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J.P. MORGAN CHASE & CO. $50 (New York symbol JPM; Income Portfolio, Finance sector; Shares outstanding: 3.5 billion; Market cap: $175.0 billion; WSSF Rating: Above average) is the third-largest bank in the United States. In the past few years, J.P. Morgan has expanded its retail banking operations, which offsets its exposure to its more volatile businesses like stock trading. In 2003, it paid $58 billion in stock for Bank One Corp., which greatly expanded its presence in the Midwest. In October 2006, it swapped its corporate trust business, which provides securities custody and processing services, for Bank of New York’s 338 retail branches in the New York City area. Thanks to these new assets, income from continuing operations in the fourth quarter of 2006 rose 47.3%, to $1.09 a share (total $3.9 billion) from $0.74 a share ($2.6 billion) a year earlier. These figures exclude a $622 million gain on the swap....

BANK OF AMERICA CORP. $53 (New York symbol BAC; Income Portfolio, Finance sector; Shares outstanding: 4.5 billion; Market cap: $238.5 billion; WSSF Rating: Above average) is the second-largest bank in the United States by assets, after Citigroup. The company has used big acquisitions to expand in the past few years. In 2004, it acquired FleetBoston Financial for $47.3 billion in cash and stock. In 2006, it paid $34.6 billion in cash and stock for credit card specialist MBNA Corp. It recently agreed to pay $3.3 billion for U.S. Trust Corporation, which provides asset management to high net worth clients. The company aims to complete this purchase in the first quarter of 2007. Growth by acquisition can be a source of risk. But these purchases increased Bank of America’s presence in markets that it would probably never reach through internal growth....

CANADIAN IMPERIAL BANK OF COMMERCE $99 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is the fifth-largest Canadian bank, with $304.0 billion in assets. CIBC ran into trouble a few years ago, and absorbed big losses on the shut down of its U.S. retail banking operations. It also had to pay $2.8 billion to settle a class action lawsuit over its involvement with Enron. But the bank’s focus on its less risky retail businesses is now paying off. It earned $2.32 a share (total $819 million) in its fourth fiscal quarter ended October 31, 2006, up 12.6% from $2.06 a share ($728 million) a year earlier. If you exclude unusual items, per-share income rose 38.9%, to $2.00 from $1.44. Foreign exchange losses helped cut revenue in the quarter by 14.7%, to $2.9 billion from $3.4 billion. The year-earlier figure also included several one-time gains....

BANK OF MONTREAL $68 (Toronto symbol BMO; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is Canada’s fourth-largest bank, with assets of $320.0 billion. Outside of Canada, its biggest operation is Harris Bank, which operates 200 branches in Chicago. The United States accounts for roughly 15% of Bank of Montreal’s income. Harris aims to expand its operations in the U.S. Midwest to between 350 and 400 branches, which will give it the scale it needs to compete with bigger U.S. lenders. As part of this strategy, it recently acquired First National Bank & Trust for $325 million. That will add 32 branches in Indiana, and $1.3 billion U.S. in assets....

BANK OF NOVA SCOTIA $51 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is the third-largest bank in Canada, with assets of $379.0 billion. Bank of Nova Scotia has few operations in the U.S. It prefers to focus on developing countries in Latin America and Asia where it has a better chance to improve its market share. Its operations outside of Canada now supply 30% of its earnings. A good example of the bank’s strategy is its recent $90 million purchase of a 68% stake in Dehring Bunting & Golding Ltd., one of Jamaica’s largest brokerage firms. Bank of Nova Scotia plans to use its retail branches in the Caribbean to promote Dehring’s services....

TORONTO-DOMINION BANK $69 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is Canada’s second-largest bank with $392.9 billion in assets. Like Royal Bank, TD has expanded its American operations in the past few years. These businesses now provide around 45% of TD’s income, In 2006, TD combined the U.S. operations of its TD Waterhouse discount brokerage subsidiary with rival Ameritrade to form TD Ameritrade. TD owns 39.8% of this operation, which is now among the top three discount brokers in the U.S....

ROYAL BANK OF CANADA $54 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is the largest bank in Canada, with assets of $536.8 billion. It also operates in the United States and 30 other countries. International operations supply a third of its income. Royal has steadily built up its U.S. operations in the past few years. It recently bought Flag Financial Corp. for $456 million U.S. Flag Financial operates 17 branches in Atlanta. Royal also agreed to buy 39 branches in Alabama for an undisclosed sum. se purchases will strengthen Royal’s retail banking business in the fast-growing southeastern U.S. It also gives Royal more opportunities to offer its retail customers other services, such as insurance and wealth management....

