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FRONTIER COMMUNICATIONS CORP. $3.50 (New York symbol FTR; Income Portfolio, Utilities sector; Shares outstanding: 998.5 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 11.4%; TSINetwork Rating: Average; www.frontier.com) earned $52.5 million in three months ended March 31, 2012, down 4.0% from $54.7 million a year earlier. Earnings per share were unchanged at $0.05 on fewer shares outstanding. These figures exclude costs related to Frontier’s July 2010 purchase of traditional phone (or land line) accounts from Verizon. Revenue fell 5.8%, to $1.3 billion from $1.35 billion. That’s because Frontier continues to lose residential (down 9.2%) and business (down 5.7%) customers.

However, the $0.10-a-share quarterly dividend still seems safe: the payout accounted for a moderate 39% of Frontier’s free cash flow (cash flow less capital expenditures) in the latest quarter.

Frontier Communications is still a hold.

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KRAFT FOODS INC. $38 (New York symbol KFT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.8 billion; Market cap: $64.8 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.kraft.com) plans to break itself into two separate, publicly traded companies by the end of 2012.

One company, called Mondelez International, will sell snack foods, such as Oreo cookies and Cadbury chocolates. The other, called Kraft Foods Group, will consist of Kraft’s slower-growing grocery business.

Kraft hasn’t announced the details of the split, but the Internal Revenue Service has confirmed that the break-up will be a tax-free transaction: shareholders won’t have to pay capital gains taxes until they sell their new shares.

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NORDSTROM INC. $50 (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 208.6 million; Market cap: $10.4 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.0%; TSINetwork Rating: Average; www.nordstrom.com) continues to add new Nordstrom Rack stores, which sell clearance merchandise from the company’s regular stores. That helps it attract cost-conscious shoppers.

The new stores increased sales by 13.2% in the quarter ended April 28, 2012, to $2.6 billion from $2.3 billion a year earlier. Same-store sales rose 8.5%.

Earnings rose at a slower pace of 2.8%, to $149 million from $145 million. Per-share earnings rose 7.7%, to $0.70 from $0.65, on fewer shares outstanding. Nordstrom’s profit margins fell because it introduced new loyalty programs and free shipping to compete with other retailers.

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J.P. MORGAN CHASE & CO. $34 (New York symbol JPM; Income Portfolio, Finance sector; Shares outstanding: 3.8 billion; Market cap: $129.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.5%; TSINetwork Rating: Average; www.jpmorganchase.com) recently announced a $2-billion loss on complex hedging contracts that it uses to cut the risk on corporate bonds it holds.

This unexpected trading loss has prompted the bank to suspend its plan to repurchase $15 billion of its shares by March 31, 2013. However, it will continue to pay a quarterly dividend of $0.30 a share, for an annualized yield of 3.5%.

J.P. Morgan Chase is still a hold.

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CEDAR FAIR L.P. $26 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 55.5 million; Market cap: $1.4 billion; Priceto- sales ratio: 1.4; Dividend yield: 6.2%; TSINetwork Rating: Average; www.cedarfair.com) owns 11 amusement parks, seven water parks and one hotel.

The partnership typically earns most of its money in the summer, as only one of its parks (Knott’s Berry Farm in Southern California) stays open year round. Still, Cedar Fair’s revenue rose 4.9% in the first quarter of 2012, to $28.2 million from $26.7 million a year earlier. Its loss narrowed to $65.2 million, or $1.18 a unit, from $84.7 million, or $1.53 a unit.

Cedar Fair keeps upgrading its parks: it will spend $90 million on new roller coasters and other attractions in 2012. That’s similar to what it spent in 2011.

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BUCKEYE PARTNERS L.P. $48 (New York symbol BPL; Income Portfolio, Utilities sector; Units outstanding: 97.8 million; Market cap: $4.7 billion; Price-to-sales ratio: 1.0; Dividend yield: 8.6%; TSINetwork Rating: Average; www.buckeye.com) operates over 9,600 kilometres of pipelines in the northeastern and midwestern U.S. Its network pumps gasoline, jet fuel and other petroleum products. Buckeye also owns oil and natural gas storage terminals and other related businesses.

The partnership continues to expand by acquisition. In February 2012, it agreed to buy a terminal in New York Harbour. That gives it access to the Atlantic Ocean, which makes it easier for Buckeye to import oil from foreign producers. From there, it can pump the oil through its pipelines to its customers.

Buckeye will pay $260 million for this terminal when the purchase closes later this year. It recently sold $250 million of new units to cover most of this cost.

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WEYERHAEUSER CO. $20 (New York symbol WY; Conservative Growth Portfolio, Resources sector; Shares outstanding: 537.5 million; Market cap: $10.8 billion; Price-to-sales ratio: 1.7; Dividend yield: 3.0%; TSINetwork Rating: Extra Risk; www.weyerhaeuser.com) is a leading maker of forest products, including paper and packaging. The company owns or leases over 20.3 million acres of timberland in the U.S. and Canada.

