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ATCO LTD. (Toronto symbols ACO.X (class I non-voting) $38 and ACO.Y (class II voting) $39; Income Portfolio, Utilities sector; Shares outstanding: 57.9 million; Market cap: $2.2 billion; Price-to-sales ratio: 0.7; SI Rating: Above Average) is a Calgary-based holding company. ATCO’s main subsidiary is 52.3%-owned Canadian Utilities Ltd.. This business distributes natural gas and electricity in Alberta. It also operates power plants in Canada, the U.K. and Australia. ATCO’s other businesses involve selling specialized services to other companies. These include building temporary structures, airfields and communication systems for resource and construction firms. It also offers billing and payment processing, natural-gas storage and travel services. The company’s revenue fell from $3.3 billion in 2004 to $2.9 billion in 2005, after Canadian Utilities sold its non-regulated retail operations, which supplied households with natural gas and electricity. But revenue rose steadily, returning to $3.3 billion in 2008. Earnings more than doubled, from $130.9 million, or $2.28 a share, in 2004 to $265.6 million, or $4.60 a share, in 2008....

DUNDEE CORP. $9.40 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 74.3 million; Market cap: $698.4 million; Price-to-sales ratio: 0.9; SI Rating: Average) is a holding company with subsidiaries in three main areas: wealth management, real estate and resources. The company’s main asset is its 49% stake (62% voting interest) in DundeeWealth Inc. (Toronto symbol DW), which provides investment-management, securities-brokerage, financial-planning and investment-advisory services. It also owns the Dynamic family of mutual funds. In the three months ended June 30, 2009, Dundee earned $29.9 million, or $0.39 a share. That’s a big improvement over the $6.6 million, or $0.08 a share, that it earned in the year-earlier quarter. The gain was largely driven by new floating-rate notes that Dundee received last January in exchange for illiquid asset-backed commercial paper. Based on improving conditions in the credit markets, Dundee recognized a $45.6-million, non-cash accounting gain on these notes in the latest quarter. Revenue fell 13.5%, to $245.6 million from $284 million, as lower stock-market values hurt Dundee-Wealth’s management fees and mutual-fund sales. As of June 30, 2009, DundeeWealth’s assets under management stood at $29.8 billion. That’s a 5.2% drop from $31.5 billion a year earlier....

GREAT-WEST LIFECO INC. $25 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 944.3 million; Market cap: $23.6 billion; Price-to-sales ratio: 1.0; SI Rating: Above Average) is Canada’s largest insurance company, with $441.9 billion of assets under administration. Great-West also provides retirement-planning and wealth-management services. It gets about 60% of its earnings from Canada, followed by Europe (25%) and the United States (15%). Power Financial Corp. (Toronto symbol PWF) owns 68.7% of Great-West’s shares. In August 2007, Great-West bought Putnam Investments Trust, a leading U.S. mutual-fund company. Great-West paid just $4.2 billion, even though Putnam had $182 billion U.S. in assets under administration. That’s because Putnam was coming off a mutual-fund trading scandal that spurred a wave of investor redemptions. Putnam’s assets have since dropped to $108 billion U.S., largely because of falling stock prices. Still, the purchase gave Great-West access to Putnam’s large client base. In the three months ended June 30, 2009, Great-West’s earnings fell 26.8%, to $413 million from $564 million a year earlier. In response to last year’s financial-market turmoil, the company sold $1 billion worth of common shares to shore up its already strong balance sheet. As a result, earnings per share in the latest quarter fell 30.2%, to $0.44 from $0.63....

