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POWER CORPORATION $31.55 (Toronto symbol POW; SI Rating: Above average) is a diversified holding company. Power Corp. controls one of Canada’s largest mutual-fund companies, IGM Financial, and Great-West Lifeco, one of the largest life insurers. Power Financial, 66.4% held, is a holding company for Power Corp.'s financial assets, including 72.9% of Great-West Lifeco and 58.4% of IGM Financial. As well, Power Financial holds 50% of Parjointco, which in turn owns a 54.3% interest in Swiss-listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European companies: Imerys (minerals), Total SA (oil), Pernod Ricard (wine and spirits), Suez (energy, water and waste services) and Lafarge SA (cement and building materials). In the three months ended June 30, 2008, Power Corp.'s earnings excluding one-time items rose 3.5%, to $382 million or $0.82 a share, from $369 million or $0.79. Great-West Lifeco contributed $254 million to earnings and IGM Financial contributed $88 million....

VERIZON COMMUNICATIONS INC. $31 (New York symbol VZ; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 2.9 billion; Market cap: $89.9 billion; WSSF Rating: Average) provides telephone services to over 140 million customers in 28 states. Through 55%-owned Verizon Wireless, a joint venture with UK-based Vodafone, it also has 59 million wireless subscribers in 50 states. Verizon’s wireless operations supply about half of its revenues, but 75% of its profits. These figures should rise now that Verizon Wireless has agreed to buy privately held Alltel Corp., which provides wireless services to 13 million customers in mainly rural areas of 34 states. The purchase will make Verizon Wireless the largest wireless provider in the United States, with over 80 million customers. Verizon Wireless will pay $5.9 billion in cash and assume Alltel’s debt of $22.2 billion, for a total price of $28.1 billion. Verizon’s share works out to $15.5 billion. Verizon feels the merger will generate annual cost savings of $1 billion in the second year after closing....

APACHE CORP. $113 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 334.5 million; Market cap: $37.8 billion; WSSF Rating: Average) explores for and produces oil and gas, mostly in North America. It also has operations in the UK, Argentina, Australia and Egypt. Oil accounts for about 67% of its production. Thanks to record high oil and gas prices, Apache’s earnings in the three months ended June 30, 2008 jumped to $4.28 a share (total $1.4 billion) from $1.89 a share ($632.1 million) a year earlier. Cash flow per share rose 57.0%, to $6.94 from $4.42. Revenue grew 57.7%, to $3.9 billion from $2.5 billion. Apache prefers to sell its oil at spot prices, instead of using supply contracts or hedges to lock in prices. Thanks to this strategy, Apache’s stock shot up to $149 in May, 2008, but has since moved down to its current price on lower oil prices....

ENCANA CORP. $70 (New York symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 750.2 million; Market cap: $52.5 billion; WSSF Rating: Average) is a major North American producer of natural gas (about 80% of total production) and oil (20%). EnCana prefers to focus on what it calls “key resource plays”, including early-stage natural gas fields and oil sands projects. These assets cost more to develop, at least initially, but can last decades longer than conventional properties. The stock rose to a new peak $99 in May, 2008, partly due to EnCana’s plan to split itself up into two companies — one focusing on natural gas, the other on oil sands and oil refineries. Stockholders will receive one new common share in each new company for every EnCana share they hold. EnCana aims to complete the plan early next year....

CHEVRON CORP. $85 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.1 billion; Market cap: $178.5 billion; WSSF Rating: Above average) is the secondlargest integrated oil company in the United States after ExxonMobil. Production accounts for about 80% of its earnings. The remaining 20% comes from refineries and retail gas stations. Chevron’s revenue in the second quarter of 2008 rose 47.9%, to $83.0 billion from $56.1 billion a year earlier. However, earnings rose just 15.1%, to $2.90 a share (total $6.0 billion) from $2.52 a share ($5.4 billion). That’s mainly because Chevron’s refineries had to pay about 70% more for crude oil. Due to the combination of lower sales and higher operating costs, the company’s U.S. refineries lost $682 million in the latest quarter. Cash flow per share in the quarter rose 29.4%, to $7.66 from $5.92. The stock hit a new all-time high of $105 in May, 2008, but fell to $78 in September as oil prices fell to about $90 a barrel. However, the stock has moved up to its current price due to the recent surge in oil to $110 a barrel....