FPI LTD. $7.85 earned $0.25 a share in the third quarter of 2006 compared with a loss of $0.35 a year earlier, thanks to cost controls and the extra earnings from recent acquisitions. However, sales fell 15.4%, to $174.5 million from $206.2 million, due to lower selling prices for fish products and the high Canadian dollar. Hold. FORDING CANADIAN COAL TRUST $24 has reorganized itself from an income trust into a royalty trust. The change removed restrictions on foreign ownership, and should increase Fording’s liquidity (the units also trade in New York). The new structure will not affect Fording’s current $3.80 annual distribution rate, which yields 15.8%. Buy. GENNUM CORP. $14 has gained over 40% in the past six months, mainly due to a new plan to improve customer service. The company also aims to expand its overseas sales. Gennum probably earned $0.55 a share in its fiscal year ended November 30, 2006. But profits could grow to $0.77 in fiscal 2007, and the stock trades at 18.2 times that figure. Buy....

AIC DIVERSIFIED CANADA FUND $46.74 (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 $1.7 billion fund’s 10 largest holdings are Power Financial, Canadian Oil Sands Trust, TD Bank, Shoppers Drug Mart, Loblaw, Thomson Corp., Brookfield Asset Management, Royal Bank, Manulife Financial and Royal Bank of Scotland. The fund holds just 23 stocks. The fund holds 47.8% of its assets in Financial services stocks. The rest of the portfolio breaks down as follows: Consumer staples, 19.4%; Energy, 8.6%; Consumer discretionary, 7.6%; and Health care, 5.5%....

AIC AMERICAN ADVANTAGE FUND $8.21 (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: Investment banking & brokerage, 14.2%; Multi-line insurance, 13.5%; Property & casualty insurance companies, 12.9%; Life & health insurance, 12.6%; Diversified banks, 10.4%; Insurance brokers, 8.0%; Regional banks, 7.9%; Diversified financials, 7.3%; Wealth management, 6.1%; Consumer finance, 2.8%; Thrifts & mortgage finance, 2.3%; and Conglomerates, 1.2%. The $119.3 million AIC American Advantage’s top 10 holdings are Progressive Corp., ING Canada, AFLAC, Morgan Stanley, Hartford Financial Services, TD Bank, Northern Trust, Merrill Lynch, JP Morgan Chase and Willis Group Holdings. This fund holds just 18 stocks....

RIOCAN REAL ESTATE INVESTMENT TRUST $24.49 (Toronto symbol REI.UN; SI Rating: Average) is Canada’s largest REIT. RioCan has total assets of $4.5 billion consisting of ownership interests in a portfolio of 204 retail properties across Canada, including 8 under development. These properties contain over 50.7 million square feet of leasable area. RioCan is Canada’s largest owner of neighbourhood shopping centres. These are enclosed malls in smaller urban centres. But where it’s showing the strongest growth is as the largest owner of ‘New Format’ malls. These are in the suburbs of larger cities, and are made up largely of ‘Big Box’ stores with lots of parking and room for new building. RioCan’s revenue in the three months ended September 30, 2006 was $160.7 million, up 7.3% from $149.8 million a year earlier. Cash flow per unit rose 29%, to $0.40 from $0.31. Portfolio occupancy is at an all-time high of 97.5%. RioCan’s annual distribution of $1.32 gives it a current yield of 5.4%....

FORDING CANADIAN COAL TRUST $24.06 (Toronto symbol FDG.UN; SI Rating: Average) holds a 60% interest in Elk Valley Coal in B.C., the world’s second-largest supplier of metallurgical coal, a key ingredient in steelmaking. Elk Valley supplies approximately 21% of the global market. Fording has vast reserves of coal. Mining could continue at current rates for 25 years; with further development, its reserves could last 100 years. In the three months ended September 30, 2006, Fording’s revenues fell 20.8%, to $451.8 million from $570.8 million. Cash flow per unit fell 44.9%, to $0.92 from $1.67....