HOME CAPITAL GROUP INC. $37 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.4 million; Market cap: $1.3 billion; Price-to-sales ratio: 2.5; SI Rating: Average) is the parent of Home Trust Company, a federally regulated trust company that specializes in issuing residential first mortgages and credit cards to borrowers who don’t meet the higher standards of larger, traditional lenders. Home Capital issued $1.3 billion worth of new residential mortgages in the three months ended June 30, 2009. That’s up 82.2% from the prior quarter. The gain is mainly because low interest rates helped improve housing markets in Ontario and Quebec. However, the company issued just $23.3 million of new non-residential mortgages, a 34.5% drop from the prior quarter. Because of the higher volumes, Home Capital’s revenue rose 7.8%, to $121.8 million from $113 million a year earlier. Earnings jumped 29.4%, to $34.4 million, or $0.99 a share, from $26.6 million, or $0.76 a share....

IGM FINANCIAL INC. $43 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 264.1 million; Market cap: $11.4 billion; Price-to-sales ratio: 4.7; SI Rating: Above Average) is Canada’s largest independent mutual-fund company, with $112.3 billion in assets under management. Power Financial owns 56.4% of IGM. IGM operates through two main divisions. Investors Group sells funds through its own network of 4,500 advisors. Mackenzie Financial sells its funds through independent brokers. In June, IGM purchased the 27.6% of Investment Planning Counsel (IPC) that it did not already own. IPC’s 700 advisors provide wealth-management services. IGM paid a total of $42.4 million, which consisted of $1.7 million in cash and $40.7 million in common shares. IGM will keep operating IPC separately, and will not merge it with Investors Group or Mackenzie....

EMERA INC. $21 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 112.4 million; Market cap: $2.4 billion; Price-to-sales ratio: 1.7; SI Rating: Average) has expanded beyond Nova Scotia in the past few years. The company supplies 95% of that province’s electrical power. For example, Emera will pay $27.6 million for 9.9% of Algonquin Power Income Fund (Toronto symbol APF.UN). Algonquin owns or has interests in 41 hydroelectric facilities in Canada and the U.S. Separately, Emera and Algonquin have formed a 50/50 joint venture that will pay $116 million U.S. for a power generation and distribution business in Lake Tahoe, California. After these transactions close in 2010, they should add $6 million to $7 million to Emera’s annual earnings. Meanwhile, Emera earned $38.1 million, or $0.33 a share, in the second quarter of 2009. That’s down 11.2% from $42.9 million, or $0.37 a share, a year earlier. Under a new arrangement with Nova Scotia power regulators, Emera incurred an extra $16.3 million of fuel expenses in the quarter. However, the deal also let it increase power rates, which will help it recover most of these extra costs. Revenue by 5.2%, to $334.2 million from $317.6 million....

FORTIS INC. $25 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 170.3 million; Market cap: $4.3 billion; Price-to-sales ratio: 1.1; SI Rating: Above Average) gets just 15% of its revenue from Newfoundland Power, its original business. In the past few years, the company has bought electrical utilities in four other Canadian provinces, as well as the U.S. and Caribbean. However, about half of its revenue now comes from Terasen Inc., which distributes natural gas in British Columbia. The company paid $3.7 billion for Terasen in May 2007. In the three months ended June 30, 2009, Fortis’s earnings jumped 82.8%, to $53 million, or $0.31 a share, from $29 million, or $0.18 a share, a year earlier. If you exclude one-time charges in the year-earlier quarter, earnings would have risen 20.5%. Terasen contributed $14 million to the latest earnings. Revenue fell 11.1%, to $754 million from $848 million. The drop was largely because of warmer-than-usual spring weather, which hurt natural-gas demand at Terasen. The stock trades at 16.7 times Fortis’s projected 2009 earnings of $1.50 a share. That’s a higher p/e ratio than other utilities, but still reasonable in light of Fortis’s high-quality operations and geographic diversity. The $1.04 dividend yields 4.2%....

Investing is different from many other pursuits in one crucial way: doing the wrong thing as an investor can actually make money for you, but only temporarily. Buying low-quality stocks is a mistake that many investors make. Some get hooked on it, since low-quality stocks can be highly profitable over short periods. That’s because they are generally more volatile than the high-quality stocks (the kind that have a history of earnings, if not dividends) that we recommend in our Successful Investor newsletter. ...

