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YUM! BRANDS INC. $49 (New York symbol YUM; Aggressive Growth Portfolio, Consumer sector; WSSF Rating: Average) operates around 32,000 fast food restaurants in over 100 countries. That’s more outlets than McDonald’s (see box on page 62), although McDonald’s generates higher annual sales. The company owns about 25% of these restaurants, and franchisees own the rest. It aims to sell more of its U.S. outlets to franchisees in the next few years, which would cut its overall risk. Yum prefers to own stores in developing countries, however, at least until local managers learn the business. Yum gets most of its sales and profits from three main banners: KFC (chicken); Pizza Hut; and Taco Bell (Mexican food). It also operates the smaller A&W (hamburgers) and Long John Silver’s (seafood) chains....

AGRIUM INC. $26 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; SI Rating: Average) is a leading supplier of fertilizers and agricultural chemicals. The company uses natural gas to make its nitrogen-based fertilizers, which account for roughly 40% of its revenue and profits. Agrium also makes fertilizers from potash and phosphate, which come primarily from mines it operates in Western Canada. The ongoing resources boom should eventually spread to the agriculture industry, and spur fertilizer demand and Agrium’s profits....

SHAWCOR LTD. $17 (Toronto symbol SCL.A (old symbol SCL.SV.A); Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Average) makes sealants that protect oil pipelines from corrosion. Thanks to rising energy prices, ShawCor’s earnings from continuing operations in the first quarter of 2006 rose 32.0%, to $0.33 a share from $0.25. Revenue rose 6.1%, to $257.7 million from $242.9 million. The company recently completed a major contract to coat an underwater pipeline in the North Sea. But the company’s growing reputation is helping it win new contracts, particularly in Asia....

CANADIAN PACIFIC RAILWAY LTD. $55 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; SI Rating: Average) also profits from the resources boom, since products such as coal, fertilizers and forest products account for a third of its freight revenue. The company is vulnerable to higher fuel prices, but so are its competitors, and it can pass much of the extra cost along to its customers. Recent investments in new locomotives and track have improved its fuel-efficiency by 5.6% in the past five years. Greater fuel efficiency also gives CP an advantage over trucking firms....

FINNING INTERNATIONAL INC. $38 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; SI Rating: Above average) profits from rising oil and mineral prices, since it sells, rents and services Caterpillar brand heavy equipment to energy exploration and mining companies. Finning earned $0.63 a share (total $56.9 million) in the first quarter of 2006, up 50% from $0.42 a share ($37.4 million) a year earlier. If you exclude gains on the sale of assets, it would have earned $0.53 a share in the most recent quarter, up 26.2%. Revenue rose 7.8%, to $1.24 billion from $1.15 billion. Finning gets half its revenues from its UK and South American operations, and the rising Canadian dollar cut its revenue growth in the quarter by $88 million....

TORSTAR CORP. $21 (Toronto symbol TS.B (old symbol TS.NV.B); Conservative Growth Portfolio, Consumer sector; SI Rating: Above average) is one of Canada’s top media companies. It’s best known as the publisher of The Toronto Star, the largest daily newspaper in Canada. It also publishes over 150 daily and weekly newspapers in Southern Ontario. Newspapers account for roughly two-thirds of the company’s revenue, and around 55% of its profit. The rest comes from wholly owned Harlequin Enterprises Ltd., the world’s largest publisher of romance fiction titles. Torstar’s revenue grew slowly, from $1.42 billion in 2001 to $1.57 billion in 2005. These figures exclude revenue from discontinued businesses. In 2001, the company earned just $0.04 a share (total $3.0 million), mainly due to unusual items. Income in 2002 rose to $1.64 a share (total $125.3 million), but slipped to $1.59 a share ($123.5 million) in 2003. Restructuring costs cut Torstar’s 2004 profit to $1.42 a share ($112.7 million). In 2005, earnings improved to $1.52 a share ($118.8 million)....

IVY CANADIAN FUND $29.46 (CWA Rating: Conservative) invests in high-quality, largecapitalization stocks. The $4.8 billion fund’s top holdings include Shoppers Drug Mart, Yellow Pages Income Fund, Manulife Financial, Danaher Corp., Reckitt Benckister plc, Bank of Nova Scotia, Canadian National Railway, Loblaw, Imperial Oil and Omnicom Group. Ivy Canadian’s breakdown by industry is: Consumer staples, 26.9%; Financials, 21.6%; Consumer discretionary, 12.8%; Industrials, 12.7%; and Energy, 6.6%. Ivy Canadian made 8.4% annually over the last 10 years, compared to the S&P/TSX’s gain of 10.9%. The fund’s MER is 2.44%. It holds a high cash level of 9%....