YUM! BRANDS INC. $35 (New York symbol YUM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 468.7 million; Market cap: $16.4 billion; WSSF Rating: Average) operates over 35,000 restaurants in over 100 countries. It has five main banners: KFC (fried chicken), Pizza Hut, Taco Bell (Mexican food), A&W (hamburgers) and Long John Silver (seafood). Like McDonald’s, most of Yum’s recent growth comes from its overseas operations. Its fastest-growing division is China, which now accounts for 25% of its revenue and earnings. Yum’s U.S. operations supply 45% of its revenue and earnings, while its international division (excluding China) supplies the remaining 30%. The company’s revenue grew from $8.4 billion in 2003 to $10.4 billion in 2007. Earnings grew 44.7%, from $628.0 million in 2003 to $909.0 million in 2007. Earnings per share rose 63.1%, from $1.03 in 2003 to $1.68 in 2007, on fewer shares outstanding....

MCDONALD’S CORP. $61 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.1 billion; Market cap: $67.1 billion; WSSF Rating: Above average) operates over 31,400 fast food restaurants in 118 countries. Much of McDonald’s recent growth comes from its overseas operations, which provide two-thirds of its sales and half of its earnings. That’s mainly because growing prosperity is making the company’s products more affordable in developing countries. The higher value of most foreign currencies compared with the U.S. dollar has also expanded the contribution from McDonald’s international operations. The company also continues to enjoy the benefits from a major overhaul of its operations in 2002. This included slowing the growth of new stores. Instead, it focused on re-modeling older stores to encourage repeat visits. It also added healthier foods such as salads to its menu, to appeal to health-conscious consumers who usually avoid fast food. McDonald’s also sold its investments in several casual dining chains....

WINDSTREAM CORP. $11 (New York symbol WIN; Income Portfolio, Utilities sector; Shares outstanding: 439.6 million; Market cap: $4.8 billion; WSSF Rating: Average) provides local and long distance telephone service to 3.1 million customers in 16 states. Most of its customers are in rural areas. Windstream has no wireless operations, so it aims to spur growth with high-speed Internet services. Recent upgrades to its systems have expanded high-speed availability to 93% of its customers. Just 45% of its residential customers currently use highspeed service, so there’s lots of room to grow. As well, Windstream’s focus on rural areas limits competition from larger phone and cable companies....

AT&T INC. $29 (New York symbol T; Income Portfolio, Utilities sector; Shares outstanding: 5.9 billion; Market cap: $171.1 billion; WSSF Rating: Average) provides traditional local and long-distance telecommunication services to over 59 million customers in 22 states. It also has 73 million wireless subscribers nationwide, and 14.7 million high-speed Internet customers. Unlike Verizon, AT&T gets just half of its earnings from its wireless business. However, demand for its wireless services is growing strongly. That’s partly due to AT&T’s exclusive deal to sell Apple’s iPhone. AT&T offers the iPhone at a discount to entice customers to sign a long-term contract. As part of a new deal with Apple, AT&T will now pay more to subsidize the initial cost of the latest version of the device. However, the new iPhone can access the Internet and receive email much more quickly than the older version. Rising revenues from Internet use should help AT&T offset the higher subsidies....

EUROPEAN GOLDFIELDS $3.06 (Toronto symbol EGU; SI Rating: Speculative) (44 (20) 7408 9534; www.egoldfields.com; Shares outstanding: 179.4 million; Market cap: $548.9 million) holds a 95% interest in Hellas Gold. Hellas owns three gold and base metal deposits in Northern Greece. The deposits are the Stratoni zinc/ lead/silver property, the Olympias gold/zinc/lead/silver project and the Skouries copper/gold property. Production started at Stratoni in September 2005. Permits to develop the Skouries and Olympias projects are moving steadily forward. European Goldfields also owns 80% of the Certej gold/silver project in Romania, where it has completed a positive feasibility study, and applied for environmental approval and a mining permit. The company also owns 51% of a joint venture developing a goldcopper project in northeastern Turkey....

