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CANADIAN UTILITIES LTD. (Toronto symbols CU (class A non-voting) $47 and CU.X (class B voting) $47; Income Portfolio, Utilities sector; Shares outstanding: 125.9 million; Market cap: $5.9 billion; Price-to-sales ratio: 2.2; Dividend yield: 3.2%; SI Rating: Above Average) distributes electricity and natural gas in Alberta. It also operates 19 power plants: 15 in Canada, two in the U.K., and two in Australia, As well, Canadian Utilities sells engineering services to other utilities. ATCO Ltd. owns 52.3% of the company. Canadian Utilities’ 2009 revenue fell 7.0%, to $2.6 billion from $2.8 billion in 2008, partly due to lower electricity prices in Alberta. But thanks to improving efficiency and regulatory relief, its earnings rose 5.9%, to $3.40 a share (or a total of $427.6 million) from $3.21 a share (or $403.2 million). The company aims to fuel long-term growth with new projects. For example, it will soon begin work on a $1.65-billion power transmission line between Edmonton and Calgary....

TRANSALTA CORP. $22 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 218.4 million; Market cap: $4.8 billion; Price-to-sales ratio: 1.7; Dividend yield: 5.3%; SI Rating: Average) operates roughly 80 unregulated power plants in Canada, the U.S. and Australia. Coal-fired plants account for about 57% of the power it generates. Hydroelectric and renewable sources account for 23%, and the remaining 20% comes from natural gas. In November 2009, TransAlta paid $755 million for Canadian Hydro Developers Inc., which owns and operates 21 power-generating facilities in Alberta, B.C., Ontario and Quebec. These include 12 hydroelectric plants, eight wind farms and one biomass plant, which generates power by burning plant materials and wood waste from lumber mills. Adding Canadian Hydro will help TransAlta comply with the tougher environmental regulations that will likely come into force over the next few years. To help pay for this purchase, TransAlta raised $412.5 million by selling 20.5 million common shares for $20.10 each. That increased the total number of shares outstanding by 10%....

EMERA INC. $24 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 113.0 million; Market cap: $2.7 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.7%; SI Rating: Average) owns Nova Scotia Power Inc., which is Nova Scotia’s main electrical-power supplier. Nova Scotia Power supplies 94% of Emera’s revenue. The remaining 6% comes from investments in power companies in the U.S. and Caribbean. Emera is diversifying into other businesses. For example, its Brunswick Pipeline, which carries natural gas from Saint John, New Brunswick, to the U.S. border, began operating on July 16, 2009. The pipeline contributed $14.0 million to Emera’s 2009 earnings. That’s the main reason why its 2009 earnings rose 21.9%, to $175.7 million from $144.1 million in 2008. Emera also benefited from higher power rates in Nova Scotia. Earnings per share rose 20.6%, to $1.52 from $1.26, on more shares outstanding. Revenue rose 10.0%, to $1.5 billion from $1.3 billion....

CANADIAN TIRE CORP. $56 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.6 million; Market cap: $4.6 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.5%; SI Rating: Above Average) sells automotive, household and sporting goods through 479 stores. These account for roughly 65% of its revenue, and 55% of its earnings. Canadian Tire owns 70% of its stores, but franchisees operate all of them. The company also owns other retail chains, including 378 Mark’s Work Wearhouse casual-clothing stores, 273 gas stations (some of which have car washes and convenience stores), and 87 PartSource auto-parts stores. Canadian Tire’s sales rose 18.2%, from $7.7 billion in 2005 to $9.1 billion in 2008. In 2009, sales fell 4.8%, to $8.7 billion. Same-store sales at the main retail division, which includes Canadian Tire and PartSource stores, fell 4.2%. Weak electronics sales offset higher sales of cleaning, kitchen and pet-care goods. As well, a lack of snow in Ontario and Quebec hurt sales of winter merchandise, such as snow shovels....