PEMBINA PIPELINE INCOME FUND $16.03 (Toronto symbol PIF.UN; SI Rating: Extra risk) has interests in 14 feeder pipeline systems with a total length of 8,350 kilometres. This includes the Pembina System, in operation since 1954. The company also holds a 50% interest in the Fort Saskatchewan Ethylene Storage Limited Partnership. Pembina’s total network is the largest feeder operation in Canada. These pipelines bring oil and gas from fields in northeastern B.C. and western and northern Alberta to refineries, or feed into major pipelines such as the Enbridge Pipeline System....

PENGROWTH ENERGY TRUST $19.42 (Toronto symbol PGF.B; SI Rating: Average) produces oil and gas in western Canada, as well as offshore Nova Scotia. In the three months ended September 30, 2006, Pengrowth’s revenue fell 5.5%, to $287.8 million from $304.5 million. However, cash flow per unit rose 8%, to $1.08 from $1.00. Pengrowth’s average daily production of 58,344 barrels of oil equivalent is weighted 44% toward oil and liquids, and 56% to natural gas. In the latest quarter, the company’s average realized price for oil was $72.61 U.S. and $6.29 U.S. for natural gas....

LEGACY HOTELS REIT $9.43 (Toronto symbol LGY.UN; SI Rating: Extra Risk) owns 25 luxury hotels with over 10,700 guestrooms in Canada and the United States, including The Fairmont Royal York in Toronto and the Fairmont Le Château Frontenac in Quebec City. In the three months ended September 30, 2006, Legacy’s revenues rose slightly, to $223 million from $221.6 million. Cash flow per unit rose 5.9%, to $0.36 from $0.34. Legacy’s Canadian hotels get about a third of their revenue from U.S. tourists. Proposed new rules that would force U.S. travelers to carry a passport could hurt its revenue. However, a drop in the Canadian dollar would cut the cost of travel for U.S. tourists, offsetting the passport requirement. Meanwhile, the trust should generate enough cash to maintain its $0.32 distribution, which yields 3.4%....

MOODY’S CORP. $70 (New York symbol MCO) has increased its dividend 14.3%, from $0.07 a share to $0.08. The new annual rate of $0.32 yields 0.5%. The stock fell below $50 in July 2006 on fears that rising interest rates would cut investor interest in new corporate debt securities, and hurt demand for Moody’s ratings. It has recovered as rates stabilized, but it’s expensive at 32 times earnings. Hold. GENERAL MILLS INC. $58 (New York symbol GIS) has raised its dividend for the fourth time in just over two years. The new rate of $1.48 yields 2.6%. The company also plans to buy back more of its stock in 2007. Buy. PHILIPS ELECTRONICS N.V. $37 (New York symbol PHG) hopes to capture a larger share of Asia’s mobile phone market, which could grow by 50% in 2007. It has licensed its brand to a Chinese company that will make low-cost phones under a five-year deal. Buy....

CONAGRA FOODS INC. $27 (New York symbol CAG; Income Portfolio, Consumer sector; WSSF Rating: Above average) makes a wide variety of frozen and packaged foods. Top brands include Chef Boyardee (pasta), Hunt’s (tomato sauce), Orville Redenbacher’s (popcorn) and Van Camp’s (beans). It also supplies ingredients to other food companies. In the past few years, ConAgra has sold its fresh and packaged meat and other non-core operations to focus on its more profitable packaged food businesses. ConAgra is now working to cut its costs with a new restructuring plan, including plant closures and streamlining its other operations. It will also sell more of its low-margin businesses....

DEL MONTE FOODS CO. $11 (New York symbol DLM; Aggressive Growth Portfolio, Consumer sector; WSSF Rating: Extra risk) makes a wide variety of canned fruit and vegetables. In December 2002, Del Monte acquired Heinz’s seafood, baby food, pet food and private label soup businesses. The company felt these operations would broaden its product line, and help it compete with larger food companies. However, some of the new operations did not perform as well as Del Monte hoped. As part of a new restructuring plan, Del Monte sold some of the slow-growth businesses like baby food and soups. It used the cash to expand its pet food operations....

H.J. HEINZ CO. $46 (New York symbol HNZ; Income Portfolio, Consumer sector; WSSF Rating: Above average) is one of the world’s largest producers of condiments and sauces, and accounts for 60% of ketchup sales in the United States. Other products include frozen meals, soups and baby foods. In September 2006, two nominees affiliated with billionaire investor Nelson Peltz became directors of the company after a lengthy proxy fight. Heinz has had six restructurings in the past 10 years, with moderate success. Peltz wants management to be more aggressive in cutting costs and expanding sales. It looks like the pressure is starting to work. In Heinz’s second fiscal quarter ended November 1, 2006, profits from continuing operations rose 20.4%, to $0.59 a share (total $197.4 million) from $0.49 a share ($168.3 million) a year earlier....

