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ENCANA CORP. $59 (New York symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 753.3 million; Market cap: $44.4 billion; WSSF Rating: Average) is one of North America’s leading producers of natural gas. The company prefers to focus on early-stage properties in Alberta and the U.S. Rockies. These assets cost more to develop, at least initially, but should last much longer than conventional gas fields. Natural gas accounts for 80% of its production. EnCana is also active in Alberta’s oil sands region. But extracting the heavy, tar-like oil sands is much more costly than operating regular oil wells. That’s why EnCana recently folded its oil sands assets into two joint ventures with ConocoPhillips— one to operate the oil sands, and one to refine heavy oil. The two ventures operate independently of each other. In the second quarter of 2007, earnings before hedging gains and other one-time items jumped 83.7%, to $1.80 a share from $0.98 a year earlier, while cash flow per share rose 54.9%, to $3.33 from $2.15. Revenue rose 43.6%, to $5.6 billion from $3.9 billion, due to the expansion of its oil sands business....

CHEVRON CORP. $87 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.1 billion; Market cap: $182.7 billion; WSSF Rating: Above average) is the secondlargest integrated oil company in the United States after ExxonMobil. Operations include refineries, pipelines and 25,800 gas stations under the Chevron, Texaco and Caltex banners. In the past few years, Chevron has used acquisitions to offset declining production. It’s also facing rising operating costs as it develops methods to extract oil and gas from deeper levels. But like research costs at a technology company, investments in new reserves should pay off for years to come. Chevron’s expertise has helped it win a new contract with China’s state-owned oil company to jointly develop a major gas field. This deposit is difficult to get at, and its high sulfur content will cost more to process. But this project has huge long-term potential in light of China’s growing energy needs....

AMERICAN EXPRESS CO. $58 (New York symbol AXP; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $69.6 billion; WSSF Rating: Average) is one of the world’s biggest financial services companies, with offices in over 130 countries. Warren Buffett’s Berkshire Hathaway owns about 13% of the company. Best known for its American Express charge and credit cards, the company gets most of its revenue from fees it charges merchants when cardholders purchase goods and services. Its other major business is its 2,200 travel agencies and travelers checks. Despite the wave of new customers in the past few years, most American Express cardholders tend to have above-average incomes and good credit histories. They also spend, on average, over $11,000 a year....

TIM HORTONS INC. $35 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 188.8 million; Market cap: $6.6 billion; SI Rating: Extra risk) operates 2,733 coffee-and-donut shops in Canada, and 345 in the United States. Franchisees operate 97.5% of its stores. Much of the company’s growth comes from a steady stream of new products, and innovative promotions. Healthier menu items such as fresh sandwiches, soups and salads have also helped it attract customers who avoid donuts. In the three months ended July 1, 2007, earnings fell 11.9% to $67.2 million from $76.3 million a year earlier. Write-offs related to the company’s initial public offering gave it an unusually low tax rate of 19.8% in the year-earlier quarter. The tax rate in the latest quarter grew to a more normal 33.8%. Per-share earnings fell 7.7%, to $0.36 from $0.39, due to fewer shares outstanding....

MAPLE LEAF FOODS INC. $15 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 128.6 million; Market cap: $1.9 billion; SI Rating: Average) makes fresh and frozen meat products, mainly under the Maple Leaf and Schneiders brands. It also owns 88.0% of Canada Bread Company (see box at right). The company is currently restructuring its operations to focus on value-added products, which generate higher profits than fresh meat. Consequently, it recently closed two pork processing plants and will close a third later this year. In the second quarter of 2007, Maple Leaf’s revenue fell 2.9%, to $1.32 billion from $1.36 billion a year earlier. However, earnings from continuing operations and excluding restructuring costs grew 8.3%, to $0.13 a share (total $52.7 million) from $0.12 a share ($46.8 million)....

CANADIAN IMPERIAL BANK OF COMMERCE $87 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 337.5 million; Market cap: $29.4 billion; SI Rating: Above average) provides an example. CIBC has some exposure to the U.S. subprime mortgage market, which is the source of today’s credit worries and market downturn. Growing uncertainty in the mortgage market will force CIBC to write down its U.S. investment portfolio by $190 million (after-tax) in its third fiscal quarter ended July 31, 2007. It earned $807 million or $2.27 a share in its second quarter....

