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GREAT-WEST LIFECO $34.17 (Toronto symbol GWO; SI Rating: Above-average) is a leading Canadian insurance company, with $212 billion in assets under administration. The company also provides wealth management and other financial services. It also operates in the U.S. and Europe. Power Financial controls about 75% of Great-West. Great-West’s earnings in the three months ended June 30, 2007 rose 18%, to $544 million or $0.61 a share from $461 million or $0.52. Revenues fell 30%, to $4.6 billion from $6.6 billion on new accounting rules for investments. The shares yield 3.0%. The $3.9 billion U.S. acquisition of U.S.-based investment management firm and mutual fund company Putnam Investments Trust will close shortly. The purchase will more than double Great-West’s assets under administration. Great-West is also making a series of small acquisitions aimed at expanding its share of the employer-sponsored health insurance market in the United States....

SUN LIFE FINANCIAL $50.16 (Toronto symbol SLF; SI Rating: Above-average) offers savings, retirement, pension and life and health insurance products and services to individuals and corporations. The company operates mainly in Canada, the U.S. and the UK, and also in Asia, China and India. It has assets under administration of $435 billion. In the three months ended June 30, 2007, Sun Life’s earnings rose 15.2%, to $590 million or $1.03 a share, from $512 million or $0.88 a year earlier. Revenue fell 27.8%, to $4.5 billion from $6.2 billion, due to new accounting rules for investments. Sun Life has raised its quarterly dividend by 6.3%, to $0.34 from $0.32. The shares now yield 2.6%....

QUAKER CHEMICAL CORP. $23 (New York symbol KWR; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.0 million; Market cap: $230.0 million; WSSF Rating: Average) is a small company that is prominent in a small industry. It makes lubricants and specialty chemicals that protect industrial machinery from corrosion. It sells these products mostly to steel, automotive and appliance makers in the United States and Europe. Overseas markets account for 55% of total sales. Most investors have probably never heard of Quaker, and few brokers cover it. But the company is a leader in its niche markets, and has a long history of rising sales and earnings....

NVIDIA CORP. $44 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 362.9 million; Market cap: $16.0 billion; WSSF Rating: Average) makes graphic chips for computers, video game players and cellphones. These chips make games run smoother, and video images appear more lifelike. Option problems forced Nvidia to cut its reported pre-tax income between 1999 and 2006 by about $150 million. In its first fiscal quarter ended April 29, 2007, Nvidia’s earnings grew 37.5%, to $0.33 a share (total $132.3 million) from $0.24 a share ($92.1 million) a year earlier. Revenue rose 23.8%, to $844.3 million from $681.8 million, thanks to strong demand for its new high-end video chips....

AUTODESK INC. $44 (Nasdaq symbol ADSK; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 231.2 million; Market cap: $10.2 billion; WSSF Rating: Average) makes software that engineers and architects use to design machinery and buildings. The company has completed its review of its stock option plan, which cut its pre-tax earnings by an aggregate of $34.8 million from January 1988 to August 2006. It is now up-to-date with its financial reporting. In its first fiscal quarter ended April 30, 2007, Autodesk earned $0.34 a share (total $83.3 million), up 70.0% from $0.20 a share ($48.5 million) a year earlier. If you disregard unusual items, it would have earned $0.44 a share in the latest quarter. Revenue rose 16.7%, to $508.6 million from $436.0 million....

TIM HORTONS INC. $32 (New York symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 189.7 million; Market cap: $6.1 billion; WSSF Rating: Extra risk) operates over 2,700 coffee-and-donut shops in Canada, and 340 in the United States. Franchisees operate 97% of its stores. The company was a wholly owned subsidiary of Wendy’s International Inc. up until April 2006. That’s when it sold shares to the public at $23.162 each. In October, Wendy’s handed out its remaining Tim Hortons stock as a tax-deferred dividend. Investors received 1.3542759 shares for every Wendy’s share held....

YUM! BRANDS INC. $34 (New York symbol YUM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 520.0 million; Market cap: $17.7 billion; WSSF Rating: Average) operates over 34,000 restaurants in 100 countries. Banners include KFC (chicken), Pizza Hut, Taco Bell (Mexican food), Long John Silver’s (seafood) and A&W (hamburgers). Most of Yum’s recent growth has come from its overseas operations, particularly in China where it owns 2,300 KFC and 370 Pizza Hut outlets. This division now accounts for 20% of Yum’s revenue. Other overseas operations provide 30% of its revenue, while the United States accounts for 50%. Thanks to a 7% rise in same-store sales at its China division, plus a 5% gain at its other international operations, Yum’s sales in the second quarter of 2007 grew 9.1%, to $2.4 billion from $2.2 billion. Same-stores sales in the U.S. were flat due to a food safety scare at some Taco Bell restaurants in the northeast....