NEW GOLD $4.20 (Toronto symbol NGD; SI Rating: Speculative) (888-315-9715; www.newgold.com; Shares outstanding: 212.1 million; Market cap: $891.0 million) is the result of the merger completed on June 30, 2008 of three companies: Peak Gold, symbol PIK on Toronto, Metallica Resources, symbol MR on Toronto, and New Gold, symbol NGD on Toronto. New Gold operates three mines: the Peak gold/ copper mine in Australia, the Cerro San Pedro gold/ silver mine in Mexico and the Amapari gold mine in Brazil. New Gold expects to produce 297,000 ounces of gold in 2008 and 350,000 ounces in 2009. The company also has $319 million in cash to expand production at the Amapari mine, to develop the El Morro gold/copper mine in Chile and to develop the gold/ silver/copper Afton mine in British Columbia....

IAMGOLD $5.94 (Toronto symbol IMG; SI Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 295.6 million; Market cap: $1.8 billion) has interests in eight operating gold mines: 100% of the Mupane gold mine in Botswana, 38% of the Sadiola gold mine and 40% of the Yatela gold mine, both located in Mali, 18.9% interests in both the Tarkwa and Damang gold mines in Ghana, 100% of the Doyon mine and the Sleeping Giant mine, both in Quebec, and 100% of the Rosebel mine in Suriname, South America. IAMGold also a 1% royalty interest in the Diavik diamond mine in northern Canada and 100% of the Niobec niobium mine in Quebec. It has development projects and exploration activities in Africa, as well as in North and South America. The company reported a sharp rise in cash flow in the three months ended June 30, 2008, to $70.5 million or $0.24 a share, from $23 million or $0.08 a share (All figures except share price and market cap in U.S. dollars.) Revenues rose 34.5%, to $225.1 million from $167.3 million, largely due acquisitions....

YAMANA GOLD $9.99 (Toronto symbol YRI; SI Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 699.5 million; Market cap: $7.0 billion) owns and operates seven operating mines in five countries in North and South America, along with interests in two others plus five development stage properties. It also holds extensive exploration properties. Yamana’s revenues in the three months ended June 30, 2008 rose 83.5%, to $336.9 million from $183.7 million a year earlier. (All figures except share price and market cap in U.S. dollars.) Last year’s acquisitions of Meridian Gold and Northern Orion Resources accounted for most of the increase. Cash flow rose 94.1%, to $176.5 million from $90.9 million. However, cash flow per share was unchanged at $0.26 due to a 93.3% rise in shares outstanding following the acquisitions. Excluding onetime items, earnings per share fell 31.8%, to $0.15 from $0.22....

DIAMONDS NORTH RESOURCES $0.60 (Toronto symbol DDN; SI Rating: Start-up) (1-866-802-2010; www.diamondsnorthresources.com; Shares outstanding: 74.4 million; Market cap: $44.7 million) has interests in 10 projects covering over eight million exploration acres in Nunavut and the Northwest Territories. Its prospects range from early to advanced-stage exploration. Diamonds North’s leading prospect is its 100%- held Amuruk project in Nunavut. To date, the company has discovered 22 kimberlites, of which drilling on two has produced microdiamonds and some macrodiamonds. Diamonds North is now conducting bulk samples on the property to test for a higher-percentage of more commercially viable macro-diamonds. The company is also at an advanced stage with its Hepburn project in the Northwest Territories, where it has identified over 200 drilling targets. Diamonds North’s other active project is on Banks Island in the Northwest Territories, where airborne surveys have identified a number of anomalies that it believes are kimberlite pipes. De Beers Canada is active in the area....