Many companies have cut their spending on information technology while they wait for the economy to start growing again. At the same time, consumers are buying less computer equipment as job losses push up the unemployment rate and erode confidence. Still, we feel that high-quality junior tech stocks have a bright long-term outlook. Despite the recession, the best of them remain profitable, and they’ll benefit further from pent-up demand as the economy recovers. ...

There’s no doubt that p/e (price-to-earnings) ratios are a major part of many investors’ stock research. They are published regularly on the Internet and in newspapers, and are widely followed. The p/e is the ratio of a stock’s market price to its per-share earnings. Generally, the rule is that the lower the p/e, the better, and a p/e of less than, say 10, represents excellent value. A low p/e implies more profit for every dollar you invest. Typically, when you do stock research, you calculate p/e’s using a stock’s current price and its earnings for the previous 12 months. ...

In 2011, the Canadian government will begin taxing income trusts (with the exception of real estate investment trusts, or REITs). The effect the tax change will have on Canadian investors’ portfolios is something we’ve often discussed in our Canadian Wealth Advisor newsletter. When the income-tax benefits of Canadian income trusts are eliminated, some may convert to conventional corporations — the same structure as most common stocks. Others may choose to remain as trusts. Either way, some Canadian income trusts will cut their distributions. That’s because their cash available for distribution to unitholders will fall after they begin to pay corporate taxes and can’t pass it all on tax-free....

BANK OF NOVA SCOTIA $47.64 (Toronto symbol BNS: Shares outstanding: 992 million; Market cap: $47.3 billion; SI Rating: Above Average) is the third-largest of Canada’s five big banks, with assets of $513.6 billion. In the three months ended April 30, 2009, Bank of Nova Scotia’s revenue rose 13.4%, to $3.6 billion from $3.2 billion. However, earnings per share fell 16.5%, to $0.81 from $0.97. That’s because the bank raised its loan-loss provisions by 219.6%. Bank of Nova Scotia has the largest international operations of the big-five banks, with a third of its earnings coming from overseas. It prefers to focus on developing countries in Latin America and Asia, where it can quickly increase its earnings and market share....

TEMPLETON EMERGING MARKETS FUND $17.44 (New York symbol EMF; CWA Fund Rating: Speculative) is a closed-end fund that invests in equities from emerging economies. Franklin Templeton manages the fund. Templeton Emerging Market Fund’s holdings are spread around the world. Despite its volatility, the fund gives investors access to countries like Brazil, China, India and others that still have strong growth prospects. The $254.2-million fund’s largest holdings by country are: Brazil (16.6%), China (15.4%), Russia, (14%), Mexico (8.3%), South Africa (8.1%), India (7.3%) and South Korea (7.1%)....

NEW GERMANY FUND $9.91 (New York symbol GF; CWA Fund Rating: Speculative) is a closed-end fund that mostly invests in small- and mid-cap German equities. The fund’s manager is Deutsche Asset Management. The $210-million fund’s holdings operate in Germany (91%) and the Netherlands (9%). The New Germany Fund’s top holdings are European Aeronautical Defense (Netherlands: aerospace and defense), 5.9%; Bilfinger Berger (construction and engineering), 4.6%; United Internet (Internet service provider), 4.4%; Rheinmetall AG (an industrial conglomerate), 4.4%; GEA Group (chemicals), 4.3%; Software AG, 4.2%; Wacker Chemicals, 4.0%; MTU Aero Engines, 3.6%; Lanxess (specialty chemicals), 3.4%; and Hochtief AG (construction), 3.3%....