In 2010, Weyerhaeuser converted to a real estate investment trust (REIT). REITs pay little or no income tax, and must pay 90% of their earnings to their shareholders as dividends. Right now, Weyerhaeuser pays a regular quarterly dividend of $0.15 a share, for a 3.0% annualized yield.

The company continues to sell less profitable assets: in 2011, it sold $838 million of real estate.

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GOOGLE INC. $609 (Nasdaq symbol GOOG; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 326.0 million; Market cap: $198.5 billion; Price-to-sales ratio: 4.9; No dividends paid; TSINetwork Rating: Above Average; www.google.com) has completed its $12.5-billion purchase of cellphone maker Motorola Mobility Holdings Inc. (New York symbol MMI).

Owning Motorola gives Google access to patents that it can use to defend itself against lawsuits from other mobile phone makers. It will also make it easier for Google to integrate its popular Android operating system with new smartphones and tablet computers.

Google is a buy.

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XEROX CORP. $7.19 (New York symbol XRX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.4 billion; Market cap: $10.1 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.xerox.com) recently started providing services to businesses, such as processing credit card applications and insurance claims. That’s helping the company lower its reliance on more cyclical sales of office equipment, like copiers and printers.

In the three months ended March 31, 2012, Xerox’s revenue rose 0.7%, to $5.50 billion from $5.47 billion a year earlier. However, ongoing investments to expand its services operations cut its earnings by 4.5%, to $319 million from $334 million a year earlier. Earnings per share were unchanged at $0.23.

Xerox is a hold.

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ABB LTD. ADRs $16 (New York symbol ABB; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 2.3 billion; Market cap: $36.8 billion; Price-to-sales ratio: 1.0; Dividend yield: 4.5%; TSINetwork Rating: Above Average; www.abb.com) is a leading maker of power technologies for utilities. The Switzerland-based company’s products include transformers, transmission systems and circuit breakers. It also makes automation systems and robotics. Clients in a range of industries use ABB’s systems to make their facilities more productive.

The company is taking advantage of the slow economy to expand its U.S. operations. In January 2011, it paid $4.2 billion for Arkansas-based Baldor Electric Co., which makes electric motors and related products, such as conveyor belts, fans and pumps.

Baldor’s contribution increased ABB’s revenue by 6.0% in the first quarter of 2012, to $8.9 billion from $8.4 billion a year earlier. Strong gains in the Americas helped offset weaker demand in Europe and Asia.

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CANON INC. ADRs $41 (New York symbol CAJ; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.2 billion; Market cap: $49.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.canon.com) gets 49% of its revenue by making printers; consumer products, such as cameras and inkjet printers (40% of revenue); and industrial products, such as chips and other components for TV sets, medical equipment and mobile devices (11%).

In the three months ended March 31, 2012, Canon’s earnings rose 12.3%, to $750.5 million from $668.2 million a year earlier. Earnings per ADR rose 16.7%, to $0.63 from $0.54, on fewer ADRs outstanding (each ADR represents one common share).

The gains were largely due to lower costs. For example, Canon is using more robots to assemble its products.

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BHP BILLITON LTD. ADRs $63 (New York symbol BHP; Conservative Growth Portfolio, Resources sector; ADRs outstanding: 2.7 billion; Market cap: $170.1 billion; Price-to-sales ratio: 2.2; Dividend yield: 3.5%; TSINetwork Rating: Average; www.bhpbilliton.com) is the world’s largest mining company, with operations in Australia, South Africa, Chile and the U.K. It produces iron ore, coal, oil, natural gas, aluminum, manganese, diamonds and titanium.

In 2011, BHP expanded its oil and gas business with two major purchases: it paid $12.0 billion for Petrohawk Energy Corp., which produces oil and natural gas in Texas and Louisiana; and $4.75 billion for shale gas properties in Arkansas.

These acquisitions increased BHP’s oil and gas production by 58% in three months ended March 31, 2012, to 56.5 million barrels of oil equivalent (including gas) from a year earlier.

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PETSMART INC. $63 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 108.4 million; Market cap: $6.8 billion; Price-to-sales ratio: 1.0; Dividend yield: 0.9%; TSINetwork Rating: Above Average; www.petsmart.com) recently hit a new all-time high after it reported strong earnings and sales for its latest quarter. The stock is now up 96.9% since we first recommended it at $32 in our October 2007 issue.

The company is the biggest petsupply chain in the U.S. In all, it operates 1,241 pet stores in the U.S. and Canada. It also has 194 in-store PetsHotels, which look after pets while their owners are away.

In the first quarter of PetSmart’s 2013 fiscal year, which ended April 29, 2012, its earnings rose 33.5%, to $94.7 million from $70.9 million a year earlier. The company spent $175 million buying back its shares during the quarter. Due to fewer shares outstanding, earnings per share rose 39.3%, to $0.85 from $0.61.