STORNOWAY DIAMOND CORP. $0.22 (Toronto symbol SWY; SI Rating: Start-up) (1-888-338-2200; www.sornowaydiamonds.com; Shares outstanding: 227.2 million; Market cap: $50.0 million) holds interests in over 14 diamond exploration properties in Canada and one in Botswana. TSE-listed Agnico-Eagle holds a 17.7% interest in the combined company. Global mining giant Rio Tinto Limited holds an 11.2% interest. Stornoway’s projects include a 50% interest in the Renard diamond project in Quebec, which has the potential to become Quebec’ s first diamond mine. Bulk sampling has produced promising carat-grade recoveries. The project is now in the pre-feasibility stage to define a total resource estimate. Renard is the company’s most advanced project, but close behind is the Aviat project on the Melville Peninsula in the eastern Arctic. This project is a joint venture between Stornoway (90%) and Hunter Exploration (10%). The partners have discovered 12 kimberlites at the Aviat project. Early results have shown high sample grades of diamonds....

CANADIAN NATIONAL RAILWAY CO. $55 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 473.4 million; Market cap: $26.0 billion; SI Rating: Above average) operates a freight rail network across Canada, and in parts of the U.S. In the three months ended June 30, 2008, CN’s earnings fell 11.0%, to $459 million from $516 million a year earlier. Per-share earnings fell just 5.9%, to $0.95 from $1.01, on fewer shares outstanding. The company’s U.S. operations supply about 20% of its revenue, and the high value of the Canadian dollar cut CN’s earnings in the latest quarter by $0.05 a share. Revenue grew 3.5%, to $2.1 billion from $2.0 billion a year earlier. Higher volumes of grain, coal and petrochemicals helped offset lower shipments of lumber and automobiles. CN’s operating ratio weakened to 66.3% from 60.0% a year earlier, due to higher fuel costs. CN’s earnings should grow to $3.49 a share in 2008, and the stock trades at 15.8 times that estimate. The $0.92 dividend yields 1.7%....

CANADIAN PACIFIC RAILWAY LTD. $61 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 155.1 million; Market cap: $9.5 billion; SI Rating: Above average) transports freight over a rail network between Montreal and Vancouver. It also connects to major hubs in the United States. Due to rising fuel costs and lower shipments of automobiles and forest products, CP’s earnings in the second quarter of 2008 fell 13.4%, to $0.97 a share from $1.12 a year earlier. These figures exclude non-recurring items. Revenue was unchanged at $1.2 billion. CP’s operating ratio (regular operating costs divided by revenue — the lower, the better) rose to 79.4% from 74.7%. The company now aims to improve its long-term efficiency by increasing average train speeds, sharing more tracks with other railways and reducing waiting times in terminals....

DUNDEE CORP. $13 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 74.6 million; Market cap: $969.8 million; SI Rating: Average) is a holding company with subsidiaries in three main areas: wealth management, real estate and resources. Its main asset is its 49% stake (63% voting interest) in DundeeWealth Inc., which offers wealth management services and owns the Dynamic family of mutual funds. DundeeWealth manages $63.1 billion worth of assets. DundeeWealth recently completed its purchase of a 60% interest in Toronto-based pension fund manager Aurion Capital Management. It also acquired an 89% interest in BHR Fund Advisors, a Philadelphia-based mutual fund manager and distributor. The two purchases broaden Dundee- Wealth’s investment management capabilities, and diversify its sales distribution network. In the three months ended June 30, 2008, Dundee Corp.'s earnings fell sharply, to $0.08 a share from $0.20 a year earlier. Revenue fell 8.5%, to $286.1 million from $312.6 million....

HOME CAPITAL GROUP INC. $35 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.5 million; Market cap: $1.2 billion; SI Rating: Average) is the parent company of Home Trust Company, a federally regulated trust company. It provides financial services such as chequing accounts, mortgages and credit cards. Home Capital is more risky than Great-West and IGM Financial. That’s because it focuses on customers that usually have trouble meeting the stricter lending requirements of larger banks. But we feel its strong growth prospects help offset this risk. The company now aims to spur its growth by offering traditional mortgages. While that puts it in direct competition with the big banks, Home Capital feels this move will strengthen its position among mortgage brokers....

