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GOLDEN WEST FINANCIAL CORP. $67 (New York symbol GDW; WSSF Rating: Average) operates over 500 retail branches in 38 states under the “World Savings & Loan” banner. Residential mortgages represent 90% of its loan portfolio. Golden West specializes in adjustable rate mortgages (ARMs), whose interest rates move up and down with the Federal Reserve’s benchmark rate. Many first-time homebuyers prefer ARMs, since the initial interest rate is usually less than a fixed-rate mortgage. Golden West likes them since the interest it receives on its loans varies with the interest it has to pay out to depositors. Although interest rates are still moving up, Golden West’s loan volumes continue to rise, although at a slower pace. That helped the company earn $1.22 a share (total $382.2 million) in the three months ended September 30, 2005, up 16.2% from $1.05 a share ($324.8 million) a year earlier....

WASHINGTON FEDERAL, INC. $24 (Nasdaq symbol WFSL; WSSF Rating: Average) operates 122 savings and loans branches in seven western states. Single-family residential mortgages account for 70% of its loan portfolio. The company is doing a good job managing its loan portfolio. When interest rates were low, it decided to hold most of its assets in cash instead of chasing less profitable business. However, as interest rates moved up, it expanded its lending activities. Thanks to this conservative approach, Washington Federal earned $0.39 a share (total $34.4 million) in its fourth fiscal quarter ended September 30, 2005, up 8.3% from $0.36 a share ($31.5 million) a year earlier. The most recent quarterly earnings figure included $1.2 million in net non-recurring items....

WASHINGTON MUTUAL INC. $44 (New York symbol WM; WSSF Rating: Average) is the nation’s largest thrift company, with over 2,500 branches and offices. Residential mortgages account for over 60% of its total loan portfolio. Other operations include corporate lending and insurance. Rising interest rates has slowed demand for new mortgages, and refinancing of existing ones. That forced Washington Mutual to cut costs, and reduce its exposure to the mortgage industry. Consequently, the company acquired credit card issuer Providian Financial Corp. for $6.1 billion in cash and stock. This is a big commitment for Washington Mutual, which earned $0.92 a share (total $821 million) in the third quarter of 2005, up 21.1% from $0.76 a share ($674 million) a year earlier. (These figures do not include Providian.) It will take several months for Washington Mutual to absorb its new operations. But they should eventually add around $0.10 a share to its annual earnings....

H.J. HEINZ COMPANY $35 (New York symbol HNZ; WSSF Rating: Above average) rose more than 25-fold from the early 1980s through 1998. In the next couple of years, it dropped by nearly half. It has spent much of the current decade between $30 and $40. Its next big move is likely to be upward. Heinz is one the world’s biggest food companies, with sales in over 200 countries. It’s best known for its Heinz ketchup, which has 60% of the American retail market and 80% of the restaurant market. Other products include soups, beans, pasta sauces (Classico), frozen potatoes (Ore-Ida) and baby food (Plasmon). Overseas markets account for 55% of Heinz’s sales, and 45% of its profit. Heinz’s sales fell from $9.4 billion in 2000 (fiscal years end April 30) to $8.2 billion in 2002, after it spun off several slow-growth brands such as North American tuna and pet food to Del Monte Foods Inc. Sales improved to $8.9 billion in 2004....

TORSTAR CORP. $22 (Toronto symbol TS.NV.B, SI Rating: Above average) publishes The Toronto Star, Canada’s largest daily newspaper. It also publishes daily and weekly papers throughout Ontario, and operates news and information Internet sites. Torstar also owns Harlequin Enterprises, the world’s largest publisher of romance fiction titles. Newspapers provide two-thirds of Torstar’s revenue, and about 55% of its profit. In the three months ended September 30, 2005, Torstar earned $0.30 a share (total $23.7 million), more than double the $0.14 a share ($11.3 million) it made a year earlier. The most recent quarter included a $0.10 a share gain on the sale of excess land in Toronto, and $0.11 in other non-recurring gains. Revenue grew 3.8%, to $380.6 million from $366.5 million, as gains from its community newspapers and Harlequin book publishing division offset lower revenue at its daily newspapers. The company aims to cut its reliance on newspaper ads by expanding elsewhere. It has agreed to buy 20% of Bell Globemedia, the owner of The Globe and Mail, CTV Television and several other media properties, for $283 million. It recently paid $3 million U.S. for an undisclosed minority stake in U.S.-based LiveDeal.com, which provides free online classified ads....

THOMSON CORP. $41 (Toronto symbol TOC; SI Rating: Above average) provides a wide range of specialized information to financial, medical, legal and scientific professionals, mainly through electronic channels such as the Internet. Unlike Torstar and Transcontinental, Thomson gets only a small portion of its revenue from ads. In the third quarter of 2005, Thomson earned $0.46 a share (total $302 million) from ongoing operations, down 8.0% from $0.50 ($328 million) a year earlier (all amounts except share price in U.S. dollars). If you exclude one-time items, Thomson’s per-share earnings grew 8.5%, to $0.51 from $0.47. Revenue grew 9.1%, to $2.4 billion from $2.2 billion....