MCDONALD’S CORP. $51 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.2 billion; Market cap; $61.2 billion; WSSF Rating: Above average) operates over 31,000 fast-food restaurants in 120 countries. Overseas operations account for two-thirds of its sales, and 40% of profits. The company owns about 25% of its restaurants, but aims to convert them into franchises over the next few years. Consequently, it recently sold 1,600 of its outlets in Latin America and the Caribbean. It received $700 million in cash, but recorded a non-cash $1.6 billion loss on the sale. We think the sale makes sense. Local owners have a better knowledge of local tastes, and can adjust their menus to maximize sales. They will also assume responsibility for capital spending....

MCKESSON CORP. $59 (New York symbol MCK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 297.0 million; Market cap: $17.5 billion; WSSF Rating: Above average) is the largest wholesale distributor of pharmaceutical drugs in the United States and Canada. It also owns 49% of Mexico’s leading drug distributor. Customers include hospitals and retail pharmacies. It also distributes health and beauty items, and surgical supplies. McKesson’s revenues jumped from $42.3 billion in 2002 (fiscal years end March 31) to $93.0 billion in 2007, or 21.8% compounded annually. Profits before unusual items rose from $1.96 a share (total $572.4 million) in 2002 to $2.19 a share ($646.5 million) in 2003. Profits dipped to $2.18 a share ($653.3 million) in 2004, but rose to $2.89 a share ($885.0 million) in 2007. Part of McKesson’s recent success comes from a change in the way it buys drugs from pharmaceutical companies. Under the old method, it would buy more drugs than it needed, and hope to sell them later at higher prices. Now it charges drugmakers an inventory- handling fee. This better aligns its inventory with its customers’ needs, cuts handling costs and reduces McKesson’s risk....

CANADIAN IMPERIAL BANK OF COMMERCE $95 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 337.5 million; Market cap: $32.1 billion; SI Rating: Above average) has assets of $326.6 billion, which makes it the smallest of Canada’s big five banks. It operates roughly 1,100 branches in Canada. Thanks to strong gains from its credit card and mortgage businesses, CIBC’s profits before unusual items in its second fiscal quarter ended April 30, 2007 rose 18.4%, to $1.93 a share (total $657 million) from $1.63 a share ($585 million) a year earlier. CIBC’s purchase of a controlling interest in FirstCaribbean International Bank added $0.05 a share to the latest quarterly earnings. Revenue rose 8.9%, to $3.05 billion from $2.8 billion. In the past few years, CIBC has cut back its corporate lending, so it can focus on its less-risky retail business. Corporate lending now accounts for about 25% of its business, down from 35% three years ago....

BANK OF MONTREAL $69 (Toronto symbol BMO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 500.0 million; Market cap: $34.5 billion; SI Rating: Above average) is the fourth-largest bank in Canada, with $356.5 billion in assets. The bank has roughly 1,200 branches in Canada, and aims to add at least 15 branches in fiscal 2007 as part of a new restructuring plan. That should help it regain some of the business it lost to other banks in the past few years. It’s also reducing some of its back office staff. The restructuring should eventually cut its annual expenses by $300 million a year. However, problems at its commodities trading operations led to a $327 million loss on some natural gas futures contracts. Bank of Montreal is currently working to cut the risk of its trading portfolio, so further charges are possible....

TORONTO-DOMINION BANK $72 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 719.9 million; Market cap: $51.8 billion; SI Rating: Above average) is the third-largest bank in Canada, with assets of $396.7 billion. It operates over 1,000 branches in Canada. Like Royal, TD is expanding in the United States. It recently paid $3.2 billion U.S. for the 41% of subsidiary TD Banknorth that it did not already own. Banknorth operates about 600 branches in the U.S. northeast. It has struggled lately in the face of strong competition from larger banks. TD has a long history of successfully integrating acquisitions. Owning all of Banknorth should make it easier for it to close under-performing branches and cut credit losses....

BANK OF NOVA SCOTIA $51 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 990.0 million; Market cap: $50.5 billion; SI Rating: Above average) ranks second among Canada’s five big banks, with assets of $411.7 billion. It has over 1,000 branches and offices in Canada. In the past few years, Bank of Nova Scotia has focused on building up its operations in developing markets such as Latin America and Asia. International operations now provide 30% of its income. Demand for banking services is growing strongly in these regions as economic reforms take hold. Bank of Nova Scotia’s expertise gives it an edge over domestic banks in these countries. It lets the bank quickly improve its market share and profits. Recent overseas expansion includes the purchase of 24% of Thailand’s eighth-largest bank, and the opening of four new branches in Malaysia....