KOREA FUND $31.74 (New York symbol KF; CWA Fund Rating: Speculative) is a closed-end fund that invests at least 80% of its assets in Korean equities. Currently, it is entirely invested in South Korean stocks. RCM Asia Pacific manages the fund. Korea Fund’s top holdings are Samsung Electronics at 14.1%; Posco (steel), 5.7%; LG Electronics, 5.1%; LG Corp. (conglomerate), 4.8%; Hyundai Engineering & Construction, 3.5%; Daewoo International (conglomerate), 3.2%; Shinhan Financial, 3.2%; LG Display Company (LCD screens), 3.1%; KB Financial Group, 3.1%; and NCsoft (online computer games), 3.0%. The stocks in the Korea Fund’s $307.2-million portfolio are in the following industries: information technology (24%), industrials (24%), financial services (14%), consumer discretionary (14%), materials (8%), consumer staples (6%), telecommunications services (4%), health care (1%), and energy (1%)....

CENTRAL EUROPE AND RUSSIA FUND $27.69 (New York symbol CEE; CWA Fund Rating: Speculative) is a closed-end fund that mostly invests in larger cap stocks from Russia and central Europe. The fund’s manager is Deutsche Asset Management. The $394-million fund’s holdings are invested in Russia (55%), Poland (13%), Turkey (13%), Czech Republic (11%), Hungary (4%), Austria (3%) and Kazakhstan (1%). The fund’s top holdings are Gazprom (a Russian gas utility) at 10.2%; Lukoil (Russia: oil and gas), 8.5%; Rosneft Oil (Russia: oil and gas), 6.7%; Sberbank (Russia: bank), 6.2%; CEZ (Poland: utility), 5.4%; Mobile TeleSystems (Russia: wireless), 3.9%; MMC Norilsk Nickel (Russia: mining), 3.8%; Surgutneftagaz (Russia: oil and gas), 3.7%; Telefonica O2 (Czech Republic: telecom), 3.5%; and Telekomunikacja Polska (Poland: telecom), 3.2%....

AIC DIVERSIFIED CANADA FUND $34.89 (CWA Rating: Conservative) mainly holds shares of Canadian companies of average or above-average quality. It also holds some U.S. stocks. The $1.0-billion fund’s 10 largest holdings are TD Bank, Shoppers Drug Mart, Power Financial, Canadian Oil Sands Trust, First Capital Realty, Thomson Reuters Corporation, Brookfield Asset Management, Royal Bank of Canada, C.I. Financial Corp. and EnCana Corporation. AIC Diversified Canada holds just 21 stocks. The fund holds 43.9% of its assets in financial-services stocks. The rest of the portfolio breaks down as follows: energy, 15.2%; consumer staples, 10.6%; consumer discretionary, 8.0%; health care, 7.4%; and information technology, 3.6%....

AIC AMERICAN ADVANTAGE FUND $4.04 (CWA Rating: Aggressive) (AIC Group of Funds, 1375 Kerns Road, Burlington, Ont., L7R 4X8, 1-800-263-2144; Web site: www.aicfunds.com. Buy or sell through brokers) invests mostly in U.S. stocks. It holds 99% of its assets in the financial-services area. The fund’s financial holdings break down as follows: wealth management, 26.8%; life and health insurance, 20.9%; investment banking and brokerage, 11.9%; property and casualty insurance, 11.7%; diversified financial services, 7.3%; diversified banks, 7.1%; multi-line insurance, 6.3%; and consumer finance, 4.8%. The $30-million AIC American Advantage Fund’s top 10 holdings are JP Morgan Chase, Wells Fargo, AFLAC, Hartford Financial Services, Franklin Resources, Goldman Sachs, Bank of New York Mellon Corp., MetLife, Prudential Financial and Morgan Stanley. This fund holds just 17 stocks....

A few weeks ago, we asked TSI Network visitors whether they trade stocks online. A full 88% answered that they did. Some investors have made the switch from a full-service broker to Internet stock trading through a discount broker because it offers lower commission fees. Others have switched because they examined their results and discovered that their own investment ideas worked better than those of their brokers.