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NEWELL RUBBERMAID INC. $18 (New York symbol NWL; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 289.9 million; Market cap: $5.2 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.2%; TSINetwork Rating: Average; www.newellrubbermaid.com) makes plastic storage bins, tools, window blinds, pens and a number of other household items. Its top brands include Rubbermaid, Sharpie, Paper Mate, Parker, Graco, Irwin, Waterman and Levolor.

The company has three divisions: Newell Consumer (which supplies 50% of Newell’s sales and 45% of its earnings); Newell Professional (35%, 40%) and Baby and Parenting (15%, 15%). Wal-Mart accounted for 11.0% of Newell’s sales in 2011.

The company’s sales rose 1.0%, from $6.4 billion in 2007 to $6.5 billion in 2008, but the recession lowered its sales by 13.8%, to $5.6 billion, in 2009. Sales rebounded by 3.3%, to $5.8 billion, in 2010, and climbed to $5.9 billion in 2011.

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A bargain is generally regarded as a good thing. What could be a better bargain for investors than buying shares of a stock at lower prices? “Averaging down” is the well-known market tactic by which investors buy more shares of a stock that has come down in price....

The Canadian penny is on its way out, and cash transactions are increasingly rare as well. Although it may not be a household name, this maker of transaction-processing software is aggressively seeking an even greater share of the market in credit card, debit card and smartphone payments. ACI WORLDWIDE (Nasdaq symbol ACIW; www.tsainc.com) makes software that is used to process transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments....

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. This past week, one Inner Circle member asked about one of the dividend stocks in his portfolio. Pat replies with a look at whether this leader in diabetes products can sustain its growth with new products and expanded international markets. ...

This is the latest in a series of video interviews in which Pat McKeough will give his investment advice on a variety of topics. Some will deal with his overall investment philosophy, others on specific investment strategies and still others will be comments on events that are affecting the markets and the economy. This week, the topic is the ongoing crisis in Europe, and the apparently unsolvable problems of Greece. Is it time to take some money out of the market? On the contrary, says Pat, investors who remain calm are looking at modest risk and a lot of upward potential.
Q: Pat, a socialist president was elected in France and Greece took another turn for the worse. Is it time to be taking some money out of the stock market?...

Dividends are in fashion with investors right now, and that’s always 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. It’s odd that while investors periodically crave cash dividends, they rarely get excited about stock buybacks. But in some ways, stock buybacks are better than dividends. In particular, they give you a tax-deferral option that you don’t get with cash dividends....

AGRIUM INC. (Toronto symbol AGU; www.agrium.com) makes fertilizers from natural gas. It sells its products to farmers and industrial users through its more than 1,200 stores in North America, South America and Australia. The company’s retail outlets help shield it from volatile fertilizer prices. Agrium continues to add more stores. It recently agreed to pay $1.65 billion (all amounts except share price and market cap in U.S. dollars) for 230 fertilizer outlets in western Canada operated by Viterra Inc....

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. This past week, an Inner Circle member wondered about one of Canada’s most successful growth stocks. The shares for this athletic wear firm have done very well for this investor, but he asks Pat if he should be cautious about the high share price....

This is the latest in a series of video interviews in which Pat McKeough will give his investing advice on a variety of topics. Some will deal with his overall investment philosophy, others on specific investment strategies and still others will be comments on events that are affecting the markets and the economy. This week, the topic is the decision of Internet phenomenon Facebook to start selling shares to the public. The intense media limelight surrounding this initial public offering is just one of the things that should make investors cautious, in Pat’s opinion.
Q: Pat, a lot of people are excited about the fact that Facebook is going to start selling its stock to the public. Do you think people should buy it?...

When the market is as turbulent as it has been lately, investors can easily panic and make mistakes. Our investment advice is to avoid three common mistakes we have seen over the years:

1. Overanalyzing: During this week’s market turmoil, the media has been focusing on the uncertainty in Europe. The election of a socialist president in France and electoral confusion in Greece is fuelling further fears about the ongoing European debt crisis....

The right number of stocks for you to own depends in part on where you are in your investing career. It makes sense that you should have fewer stocks

WYNDHAM WORLDWIDE $49.78 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 145.9 million; Market cap: $7.3 billion; Dividend yield: 1.8%) is one of the world’s largest hospitality companies, with 7,205 franchised hotels worldwide. Aside from Wyndham and Ramada, it owns a variety of other brands, including Days Inn, Super 8, Wingate, Baymont Inn & Suites, Microtel Inns & Suites, Hawthorn Suites, Howard Johnson, Travelodge and AmeriHost Inn.

In addition to hotels, Wyndham manages vacation resorts, rental properties, luxury clubs and time-shares. The company now has 100,000 vacation rental properties worldwide. This wide range of operations gives it more consistent cash flow than most of its competitors, which mainly focus on hotels.

Vacation travel keeps rising

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