FORTIS INC. $28 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 170.7 million; Market cap: $4.8 billion; Price-to-sales ratio: 1.3; Dividend yield: 4.0%; SI Rating: Above Average) is the main supplier of electrical power in Newfoundland and Prince Edward Island. It also operates power plants in other parts of Canada, as well as the U.S., Belize and the Cayman Islands. As well, Fortis operates hotels and other businesses in Atlantic Canada. The company has been working to lower its reliance on Atlantic Canada. Much of its growth has come from the assets it bought as part of this plan. In May 2004, Fortis bought regulated electrical utilities in Alberta and B.C. for $1.5 billion in cash and stock. In May 2007, it paid $3.7 billion for the regulated gas-distribution business of Terasen Inc. (formerly called BC Gas), which has 939,600 customers in B.C. Fortis issued $1.15 billion of new common shares to help pay for this purchase....

ATCO LTD. (Toronto symbols ACO.X (class I non-voting) $50 and ACO.Y (class II voting) $51; Income Portfolio, Utilities sector; Shares outstanding: 58.2 million; Market cap: $2.9 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.1%; SI Rating: Above Average) is a holding company. Its main subsidiary is 52.3%-owned Canadian Utilities. ATCO recently reorganized its operations into three main divisions: Utilities (which distributes electricity and natural gas); Energy (which operates power plants); and Structures & Logistics (which provides services to energy-exploration and construction companies). ATCO owns 75.5% of the Structures & Logistics division; Canadian Utilities owns the remaining 24.5%....

There’s no limit to the range of investment questions that members of Pat McKeough’s Inner Circle get to ask me and my investment associates.

Many members ask us about specific investments (such as stocks, exchange-traded funds and income trusts), that they are thinking of buying or selling....

We’ve long recommended these 4 safe investing strategies in our newsletters and investment services. They can help you cut risk — and increase profits — in your stock portfolio. (Our special report, “Canadian Stock Market Basics: How to Trade Stocks and Make Good Investments in Canada,” is full of safe investing strategies that you can easily put into practice right away. Click here to download your copy today.) 1. Look beyond a company’s share price: It’s a mistake to base your decision to buy or sell a stock on past stock-price performance alone. Rising and falling trends come in many shapes and sizes, depending on what’s going on in a company, its industry and the world....

When we’re picking stocks to recommend in our newsletters, including Wall Street Stock Forecaster, our publication that covers the U.S. markets, we like to see companies that benefit from steady revenue streams from high-quality assets, long-term contracts or other reliable sources. That’s because this type of revenue helps cut a stock’s risk. It also cuts its exposure to the ups and downs of the economic cycle. ...

In light of recent headlines, it’s not surprising that some investors consider investing in South Korea to be a risky proposition. That’s because the country borders on North Korea, with its nuclear weapons and seemingly unstable leader. Certainly, North Korea’s unpredictability is a continuing drawback to investing in South Korea. However, the North Korean leader’s bluster has so far stopped short of any serious risk to the south. As well, South Korea’s economy, which is Asia’s fourth largest, grew 5.9% in the fourth quarter of 2009. That’s the highest rate since 2007. Moreover, the World Bank’s 2010 ease of doing business survey recently ranked South Korea 19th, just behind Sweden and ahead of Germany and France. (Brazil, by comparison, ranked 129th and India 133rd.)...

BCE INC. $30.07 (Toronto symbol BCE; Shares outstanding: 765.2 million; Market cap: $23.0 billion; SI Rating: Above Average; Dividend yield: 5.8%) provides telephone and Internet services in Ontario and Quebec. It also sells wireless and satellite-TV services across Canada. In 2009, BCE’s revenue rose 0.4%, to $17.74 billion from $17.66 billion in the prior year. Earnings before one-time items rose 6.5%, to $1.9 billion from $1.8 billion in the prior year. Per-share earnings rose 11.1%, to $2.50 from $2.25, on fewer shares outstanding. The Canadian wireless market is highly competitive. However, last year BCE bought the “The Source,” a 756-store home-electronics chain. That gives BCE a ready outlet to sell its products and services. As well, the company’s Virgin Mobile discount cellphone service is helping it attract younger, more cost-conscious users....

Our Successful Investor business model has two parts. We publish investment advice, and we manage investor portfolios. This two-business model has advantages for our subscribers. The stock market investing problems we encounter as money managers, and the solutions we come up with, help us give our readers unbiased, practical advice. This serves as a counterweight to advice you may encounter elsewhere that is based on misapplied theory, or tainted by conflicts of interest. ...