TRANSCONTINENTAL INC. $19 (Toronto symbol TCL.SV.A; SI Rating: Average) is the seventh-largest commercial printing firm in North America. It also publishes newspapers and magazines, distributes flyers and other advertising materials, and operates several Internet sites. In the past few years, two-thirds of Transcontinental’s growth has come from its aggressive acquisition strategy. But under a new long-term plan, Transcontinental will probably make fewer acquisitions, and build up its existing operations. For example, Transcontinental plans to offer its printing customers more advisory services and special ad packages, in its publications and online. It hopes to make their ads effective, cut their costs, and generate added revenue....

CANADIAN IMPERIAL BANK OF COMMERCE $76 (Toronto symbol CM; SI Rating: Above average) is Canada’s fifth-largest bank with $280.4 billion in assets. In August 2005, the bank set aside $2.8 billion (or $7.45 a share) to cover various lawsuit settlements related to its dealings with bankrupt U.S. energy trading firm Enron Corp. The charge wiped out about 20% of CIBC’s shareholders’ equity. It also forced it to suspend stock buybacks, and freeze its $2.72 dividend, which yields 3.6%. CIBC now hopes that its new restructuring plan will cut its annual operating expenses by $250 million, which would bring its costs in line with the other big banks....

BANK OF MONTREAL $63 (Toronto symbol BMO; SI Rating: Above average) is the fourthlargest Canadian bank, with assets of $297.5 billion. The bank earned $1.27 a share (total $657 million) in its fourth fiscal quarter ended October 31, 2005, up 19.8% from $1.06 ($551 million) a year earlier. The latest results include $43 million in one-time gains from the sale of its U.S. online banking business and other assets; the year-earlier period includes $24 million in non-recurring gains. Revenue in the quarter rose 15.2%, to $2.65 billion from $2.3 billion. Strong gains from Canadian operations offset slower growth in the U.S. Bank of Montreal is doing a good job selling investment products and other services to its retail banking customers. However, the bank is recovering fewer loans that it had already written off in prior years. It set aside $57 million for loan losses in the fourth quarter; a year earlier, it cut its total loan loss provisions by $13 million. Although provisions will probably rise in the next year, they’re still well below the peak of the first two years of this decade....

BANK OF NOVA SCOTIA $47 (Toronto symbol BNS; SI Rating: Above average) is Canada’s third-largest bank, with assets of $314.0 billion. In its fourth fiscal quarter ended October 31, 2005, earnings grew 15.9%, to $0.80 a share (total $811 million) from $0.69 ($705 million) a year earlier, due to gains in retail, wealth management and international operations. Excluding onetime items, the bank earned $0.77 a share in the latest quarter. Revenue rose 9.6%, to $2.74 billion from $2.5 billion. In the past five years, Bank of Nova Scotia has spent over $800 million on international acquisitions, mostly in the Caribbean and Latin America. These operations now provide about a third of its net income. This makes it the most international of Canada’s big five banks....

TORONTO-DOMINION BANK $60 (Toronto symbol TD; SI Rating: Above average) is Canada’s second-largest bank, with $365.2 billion in assets. In its fourth fiscal quarter ended October 31, 2005, TD’s earnings fell 8.9% to $0.82 a share (total $589 million) from $0.90 a share ($595 million) a year earlier. If you disregard unusual items, per share earnings improved 16.5%, to $1.06 from $0.91. Revenue rose 19.2%, to $3.1 billion from $2.6 billion. TD feels that U.S. banking offers an opportunity to expand its profits. Last year it paid about $5 billion for a controlling stake in U.S.-based Banknorth Group Inc. (now called TD Banknorth). This subsidiary now plans to pay $1.9 billion U.S. for Hudson United Bankcorp, which operates over 200 branches in the New York City area. Meanwhile, TD plans to sell the U.S. operations of its TD Waterhouse online brokerage to rival Ameritrade. In exchange, TD will receive 32% of Ameritrade. It will also acquire Ameritrade’s Canadian brokerage business for $60 million U.S....

ROYAL BANK OF CANADA $88 (Toronto symbol RY; SI Rating: Above average) is the largest of Canada’s big five banks, with total assets of $469.5 billion. In its fourth fiscal quarter ended October 31, 2005, Royal set aside $591 million to cover possible lawsuit settlements related to its involvement with U.S. energy trader Enron Corp. It also set aside $203 million more to cover costs at its U.S. insurance operations related to three major hurricanes. These charges cut Royal’s net income from continuing operations in the fourth quarter by 21.9%, to $0.82 a share (total $543 million) from $1.05 ($687 million) a year earlier. If you disregard all unusual charges, per-share earnings grew 18.3%, to $1.68 from $1.42. Revenue rose 4.3%, to $4.8 billion from $4.6 billion....

Flow-through funds are tax shelters that mainly invest in the flow-through shares issued by junior mining and oil companies. These companies spend the proceeds from the shares they sell on mineral exploration and development, an activity that qualifies for certain tax credits and tax deferrals. These tax benefits “flow through” to investors in the fund. To take advantage of these benefits, investors need to hold the funds for a fixed period, usually 18 months to two years. The problem with these tax shelters is that they may persuade you to make a risky investment you wouldn’t otherwise make. Moreover, a portion of the benefits are set aside for brokers and the fund’s organizers. What’s left may not be enough to pay you for taking on the extra risk, especially this year. These tax shelters may post excellent results from time to time. However, as the current climate for resources and commodities shows, booms don’t last forever....