IGM FINANCIAL INC. $45 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 263.5 million; Market cap: $11.9 billion; SI Rating: Above average) is Canada’s largest independent mutual fund company, with $118.2 billion in assets under administration. Power Corp. controls 55.9% of IGM’s shares. The company has three main divisions. Investors Group sells funds through its own network of over 4,000 financial advisors. Mackenzie Financial sells its funds through independent brokers. IGM also owns 74.5% of IPC Financial, whose 540 advisors provide a range of wealth management services. IGM recently agreed to buy Saxon Financial Inc. for $287 million. Saxon provides wealth management services to individuals and institutions, and had $13.4 billion in assets under management at June 30, 2008. Saxon’s exclusive relationship with the Canadian Medical Association, holders of 30% of Saxon, also adds to its appeal....

GREAT-WEST LIFECO INC. $32 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 894.4 million; Market cap: $28.6 billion; SI Rating: Above average) is Canada’s largest insurance company, with assets under administration of $392.8 billion. The company also provides retirement planning and wealth management services. Power Corp. controls 70.6% of Great-West’s shares. The company recently sold its U.S. health care business for $1.3 billion. This business faces strong competition from larger insurers, whose size lets them negotiate better terms with medical service suppliers, so selling it made sense. The cash will help Great- West fund last year’s purchase of struggling U.S.-based mutual fund manager Putnam Investment Trust. Putnam increases Great-West’s exposure to volatile stock markets. However, the acquisition gives it an opportunity to market its products to Putnam’s large client base....

TELUS CORP. (Toronto symbols T $40 and T.A $39; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 335.6 million; Market cap $13.4 billion; SI Rating: Above average) provides local and long distance telephone service to 4.3 million customers in Alberta, British Columbia and Eastern Quebec. This business supplies about 29% of Telus’s revenue. The company also operates a national wireless communication network with 5.8 million subscribers. The wireless business accounts for 47% of its revenue. The remaining 24% of Telus’s revenue comes from providing Internet service to individuals and businesses. It has 1.1 million high-speed Internet subscribers....

AIC DIVERSIFIED CANADA FUND $42.87 (CWA Rating: Conservative) mainly holds shares of Canadian companies of average or above-average quality. It also holds stocks of some U.S. firms. The $1.0 billion fund’s 10 largest holdings are Power Financial, Canadian Oil Sands Trust, TD Bank, Shoppers Drug Mart, FedEx, Thomson Reuters Corporation, Brookfield Asset Management, Royal Bank of Canada, Manulife Financial and Johnson & Johnson. AIC Diversified Canada holds just 17 stocks. The fund holds 49.6% 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%; Industrials, 3.6%; and Conglomerates, 2.3%....

AIC AMERICAN ADVANTAGE FUND $5.70 (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, with over 99% of assets in the financial services area. The fund’s holdings in this segment break down as follows: Property & casualty insurance companies, 20.9%; Life & health insurance, 15.0%; Multi-line insurance, 14.5%; Investment banking & brokerage, 12.5%; Diversified financials, 9.1%; Diversified banks, 9.0%; Wealth management, 7.7%; and Consumer finance, 7.1%. The $48.9 million AIC American Advantage’s top 10 holdings are AEC Limited, AFLAC, Hartford Financial Services, Prudential Financial, JP Morgan Chase, Wells Fargo, American Express, American International Group, Merrill Lynch & Co. and The Progressive Corporation. This fund holds just 17 stocks....

H&R REAL ESTATE INVESTMENT TRUST $17.88 (Toronto symbol HR.UN; SI Rating: Extra risk) holds interests in 34 office properties, 124 industrial properties and 129 retail properties comprising over 43 million square feet. Over half of H&R’s properties are in the Greater Toronto Area. The rest are elsewhere in Ontario, in Quebec, western Canada and the United States. The company now has an industry-leading portfolio occupancy rate of 99.2%. Revenue in the three months ended June 30, 2008 was $151.3 million, up 6.1% from $142.5 million a year earlier. Cash flow per unit was unchanged at $0.40. H&R’s annual distribution of $1.44 gives the units a yield of 8.1%. H&R REIT is a buy.