COMPTON PETROLEUM $11.69 (Toronto symbol CMT; SI Rating: Speculative) (403-237-9400; www.comptonpetroleum.com; Shares outstanding: 128.2 million; Market cap: $1.5 billion) produces oil and natural gas in Alberta. In the three months ended September 30, 2006, Compton’s revenue fell 13.9%, to $124.9 million from $145.1 million. Cash flow per share fell 19%, to $0.47 from $0.58. Compton’s average daily production rose 13.1% in the latest quarter, to 32,843 barrels of oil equivalent from 29,041 barrels. Production is weighted 28% toward crude oil and liquids and 72% natural gas....

OILEXCO INC. $6.76 (Toronto symbol OIL; SI Rating: Speculative) (403-262-5441; www.oilexco.com; Shares outstanding: 197.3 million; Market cap: $1.3 billion) is an oil and gas company focused on the UK North Sea. As some of the biggest pools of oil in the North Sea are depleted, most major oil and gas companies, such as British Petroleum and RoyalDutch/Shell, have withdrawn from actively exploring the region. However, they have left behind significant quantities of oil and natural gas. The UK government is now encouraging smaller companies such as Oilexco to explore and exploit those pools of oil and gas. Oilexco’s immediate promise now lies in the development of its 100%-owned Brenda and 70%-owned Nicol oil finds. Production from both fields is set to begin soon, with peak production rates expected to reach 35,000 barrels of oil per day....

ENDEV ENERGY INC. $1.19 (Toronto symbol ENE; SI Rating: Speculative) (1-888-739-4623; www.endevenergy.com; Shares outstanding: 88.9 million; Market cap: $105.8 million) explores for and develops oil and natural gas in central Alberta. In the three months ended September 30, 2006, Endev’s revenue fell 20.8%, to $14 million from $17.6 million. Cash flow per share fell 38.5%, to $0.08 from $0.13. Endev’s average daily output rose 11% in the latest quarter, to 3,746 barrels of oil equivalent from 3,376 barrels. In 2007, Endev plans to spend $40 million on exploration and development. It plans to raise output to around 4,300 barrels of oil equivalent....

GRAND PETROLEUM $3.75 (Toronto symbol GPP; SI Rating: Speculative) (403-231-8400; www.grandpetroleum.com; Shares outstanding: 24.0 million; Market cap: $89.9 million) explores for and develops oil and natural gas in central Alberta. It has also started drilling in southeast Saskatchewan. In the three months ended September 30, 2006, Grand’s revenue rose 16.6%, to $13.8 million from $11.8 million. Cash flow per share rose 11.1%, to $0.30 from $0.27. The company’s shares now trade for just 3.1 times cash flow. Grand’s average daily production rose 31.2% in the latest quarter, to 2,755 barrels of oil equivalent from 2,095 barrels. Production is weighted 67% toward crude oil and liquids and 33% natural gas....

SNC-LAVALIN GROUP INC. $32 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Average) is one of the world’s leading design and engineering companies, with operations in over 100 countries. It specializes in large public works projects like bridges and water treatment systems. The company is also a leading builder of electrical power plants and transmission systems. The recent rise in energy prices is good news for SNC, since many utilities are now looking for ways to cut consumption of oil and natural gas. High oil prices have also spurred interest in nuclear power plants. Another way SNC should benefit from high oil is from more public transit. SNC has designed and built mass transit systems in some of the world’s biggest cities....

FINNING INTERNATIONAL INC. $45 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; SI Rating: Above average) sells and leases Caterpillar brand heavy equipment to oil exploration, mining and forestry firms. The company’s operations in Western Canada supply 40% of its revenue. It also operates in South America (Argentina, Bolivia, Chile, and Uruguay) and the UK. In September 2006, Finning sold the materials handling operations of its UK division for $175 million. This business supplies forklifts and related machinery to warehouses and factories, and has struggled in the past few years. The company recorded a $32.7 million loss on the sale, but it should improve the long-term prospects of the remaining UK operations. Finning used the cash from the sale to pay down debt. Although the company had to pay a special charge on the early retirement of certain bonds ($0.07 a share), the move will cut its future interest expenses. Finning’s long-term debt now stands at 0.5 times equity, down from 0.6 times at the start of 2006....