IVY EUROPEAN FUND $11.72 (CWA Rating: Aggressive) holds mostly good quality stocks, although it has underperformed the benchmark Morgan Stanley indexes. We don’t see any reason to hold a mutual fund that concentrates in Europe. If you want European exposure, consider Ivy Foreign Equity Fund, or the closed-end European Equity Fund....

IVY ENTERPRISE FUND $4.55 invests in smaller and medium-sized companies. The $240.5 million fund has an MER of 2.46%. The fund’s overall choice of stocks doesn’t inspire our confidence. Its top holdings are RONA Inc., Winpak, Richie Brothers Auctioneers, National Instruments, Canadian Western Bank, Saxon Financial, Brown & Brown, Henry Schein and Robert Half International. We think investors can do better by buying some of the other small-cap funds we recommend in Canadian Wealth Advisor. Ivy Enterprise Fund is a sell.

IVY FOREIGN EQUITY FUND $26.03 (CWA Rating: Conservative) outperformed the Morgan Stanley benchmark international index over the last 10 years. The fund gained 8.0%, and that was better than the Morgan Stanley benchmark’s gain of 5.7%. Ivy Foreign Equity Fund made 5.1% over the last year. The fund invests in companies based outside of Canada, but cuts risk by avoiding direct investment in emerging markets. Ivy Foreign Equity is one of our top foreign fund recommendations. Still, we think non-U.S. international funds should make up at most perhaps 10% of the holdings of a conservative investor. The fund’s top 10 holdings are Reckitt Benckister plc (UK household & healthcare products), Brown & Brown (U.S. insurance), Danaher Corp. (U.S. control products and tools), Essilor International SA (corrective eyewear), Henry Schein Inc., (U.S. healthcare), PepsiCo (U.S. food & beverage), William Demant (hearing health products), Omnicom (U.S. media services), Diageo plc (UK alcoholic drinks) and Ecolab Inc. (U.S. maintenance & cleaning products)....

IVY GROWTH AND INCOME FUND $23.18 (CWA Rating: Conservative) (Mackenzie Financial Corp., 150 Bloor St. West, Toronto, Ont. M5S 3B5. 1-800-387-0780; Web site: www.mackenziefinancial.com. Load fund — available from brokers) is a balanced fund, holding a mixture of stocks, bonds and cash. The fund has performed well, returning 8.3% annually for the 10 years. It made 4.4% over the last year. The fund’s MER is 2.17%. The fund’s top stock holdings are Shoppers Drug Mart, PepsiCo, Omnicom Group (U.S. media services), Bank of Nova Scotia, Danaher Corp. (U.S. control products and tools), Reckitt Benckiser plc (UK household & healthcare products), Yellow Pages Income Fund, Manulife Financial and CN Railway. This $3.7 billion fund holds 19% of its assets in bonds. Interest rates on bonds are now under 5% annually in Canada. That’s the total return that a bond can provide, from today until it matures. However, bonds leave investors at the mercy of inflation, which shrinks the purchasing power of all fixed-return investments. In fact, an upsurge in inflation could wipe out all returns on bonds, and some of their principal besides....

ALTAMIRA SCIENCE & TECHNOLOGY FUND $7.12 (CWA Rating: Aggressive) (Altamira Investment Services, The Exchange Tower, 130 King St. West, Suite 900, Toronto, Ont. M5X 1K9. 1-800-263-2824; Web site: www.altamira.com. No load — deal directly with the company) invests in the telecommunications, biotechnology, environmental technology, health care and computer industries. The $66.8 million fund gained 4.5% over the last year, compared to the Nasdaq’s gain of 7.7%. Its MER is 2.68%. Top holdings include: Microsoft, 6.5%; eBay, 4.8%; Cisco, 4.6%; Research In Motion, 3.5%; Apple Computer, 3.1%; Charles River Labs, 3.1%; Satyam Computer Services, 3%; Accenture, 2.8%; PDL BioPharma 2.7%; and St. Jude Medical, 2.6%....