Every year, you gain an additional $5,000 of contribution room in your tax free savings account (TFSA). That means you have $10,000 of contribution room in 2010, rising to $15,000 in 2011, $20,000 in 2012 and so on. You also get to carry forward unused contribution room from previous years. Tax-free savings accounts let you earn investment income — including interest, dividends and capital gains — tax free. But unlike registered retirement savings plans (RRSPs), contributions to tax free savings accounts are not tax deductible. However, withdrawals from a TFSA are not taxed. Here are three tips you can use to make sure you’re getting the most profit — and tax benefits —from your tax free savings account:...

As part of our investing strategy, we put a lot of importance on the amount of goodwill that a company carries as an asset on its balance sheet. Goodwill is an accounting entry that reflects the price that the company paid for its acquisitions, minus the value of the tangible assets, like land and equipment, that it received as part of the acquisition. The term means “value as a going concern.” However, goodwill acquired in an unwise acquisition can lose value overnight. When that happens, the company has to write it off against earnings. At worst, the company might have to write off most, if not all, of its goodwill....

Higher commodity prices and an improving global economy have pushed up the prices of many junior mining stocks recently. And we think the best juniors have the potential to go even higher. (In a recent Stock Pickers Digest hotline, we updated our buy/sell/hold advice on a junior mine that’s risen more than 50% in the past six months, Baffinland Iron Mines. It’s got an iron-ore project with strong potential on remote Baffin Island. Read on for further details.) Despite the strong potential of top junior mining stocks, it’s important to remember that these stocks are among the riskiest you can buy. That’s why we think it’s a mistake to load your portfolio up with these highly volatile companies. Instead, make sure your investments are diversified by spreading your holdings out across the five main economic sectors (Manufacturing & Industry, Resources & Commodities, the Consumer sector, Finance and Utilities)....

It always pays to be skeptical when a company claims to have a have a revolutionary new invention or technology. That’s because, when you invest based on company marketing claims, you risk becoming too focused on the innovation and failing to look at the stock’s fundamentals, such as p/e ratios and other measures of value and risk. Sound-bite-based investing also ignores (or glosses over) a company’s industry position and the conditions within its particular market. ...

Members of our Inner Circle service increasingly ask us about investing in exchange traded funds (ETFs). These funds have gained popularity among investors in recent years, mainly because many ETFs offer very low management fees. Exchange traded funds are set up to mirror the performance of a stock-market index or sub-index. They hold a more-or-less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index. Exchange traded funds trade on stock exchanges, just like stocks. Investors can buy them on margin or sell them short. We recommend a number of carefully selected exchange-traded funds in our Canadian Wealth Advisor newsletter....

Some U.S. bank stocks have reported improved profits lately. And many banks have repaid some or all of the loans they received under the U.S. government’s Troubled Asset Relief Program (TARP) in 2008. That frees these bank stocks from government control, and improves their long-term prospects. However, the U.S. banking sector remains highly volatile. As well, the industry could face greater regulation and higher costs if the Obama administration moves ahead with its reform plans. For example, Senate Banking Chairman Christopher Dodd recently released a bill that proposes to tax the largest bank stocks and financial institutions. The proceeds would be used to support a $50-billion U.S. fund aimed at dealing with failing banks and financial firms in the future....

Here are four common mistakes investors make when buying (or selling) stocks. By avoiding them, you stand a better chance of improving your returns — and cutting risk — in your stock portfolio:

1. Failing to take a broad view: When making investment decisions, it pays to take a wide range of relevant facts — positive and negative — into account....

WAL-MART STORES INC. $56 (New York symbol WMT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 3.8 billion; Market cap: $212.8 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.2%; WSSF Rating: Above Average) is the world’s largest retailer. The company has over 8,400 stores in the U.S. and 14 other countries, including over 2,700 supercentres, which sell groceries as well as general merchandise. Groceries now account for about half of Wal-Mart’s U.S. sales. The company’s sales rose 30.7%, from $312.4 billion in 2006 to $408.2 billion in 2010 (Wal-Mart’s fiscal year ends January 31). Earnings rose 29.0%, from $11.0 billion in 2006 to $14.2 billion in 2010. Earnings per share rose 39.2%, from $2.63 in 2006 to $3.66 in 2010, on fewer shares outstanding. Wal-Mart’s large size lets it negotiate better prices with its suppliers. That gives it a big advantage over its competitors. The company has also invested heavily in computer systems that track its customers’ buying patterns. This information helps Wal-Mart quickly adjust its inventories to respond to changing trends....