ROYAL BANK OF CANADA $56 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $72.8 billion; SI Rating: Above average) is the largest of Canada’s big five banks, with total assets of $589.1 billion. It provides a wide range of financial services through over 1,300 branches in Canada, and 34 other countries. International operations account for 10% of Royal’s total revenue. Royal sees limited opportunities in Canada, so it has used acquisitions in the U.S. to fuel its growth in the past few years. Its U.S. retail banking operation, RBC Centura, now operates 270 branches in six southeast states. RBC Dain Rauscher is one of the top full-service brokerage firms in the U.S., with over 670,000 clients....

AIC DIVERSIFIED CANADA FUND $46.42 (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 $1.6 billion fund’s 10 largest holdings are Power Financial, Canadian Oil Sands Trust, TD Bank, Shoppers Drug Mart, Johnson & Johnson, Thomson Corporation, Brookfield Asset Management, Royal Bank, Manulife Financial and Royal Bank of Scotland. AIC Diversified Canada Fund holds just 23 stocks. The fund holds 53.6% of its assets in Financial services stocks. The rest of the portfolio breaks down as follows: Consumer staples, 16.1%; Energy, 8.2%; Consumer discretionary, 7.5%; Health care, 7.0%, Industrials, 3.0%; Information technology, 2.3%; and Conglomerates, 1.5%....

AIC AMERICAN ADVANTAGE FUND $7.73 (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. This segment breaks down as follows: Life & health insurance, 17.8%; Property & casualty insurance companies, 14.2%; Investment banking & brokerage, 13.2%; Multi-line insurance, 12.9%; Diversified banks, 10.9%; Diversified financials, 6.7%; Wealth management, 6.6%; Insurance brokers, 6.2%; Consumer finance, 4.3%; Regional banks, 3.6%; Thrifts & mortgage finance, 3.5%; and Conglomerates, 0.8%. The $115.5 million AIC American Advantage’s top 10 holdings are Morgan Stanley, JP Morgan Chase, American International Group, Manulife Financial, AFLAC, Hartford Financial Services, TD Bank, Northern Trust, Merrill Lynch and Willis Group Holdings. This fund holds just 19 stocks....

SCOTIA CANADIAN GROWTH FUND $72.43 (CWA Rating: Conservative) (Scotia Securities, 40 King Street West, 6th Floor, Toronto, Ontario M5H 1H1. 1-800-268-9 269; Website: www.scotiabank.com. No load — deal directly with the company.) uses fundamental analysis to identify what the managers see as investments that have the potential for above-average growth. The $614.0 million Scotia Canadian Growth Fund’s 10 largest holdings are Manulife Financial, Suncor Energy, Royal Bank, TD Bank, Goldcorp, Nexen, Bank of Montreal, BCE Inc., Bank of Nova Scotia and Alcan. Scotia Canadian Growth currently holds 31% of its portfolio in the Financial services industry. Its next-largest holding is Energy at 22%....

CIBC CANADIAN EQUITY FUND $27.77 (CWA Rating: Conservative) (CIBC Securities, 5140 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7. 1-800-631-7008; Website: www.cibc.com. No load — deal directly with the company.) uses a “bottom-up” approach (using fundamentals such as earnings, cash flow and low debt) to identify companies that trade at reasonable valuations and yet have growth potential. The $662.8 million fund’s top holdings are Petro- Canada, EnCana, Manulife Financial, Teck Cominco, Bank of Nova Scotia, TD Bank, Canadian National Railway, Brookfield Asset Management, BCE Inc. and Alcan. CIBC Canadian Equity holds 38% of its portfolio in Financial services stocks and 25% in Energy stocks....

RBC CANADIAN EQUITY FUND $29.54 (CWA Rating: Conservative) (RBC Funds, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.royalbank.com. No load — deal directly with the bank) invests mostly in larger-capitalization stocks, but also looks for opportunities in small and mid-cap stocks. The fund’s 10 largest holdings are TD Bank, Manulife Financial, Bank of Nova Scotia, Royal Bank, EnCana, Canadian Natural Resources, Suncor Energy, Alcan, CIBC and Bank of Montreal. The $5 billion fund holds 32% of its holdings in Financial stocks. It also holds 25% in Energy stocks. Over the last ten years, RBC Canadian Equity posted a 10.4% annual rate of return. That’s about equal to the S&P/TSX’s gain of 10.1%. The fund made 22.7% over the last year, equal to the gain of 22.7% for the S&P/TSX. The fund’s MER is 1.99%....