TD SCIENCE & TECHNOLOGY FUND $12.96 (CWA Rating: Aggressive) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W1P9. 1-800-461-38 63; Web site: www.tdcanadatrust.com. No load — deal directly with the company) invests mostly in U.S. firms engaged in the research, development, production or distribution of products or services related to science and technology. The fund’s gain over the last year was 12.2%. The Nasdaq index rose 7.7%. The $145.8 million fund’s manager is well-respected U.S. mutual fund manager T. Rowe Price Associates. Its MER is 2.79% TD Science & Technology’s top holdings include: Microsoft, 7.1%; Samsung Electronics, 4.7%; Nokia, 3.1%; Juniper Networks, 2.3%; Yahoo!, 2.3%; Red Hat, 2.1%; Taiwan Semiconductor, 2.1%; Cisco Systems, 2%; CDNetworks, 2%; and Analog Devices, 2%....

SHININGBANK ENERGY INCOME FUND $23 (Toronto symbol SHN.UN; SI Rating: Speculative) focuses on natural gas production in west-central Alberta. Shiningbank’s revenues rose 32.3% in the three months ended March 31, 2006, to $106 million from $80.1 million a year earlier. Cash flow per unit rose 12.3%, to $0.91 from $0.81. Shiningbank’s average daily production of 21,828 barrels of oil per day equivalent is weighted 23% toward oil and liquids and 77% natural gas. In the latest quarter, the company’s average realized price for oil was $59.43 U.S. and $8.83 U.S. for gas....

PENGROWTH ENERGY TRUST $24.80 (Toronto symbol PGF.B; SI Rating: Average) produces oil and gas in western Canada. The company was one of the first Canadian royalty trusts, starting up in 1988. It’s now one of the largest energy trusts in North America. Pengrowth also holds an 8.4% interest in the Sable Offshore Energy Project. This project consists of six gas fields located near Sable Island, east of Halifax, Nova Scotia. In the three months ended March 31, 2006, Pengrowth’s revenue rose 21.7%, to $291.9 million from $239.9 million. Cash flow per unit rose 7.3%, to $0.88 from $0.82. Pengrowth’s average daily production of 58,825 barrels of oil per day equivalent is weighted 55% toward oil and liquids and 45% natural gas. In the latest quarter, the company’s average realized price for oil was $63.31 U.S. and $8.76 U.S. for gas....

ARC ENERGY TRUST $28.25 (Toronto symbol AET.UN; SI Rating: Speculative) produces oil and gas in western Canada. Like most oil and gas trusts, ARC holds mature, low-risk properties, with a focus on short-term cash flow for payout. In the three months ended March 31, 2006, ARC’s revenue rose 34%, to $318.9 million from $238.1 million. Cash flow per unit rose 25.3%, to $0.94 from $0.75. ARC’s average daily production of 64,600 barrels of oil per day equivalent is weighted 52% toward crude oil and liquids and 48% natural gas. In the quarter, the company’s average realized price for oil was $59.53 U.S. and $8.40 U.S. for gas....

WEYERHAEUSER CO. $63 (New York symbol WY; Conservative Growth Portfolio, Resources sector; WSSF Rating: Average) is a leading forest products company. It owns or leases 36 million acres of timberland in the United States, and Canada. We normally advise investors to avoid forest product stocks, due to high labor costs, excessive environmental regulations and international trade disputes. However, we feel Weyerhaeuser is different. Its large land holdings are worth around $41 a Weyerhaeuser share, and its U.S. and Canadian operations will benefit from a new deal between the two countries to settle a dispute over tariffs on Canadian lumber exports to the U.S. In fact, the company’s Canadian unit will probably get back $300 million of the $377 million in extra duties that it paid in the past five years....

APACHE CORP. $62 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; WSSF Rating: Average) explores for and produces oil and natural gas in North America, the UK, Australia, Argentina, China and Egypt. In 2005, oil accounted for 54% of its production, while gas supplied 46%. In the past few years, Apache has expanded its operations in the Gulf of Mexico. It currently operates over 400 offshore platforms, which accounted for 18% of its 2005 production. Oil companies have operated in the Gulf of Mexico for 60 years. But many of the bigger firms are now looking elsewhere for new reserves, because the yearly threat of hurricane damage increases the risk of drilling in the Gulf. That’s why BP recently sold its remaining operations in the Gulf to Apache for $1.3 billion....