CANADIAN PACIFIC RAILWAY LTD. $70 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 153.1 million; Market cap: $10.7 billion; SI Rating: Above average) transports freight over a rail network between Montreal and Vancouver. In the United States, subsidiaries connect CP’s Canadian lines to major hubs in the Midwest and Northeast. Alliances with other railways extend its reach to Mexico. CP’s revenue rose from $3.7 billion in 2002 to $4.6 billion in 2006, largely due to the expansion of trade with Asia. Profits fell from $3.06 a share (total $487.5 million) in 2002 to $2.52 a share ($401.3 million) in 2003 due to higher fuel costs....

JAPAN SMALLER CAP FUND $11.39 (New York symbol JOF; CWA Rating: Aggressive) invests mainly in less-widely-followed Japanese over-the-counter stocks. The fund’s top holdings are Jupiter Telecom, Suruga Corp., Nichias Corporation, Tokai Rubber, Futuba Industrial, Aeon Delight, Disco Corp., Kansai Urban Banking, Nagase & Company and Yokahama Rubber. Japan Smaller Cap Fund sells for a 0.4% premium above the current value of its assets. Our long-standing advice is that you only buy closed-end funds trading at close to or below net asset value. Japan Smaller Cap is a buy.

JAPAN EQUITY FUND $8.12 (New York symbol JEQ; CWA Rating: Aggressive) invests mostly in large capitalization stocks on the Tokyo Stock Exchange. The Japan Equity Fund’s top holdings include: Toyota Motor, Mitsubishi UFJ Financial Group, Mizuho Financial, Matsushita Electric Industrial, Nomura Holdings, Mitsubishi Heavy Industries, Canon, Takeda Pharma, and NTT. Japan Equity Fund is available for 6% less than the current value of its assets. It’s a buy.

RIOCAN REAL ESTATE INVESTMENT TRUST $22.30 (Toronto symbol REI.UN; SI Rating: Average) is Canada’s largest REIT. RioCan has ownership interests in a portfolio of 206 retail properties across Canada, including nine under development. These properties contain over 52.1 million square feet of leasable area. RioCan’s revenue in the three months ended March 31, 2007 was $174.5 million, up 9.6% from $159.2 million a year earlier. Cash flow per unit was unchanged at $0.35. RioCan’s annual distribution of $1.32 gives it a current yield of 5.9%. RioCan is focusing its future development on six high-growth markets — Toronto, Ottawa, Montreal, Calgary, Edmonton and Vancouver. Although land costs more in these markets than other areas, RioCan feels their strong growth prospects offset the higher building costs....

CANADIAN REIT $28.99 (Toronto symbol REF.UN; SI Rating: Extra Risk) owns a portfolio of more than 140 income properties consisting of retail, industrial and office properties across Canada and in the Chicago, Illinois area. The company’s portfolio contains more than 19 million square feet of space. CREIT’s revenue in the three months ended March 31, 2007 was $72.7 million, up 11.7% from $65.1 million a year earlier. Cash flow per unit rose 10.9% to $0.51 from $0.46. The units now yield 4.7%. CREIT focuses on acquiring properties in prime locations, usually near major metropolitan centres, that attract strong tenants, maintain high occupancy rates and deliver a reliable stream of rental income....

H&R REAL ESTATE INVESTMENT TRUST $21.95 (Toronto symbol HR.UN; SI Rating: Extra risk) holds interests in 35 office properties, 115 single-tenant industrial properties and 143 retail properties. Over half are in the Greater Toronto Area. The rest are elsewhere in Ontario, in Quebec, western Canada and the U.S. H&R aims to acquire only properties that it can lease long-term to creditworthy tenants. It now has an industry-leading portfolio occupancy rate of 99.7%. Revenue in the three months ended March 31, 2007 was $153.7 million, up 19.1% from $129.1 million a year earlier. Cash flow per unit rose 2.3%, to $0.44 from $0.43. H&R’s units now yield 6.1%. H&R REIT is a buy.

MANULIFE FINANCIAL $39.07 (Toronto symbol MFC; SI Rating: Above-average) sells life and other forms of insurance, as well as mutual funds and investment management services. It operates in 19 countries and territories worldwide. Manulife has assets under administration of $426 billion. In the three months ended March 31, 2007, Manulife’s earnings excluding one-time items rose 10.8%, to $1.1 billion or $0.68 a share, from $952 million or $0.60 a share a year earlier. Revenue rose 2.6%, to $8.6 billion from $8.4 billion. Manulife has raised its dividend 10%, to $0.22 from $0.20. The shares now yield 2.3%. Manulife’s operations are diversified among life and health insurance, segregated mutual funds, and reinsurance. Its geographic diversification in the U.S. and Asia, including China, offers growth prospects....

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....