORP. $197 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $216.7 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.ibm.com) is paying an undisclosed sum for Texas Memory Systems. The deal should close by the end of 2012.

Privately held Texas Memory specializes in solid-state computer storage drives. Unlike regular hard drives, these are flash-memory drives with no moving parts. As a result, they use less energy and let computers access data quicker. This technology should speed up IBM’s mainframes and enhance its analytics software, which helps businesses and governments quickly gather and analyze huge amounts of data.

IBM is our #1 buy for 2012.

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TENNANT CORP. $43 (New York symbol TNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 18.6 million; Market cap: $799.8 million; Price-to-sales ratio: 1.1; Dividend yield: 1.6%; TSINetwork Rating: Average; www.tennantco.com) makes industrial floor-cleaning equipment, including scrubbers, sweepers and polishers. It also manufactures cleaning gear for garages, stadiums, parking lots and city streets.

The company continues to see strong demand for its ec-H2O floor-scrubbing machine, which uses electricity to make tap water act like a detergent. That eliminates the need for soaps and cleaning agents, and lowers the machine’s operating costs.

Tennant has also developed other environmentally friendly equipment. For example, the Orbio 5000-sc creates a cleaning liquid using water, salt and electricity. Users can pour this solution into spray bottles and floor scrubbers.

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BRIGGS & STRATTON CORP. $18 (New York symbol BGG; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 48.7 million; Market cap: $876.6 million; Priceto- sales ratio: 0.4; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.briggsandstratton.com) is the world’s largest maker of lawn mower engines. This business accounts for 58% of Briggs’s sales. It gets the remaining 42% by making other home and garden equipment, such as generators, pressure washers and snow blowers.

The company is seeing weaker sales in North America— partly due to this year’s drought— and in Western Europe. In response, Briggs recently closed two plants in the U.S. and one in the Czech Republic. Severance payments and related costs totalled $49.9 million, but these moves should lower the company’s annual costs by $45 million by 2014.

Briggs also plans to stop selling lawn mowers to big retail chains like Wal-Mart and Home Depot. This will cut its annual sales by $100 million, but the company’s profit margins on these items are low, so this move should improve its overall earnings.

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SNAP-ON INC. $70 (New York symbol SNA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 58.2 million; Market cap: $4.1 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.9%; TSINetwork Rating: Average; www.snapon.com) makes tools for auto mechanics and sells them directly through its fleet of franchised vans that visit garages. This unique sales model puts it in a great position to gain from rising car sales.

Right now, Snap-On is focused on expanding in Asia and other fast-growing regions, where rising prosperity is fuelling car demand. The company now gets roughly 40% of its revenue from overseas markets.

At the same time, Snap-On is investing heavily in other businesses that will cut its exposure to the cyclical car market. For example, it now makes specialized tools for mining companies, electrical power generators and aerospace companies.

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GENUINE PARTS CO. $64 (New York symbol GPC; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 155.1 million; Market cap: $9.9 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.1%; TSINetwork Rating: Average; www.genpt.com) gets 50% of its sales and 53% of its earnings by selling auto parts. The company operates 1,300 of its own outlets under the NAPA banner, and its distribution business serves 4,750 independent stores across North America.

Genuine also distributes industrial parts (34% of sales, 33% of earnings), office furniture (12%, 10%) and electrical equipment (4%, 4%).

In January 2012, the company paid $165.6 million for 30% of Exego Group, a privately held firm that sells auto parts through 430 stores in Australia and New Zealand. As part of the deal, Genuine acquired an option to buy the remaining 70%.

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MCCORMICK & CO. INC. $60 (New York symbol MKC; Income Portfolio, Consumer sector; Shares outstanding: 120.2 million; Market cap: $7.2 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.1%; TSINetwork Rating: Average; www.mccormick.com) is buying Wuhan Asia-Pacific Condiments Co., Ltd., a leading maker of bouillon products in China.

The company will pay $141 million for this business when the deal closes in mid-2013.

To put that price in context, McCormick earned $80.4 million, or $0.60 a share, in its fiscal 2012 second quarter, which ended May 31. 2012. The new operations will add $115 million to McCormick’s annual sales of $3.9 billion.

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GOOGLE INC. $677 (Nasdaq symbol GOOG; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 327.0 million; Market cap: $221.4 billion; Priceto- sales ratio: 5.1; No dividends paid; TSINetwork Rating: Above Average; www.google.com) is the world’s top Internet search engine, with about two-thirds of this market. The company has held on to its lead because its well-developed search technology gives it a big advantage over its competitors.

Google does not charge for its searches. Instead, it makes money by selling advertising on its websites. It mainly does this through its AdWords program, which lets advertisers bid on certain search words or phrases. The company then charges advertisers when users click on their ads. Google gets around 97% of its revenue from advertising.

The company also offers free access to all or part of its other services, including Gmail (email), YouTube (videos), Google Books (electronic books), Google Talk (Internet-based phone calls), Google+ (social networking) and Google Chrome (an Internet browser). These services help draw more users to Google’s sites, which lets the company sell more ads and charge higher ad rates.

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Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific stock market advice that will help you develop a successful approach to investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “There is an element of chance in the success of every business, and it’s rarely worthwhile to test your luck by investing in new issues.”...

POTASH CORP. OF SASKATCHEWAN (Toronto symbol POT; www.potashcorp.com) is the world’s largest fertilizer producer. Its six potash mines in Saskatchewan and one in New Brunswick account for 20% of global potash capacity. Four of its mines have reserves of between 75 and 108 years. It also makes fertilizers from nitrogen and phosphate. The company’s sales and earnings vary with volatile fertilizer prices. That’s why its sales jumped from $5.2 billion in 2007 to $9.4 billion in 2008, but dropped to $4.0 billion in 2009 (all amounts except share price in U.S. dollars). Sales recovered to $6.5 billion in 2010, and rose to $8.7 billion in 2011....

Pat McKeough responds to many personal questions on specific stocks and other investment topics from the members of his Inner Circle. 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 the Inner Circle. This past week, an Inner Circle asked us about one of the handful of companies (outside of REITs) that has remained an income trust. This auto repair firm has undertaken a program of rapid growth that involves buying up smaller shops and chains. Pat assesses the pros and cons of this aggressive strategy. Q: Dear Pat: What do you think about Boyd Group Income Fund? Could you please give me your insight and recommendation? Thank you....

We receive many questions from our readers and clients on retirement planning, and the subject has become even more popular as the first wave of the baby boom generation enters the retirement years. Many more will soon follow.

Most retirement questions revolve around how much money you need to retire, and the best way to generate a steady, comfortable income after you have left your working life behind....