ENCANA CORP. $47 (New York symbol ECA; Conservative Growth Portfolio, Resources sector; WSSF Rating: Average) is a leading Canadian energy company. Natural gas accounts for about 75% of its production. In the past two years, EnCana has sold most of its overseas assets and conventional properties to focus on early-stage natural gas fields in North America. These properties are located mainly in remote mountainous areas, which makes them more expensive to develop....

UNITED TECHNOLOGIES LTD. $62 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Above average) operates in two main fields. Its aerospace businesses include Pratt & Whitney (aircraft engines), Sikorsky (helicopters) and Hamilton Sundstrand (aircraft electronics). These operations supply about 40% of the company’s revenue, and 45% of its profit. It also supplies building equipment and services, which include Carrier (heating and air conditioning), Otis (elevators) and UTC Fire & Security (which provides sprinkler systems, intruder alarms and security services under the Chubb and Kidde banners)....

CANADIAN IMPERIAL BANK OF COMMERCE $83 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is the fifth-largest bank in Canada, with assets of $288.9 billion. In 2005, CIBC paid $2.8 billion to settle class-action lawsuits over its involvement with U.S. energy trading firm Enron Corp. We felt at the time that CIBC did not intentionally try to deceive investors, and the stock would bounce back. It’s now back to pre-settlement levels. The bank’s new managers now aim to cut costs by $250 million this year. To put that in context, CIBC earned $1.62 a share (total $580 million) in its first fiscal quarter ended January 31, 2006, down 16.5% from $1.94 a share ($707 million) a year earlier. If you exclude gains on the sale of assets in the year-earlier period, CIBC’s pershare earnings actually grew 11.7%....

BANK OF MONTREAL $62 (Toronto symbol BMO; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is Canada’s fourth-largest bank, with assets of $305.8 million. The bank continues to expand its Chicago operations, where its Harris Bank subsidiary is the area’s second-largest bank in terms of deposits. In 2005, acquisitions added 21 branches to the Harris network, and expanded its geographic reach to Indiana. Harris now operates close to 200 branches, and supplies 10% of Bank of Montreal’s revenue, and 5% of its profit....

BANK OF NOVA SCOTIA $45 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is Canada’s third-largest bank, with total assets of $325.0 billion. The bank has the highest international exposure of the big five Canadian banks, and now gets nearly 30% of its revenue and income from overseas assets. Bank of Nova Scotia prefers to invest in developing areas like the Caribbean and Latin America, where spreading prosperity is fueling demand for banking services. It has few operations in the United States. For example, Bank of Nova Scotia just agreed to pay an undisclosed sum for Citigroup Inc.'s retail banking business in the Dominican Republic. The purchase will make it that country’s fifth-largest bank, and enhances its credit card and consumer loan operations....

TORONTO-DOMINION BANK $62 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is the secondlargest Canadian bank, with $384.4 billion in assets. Like Royal, TD is aggressively expanding in the U.S., mainly through subsidiary TD Banknorth Inc., which operates 400 branches in northern New England and upstate New York. TD now gets 8% of its revenue from the U.S. operations. Also like Royal, TD is concentrating on markets close to its current operations. For example, TD Banknorth recently agreed to buy Interchange Financial Services Corp., which has 30 bank branches in northern New Jersey, for $480.6 million U.S. That will make TD Banknorth the ninth-largest bank in New Jersey, with around 130 branches....

ROYAL BANK OF CANADA $47 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is Canada’s largest bank, with assets of $487.9 billion. In the past few years, Royal has steadily built up its U.S. operations, mainly through acquisitions of regional banks and wealth management firms. Royal prefers to focus on smaller markets like North Carolina where it can quickly build market share. This way, it avoids competing directly with larger U.S. banks. Thanks to a restructuring, earnings from Royal’s U.S. operations in its first fiscal quarter ended January 31, 2006 rose 3.1%, to $101 million from $98 million a year earlier. If you exclude the impact of the rising Canadian dollar, profit at the U.S. division grew 9%. Royal itself earned $0.89 a share (total $1.17 billion) from continuing operations in the quarter, up 18.7% from $0.75 a share ($977 million) a year earlier (all pershare amounts adjusted for a 2-for-1 stock split in April 2006)....