BMO EQUITY FUND $33.88 (BMO Mutual Funds, 77 King Street West, Suite 4200, Royal Trust Tower, Toronto, Ont., M5K 1J5, 1-800-665-7700; Web site: www.bmo.com. No load — deal directly with the bank) (CWA Rating: Conservative) generally invests mostly in ‘blue-chip” Canadian companies. These stocks are selected based on the manager’s outlook for the industry they operate in, the earnings record of each company, the strength of management and the potential for growth. BMO Equity Fund’s 10 largest holdings are Manulife Financial, Suncor Energy, Royal Bank, TD Bank, Sun Life Financial, EnCana Corporation, Alcan, Potash Corporation, CIBC and Bank of Nova Scotia. The $2.3 billion fund currently holds 33% of its portfolio in the Financial services industry. Its next-largest holding is Energy at 22%....

TD CANADIAN EQUITY FUND $32.70 (CWA Rating: Conservative) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.tdcanadatrust.ca. No load — deal directly with the bank) uses a “bottom-up” approach (using fundamentals such as earnings, cash flow and low debt) to identify undervalued companies with strong growth potential. TD Canadian Equity Fund’s 10 largest holdings are Royal Bank, Suncor Energy, TD Bank, Rogers Communications, Alcan, Canadian Oil Sands Trust, CN Railway, Ivanhoe Mines, Goldcorp and EnCana. The $3.1 billion fund currently holds about 27% of its portfolio in Financial services shares. It also has a bias towards Energy stocks, with 27% of its holdings in that sector....

VERIZON COMMUNICATIONS INC. $41 (New York symbol VZ; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 2.9 billion; Market cap: $118.9 billion; WSSF Rating: Average) provides local and long distance telephone service to over 45 million customers in 28 states. It also provides communication systems to businesses, and owns 55% of Verizon Wireless, which has 60.6 million customers in 50 states. In 2004, the company began a major upgrade of its traditional phone networks. Called FiOS (Fiber- Optic Service), this project aims to eventually replace the copper wires with modern fiber optic lines all the way to its customers’ homes....

AT&T INC. $40 (New York symbol T; Income Portfolio, Utilities sector; Shares outstanding: 6.2 billion; Market cap: $248.0 billion; WSSF Rating: Average) provides telecommunication services to over 65.4 million customers in 22 states. In December 2006, AT&T bought rival phone company BellSouth Corp. for $66.8 billion in stock. That gave it full ownership of AT&T Mobility (formerly Cingular), the largest wireless provider in the United States with more than 62.2 million subscribers. Thanks to the new operations, income doubled in the first quarter of 2007, to $2.8 billion from $1.4 billion a year earlier. Per-share earnings grew just 21.6%, to $0.45 from $0.37, due to the extra shares outstanding. Due to the timing of the merger, its revenue grew 83.5%, to $29.0 billion from $15.8 billion. If the company had completed the merger at the start of 2005, revenue would have risen just 1.7% in 2006....

WINDSTREAM CORP. $15 (New York symbol WIN; Income Portfolio, Utilities sector; Shares outstanding: 477.2 million; Market cap: $7.2 billion; WSSF Rating: Average) provides local telephone and other communication services to over 3 million customers in 16 states. Most of its customers are in rural areas. Windstream took its present form in July 2006 when Alltel Corp. merged its traditional telephone operations with Valor Communications Group Inc. In the three months ended March 31, 2007, earnings fell 11.4%, to $99.9 million from $112.8 million a year earlier. Per-share income fell 25.0%, to $0.21 from $0.28, due to an 18% jump in the number of shares outstanding. Revenue grew 11.5%, to $783.7 million from $703.0 million. If you assume the merger occurred at the start of 2005 and disregard restructuring costs, Windstream’s revenue would have grown 1.9%....

KRAFT FOODS INC. $36 (New York symbol KFT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.6 billion; Market cap: $57.6 billion; WSSF Rating: Above average) is the world’s second-largest food company, after Nestle. It owns some of the industry’s top brands, including Kraft (cheese), Maxwell House (coffee), Nabisco (biscuits and cookies), Post (cereals) and Oscar Meyer (meats). North America accounts for two-third of its sales. The company was a 100%-owned subsidiary of Altria Group Inc. up to June 2001. That’s when Altria sold about 12% of Kraft’s shares to the public at $31.00 each. Altria handed out its remaining Kraft shares to its own investors in March 2007. Kraft’s sales grew steadily, from $29.7 billion in 2002 to $34.4 billion in 2006. However, profits before unusual items fell from $2.02 a share (total $3.5 billion) in 2002 to $1.87 a share ($3.2 billion) in 2004, mostly due to rising costs. Total earnings were flat at $3.2 billion in 2005 and 2006. But per-share earnings rose to $1.88 in 2005 and to $1.94 in 2006, due to fewer shares outstanding....