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Many investors consider annuities when they are planning their retirement investing. There are basically three types of annuities: Term-certain annuities are payable to you, or your estate, for a fixed number of years. Your estate will receive the payments even if you die. You could outlive this type of annuity....

On his Wealthy Boomer web site, Financial Post personal-finance columnist Jonathan Chevreau recently made the link between the time you start saving for retirement and when you will be able to start your retirement in earnest. Click here to read the full article on the Wealthy Boomer. Chevreau has been the personal-finance columnist at the Financial Post since 1996, and is the author or co-author of eight financial books, including The Wealthy Boomer and Findependence Day, released last fall. His Wealthy Boomer blog features interviews with investment experts (including Pat McKeough)....

When Inner Circle members ask us about specific investments and growth stock picks they’re considering buying or selling, we start by putting all the important information we know about a company into perspective. That new invention may be a marvel, but how does it compare to what the competition is doing? The new project sounds impressive, but how much impact will it really have on the company’s profit? The debt sounds high — will the company be able to keep up its agreed-upon interest and principal repayments? Investors intuitively understand this, but they often find it hard to apply when they are looking for strong growth stock picks. You can tackle the job with financial ratios, but the answers you get can be ambiguous, if not misleading. ...

Some U.S. bank stocks have reported surprising profits lately, and some have even begun to repay loans received under the U.S. government’s Troubled Asset Relief Program. However, the sector itself remains volatile. While we recommend some high-quality U.S. bank stocks in our Wall Street Stock Forecaster newsletter, we feel that you can cut your risk by not just investing in top bank stocks, but by investing in other types of financial companies, as well. In our most recent issue of Wall Street Stock Forecaster, we update our advice on U.S. tax-preparer H&R Block (New York symbol HRB)....

One of the most concrete things about an investment is its dividend yield — the percentage you get when you divide its current yearly dividend payment by its price. It’s an indicator we pay especially close attention to when we select stocks to recommend in our Canadian Wealth Advisor newsletter. But yield, high yield especially, can give you a false sense of security. Investors in high dividend stocks have a natural tendency to think that all investment income is nearly as safe and predictable as bank interest. In fact, investment income can dry up in a heartbeat. Companies are sometimes unable to honour their commitments, and they sometimes spring the bad news on you with no warning. Rather than a sign of a bargain, high yield may be a danger sign. It may mean insiders are selling and pushing the price down. A falling price makes yield go up (because you use the latest dividend to calculate yield). When an investment does cut or halt its dividend, its yield collapses....

H&R BLOCK INC. $17 (New York symbol HRB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 334.1 million; Market cap: $5.7 billion; Price-to-sales ratio: 1.4; WSSF Rating: Above Average) is the world’s largest provider of income-tax-preparation services. It operates 12,923 offices in the U.S., as well as 1,193 in Canada and 378 in Australia. Franchisees own 34% of H&R Block’s U.S. tax-preparation offices. The tax-services division accounts for 74% of the company’s revenue. The company gets 22% of its revenue by selling tax-consulting and accounting services to businesses though subsidiary RSM McGladrey Inc. The remaining 4% comes from banking services, including chequing accounts, loans and credit cards that H&R Block issues to its tax-preparation clients. H&R Block’s earnings fell from $1.88 a share (or a total of $635.9 million) in 2005 to $1.15 a share (or $374.3 million) in 2007. (H&R Block’s fiscal year ends April 30.) The drop was mainly caused by losses at its Option One subsidiary, which specialized in subprime mortgages to H&R Block’s tax clients and other borrowers. In 2008, the company sold Option One, along with its brokerage and wealth-management subsidiary, as part of its plan to focus on its more profitable tax and accounting operations. These moves helped H&R Block’s earnings improve to $1.53 a share (or $513.1 million) in fiscal 2009. The company’s revenue rose from $4.4 billion in 2005 to $4.9 billion in 2006, but dropped to $4.0 billion in 2007. It recovered to $4.4 billion in 2008, but fell to $4.1 billion in 2009....