H&R BLOCK INC. $17 (New York symbol HRB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 329.2 million; Market cap: $5.6 billion; Price-to-sales ratio: 1.4; Dividend yield: 3.5%; WSSF Rating: Above Average) is the world’s largest provider of income-tax-preparation services. It also provides accounting services to businesses, as well as banking services to consumers. The slow economy and high unemployment are prompting more tax filers to turn to tax-preparation software or free online-processing services. That’s cutting into revenue at H&R Block’s traditional tax-preparation business. As well, the weak economy is hurting demand for its accounting services from businesses. As a result, H&R Block’s revenue fell 5.9%, to $934.9 million, in the three months ended January 31, 2010. Its revenue was $993.4 million a year earlier. Earnings fell 19.8%, to $53.6 million, or $0.16 a share, from $66.8 million, or $0.20 a share....

T. ROWE PRICE GROUP INC. $55 (Nasdaq symbol TROW; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 259.0 million; Market cap: $14.2 billion; Price-to-sales ratio: 7.7; Dividend yield: 2.0%; WSSF Rating: Average) sells mutual funds and wealth-management services. The company’s assets under management rose 41.6%, to $391.3 billion at the end of 2009 from $276.3 billion a year earlier. Rising stock markets were the main reason for the increase. As well, the improving economy spurred higher demand for mutual funds. Despite these gains, average assets under management still fell 10.3% in 2009. As a result, T. Rowe Price’s revenue fell 11.8% in 2009, to $1.9 billion from $2.1 billion in 2008. Earnings dropped 11.7%, to $433.6 million from $490.8 million. Earnings per share fell 8.8%, to $1.65 from $1.81, on fewer shares outstanding....

PETSMART INC. $32 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 123.6 million; Market cap: $4.0 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.3%; WSSF Rating: Above Average) is the biggest pet supply chain in the U.S. It operates 1,149 pet stores in the U.S. and Canada. It also has 162 in-store PetHotels, which look after pets while their owners are away from home. PetSmart focuses on selling premium pet foods and other products that most supermarkets don’t carry, including its own line of private-label products. It also plans to launch a new line of Martha Stewart pet-care products in the next few months. Exclusive items like these help the company compete with larger retailers — including Wal-Mart. ...

AMERICAN EXPRESS CO. $41 (New York symbol AXP; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $49.2 billion; Price-to-sales ratio: 1.9; Dividend yield: 1.8%; WSSF Rating: Average) gets most of its revenue from the the fees it charges merchants when consumers use its credit and charge cards. It also provides travel-agency services. American Express set aside $5.3 billion to cover bad loans in 2009. That’s down 8.4% from $5.8 billion in 2008. However, the 2009 figure is still up more than 100% from four years ago. In 2009, the company’s earnings fell 25.6%, to $2.1 billion from $2.9 billion in 2008. The company sold $555.5 million of new common shares in 2009 to help repay the $3.4 billion in loans it received from the U.S. Treasury under the Troubled Asset Relief Program (TARP). Because of the extra shares outstanding, earnings per share fell 37.7%, to $1.54 from $2.47. Revenue fell 13.5%, to $24.5 billion from $28.4 billion....

STATE STREET CORP. $45 (New York symbol STT; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 495.4 million; Market cap: $22.3 billion; Price-to-sales ratio: 2.7; Dividend yield: 0.1%; WSSF Rating: Extra Risk) makes most of its money providing accounting and record-keeping services to large institutional investors, such as mutual funds and pension plans. State Street has agreed to pay $313 million to settle lawsuits that accused the company of selling investors securities backed by subprime mortgages without warning of the risks involved. This latest payment is in addition to $350 million that State Street has already paid to settle earlier lawsuits. If you exclude these payments and other unusual items, State Street would have earned $2.0 billion in 2009. That’s down 14.9% from $2.4 billion in 2008. In May 2009, State Street issued $2 billion of common shares and used the proceeds to pay back its TARP loans. As a result of the extra shares, earnings per share fell 26.7%, to $4.11 from $5.61. Revenue fell 16.4%, to $8.8 billion from $10.5 billion....