acquisition

ENERFLEX LTD. $13.10 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 79.1 million; Market cap: $1.1 billion; Dividend yield: 2.6%) rents and sells equipment and services for natural gas production, including compression and processing plants, refrigeration gear and power generators. On June 30, 2014, Enerflex closed its $431-million U.S. acquisition of two businesses owned by privately held Axip Energy Services: an international contract compression and processing subsidiary and a division that provides aftermarket services. In the three months ended September 30, 2015, the company’s revenue fell 5.7%, to $425.2 million from $451.1 million a year earlier. Earnings per share were unchanged at $0.40....

TEMPUR SEALY $75.57 (New York symbol TPX; TSINetwork Rating: Speculative) (800-878-8889; www.tempursealy.com; Shares outstanding: 62.2 million; Market cap: $4.6 billion; No dividends paid) completed its $1.3- billion purchase of rival Sealy in 2013. This was a major acquisition for Tempur Sealy (formerly Tempur- Pedic), but it let the company diversify into traditional spring-coil beds. In the three months ended September 30, 2015, Tempur Sealy’s earnings rose 27.6%, to $69.9 million, or $1.11 a share, from $54.8 million, or $0.88 a share, a year earlier. Excluding the effect of a higher U.S. dollar, earnings per share jumped 36.4%. Sales gained 6.4%, to $880.0 million from $827.4 million. North American sales (82% of the total) rose 7.5%, while international sales (18%) fell 2.3%....

NEWELL RUBBERMAID INC., $45.28, New York symbol NWL, is reportedly negotiating a merger with Jarden Corp. (New York symbol JAH). Jarden makes consumer products, including Sunbeam kitchen appliances, Mr. Coffee coffee makers, Ball jars, Crock-Pot cookers and Rawlings baseball mitts. It would cost around $11.8 billion to buy Jarden, which is almost equal to Newell’s $12.7-billion market cap (the value of all outstanding shares). The combined firm would have $14 billion of annual sales....

Loblaw shares hovered between $30 and $40 between 2008 and 2012. That’s mainly because the company had trouble upgrading its inventory-management systems and streamlining its distribution networks. As a result, many of its stores frequently ran out of basic items. The company has fixed these problems and is now enjoying the benefits of its new systems. In addition, its 2014 purchase of the Shoppers Drug Mart chain sets it up for years for growth. LOBLAW COMPANIES LTD. $65 (Toronto symbol L; Con- servative Growth Portfolio, Consumer sector; Shares outstanding: 412.4 million; Market cap: $26.8 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.5%; TSINetwork Rating: Above Average; www.loblaw.ca) opened its first self-serve, cash-and-carry grocery store in Toronto in 1919....

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ALIMENTATION COUCHE-TARD, $62.68, symbol ATD.B on Toronto, has agreed to buy Ireland’s Topaz chain for an undisclosed amount. Topaz is the country’s leading operator of gas stations and convenience store stations, with a 35% share of the market. The chain consists of 464 locations across Ireland, including its recently acquired Esso network. Topaz owns 162 of these outlets, while dealers own the remaining 302. The agreement also includes a commercial-fuels operation with more than 30 depots and two terminals. Growth by acquisition can be risky, especially with a deal this big. But Couche-Tard has a long record of successfully integrating acquisitions, including Norway’s Statoil Fuel & Retail gas station chain, which it bought for $2.7 billion in June 2012. It also paid $1.7 billion for the Pantry, which has more than 1,500 convenience stores in 13 southern U.S. states, in March 2015....

LOBLAW COMPANIES $66.80 (Toronto symbol L; Shares outstanding: 412.4 million; Market cap: $27.6 billion; TSINetwork Rating: Above Average; Dividend yield: 1.5%; www.loblaw.ca) is Canada’s largest food retailer, with about 1,200 supermarkets. Its banners include Loblaws, Provigo, Fortinos, Real Canadian Superstore and No Frills. George Weston Ltd. (see below) owns 46% of the company. In the three months ended October 10, 2015, Loblaw earned $408 million, or $0.99 a share, up 10.0% from $371 million, or $0.90, a year earlier. Sales rose 2.5%, to $13.9 billion from $13.6 billion. Excluding gasoline, same-store sales rose 3.1% at Loblaw and 4.9% at the 1,300-store Shoppers Drug Mart chain, which the company bought for $12.3 billion in March 2014. Loblaw continues to integrate its operations with Shoppers Drug. It expects these moves to save it at least $222 million in 2016....

Ag Growth International Inc., $29.09, symbol AFN on Toronto (Shares outstanding: 14.4 million; Market cap: $418.3 million; www.aggrowth.com), is a leading maker of portable and stationary grain-handling, storage and conditioning equipment. The company is based in Winnipeg. Ag Growth sells its products through dealers and distributors in Canada and the U.S., as well as overseas, including Russia, Ukraine and Kazakhstan. It gets 44% of its sales from the U.S., followed by Canada (34%) and international markets (22%). The company started out as an income trust. It first sold units to the public at $10 each and began trading on Toronto in May 2004. In June 2009, it converted to a corporation and changed its name from Ag Growth Income Fund to Ag Growth International....

ALIMENTATION COUCHE-TARD, $62.78, symbol ATD.B on Toronto, operates 8,006 convenience stores throughout North America and 2,217 in Europe, including Scandinavia (Norway, Sweden and Denmark), Poland, the Baltic States (Estonia, Latvia and Lithuania) and Russia. In the three months ended October 11, 2015, Couche-Tard’s sales fell 5.7%, to $8.44 billion from $8.95 billion a year earlier (all figures except share price in U.S. dollars). The decline came from lower gasoline prices and the sale of its aviation-fuel business late last year. The higher U.S. dollar also cut the contribution from the company’s European operations. Without one-time items, earnings per share rose 20.0%, to $0.66 from $0.55, partly due to higher profit margins on merchandise and fuel. The company also paid less interest as it reduces the debt it took on to fund acquisitions, including its $2.7-billion purchase of Norway’s Statoil Fuel & Retail gas station chain in June 2012. As well, in March 2015, it paid $1.7 billion for the Pantry, which has more than 1,500 convenience stores in 13 southern U.S. states....

As consumers, particularly baby boomers, become more health conscious, they are eating fewer canned and packaged foods. In response, ConAgra and Campbell Soup are switching to organic ingredients and putting less salt and sugar in their products. Both firms are also cutting costs and investing in their core brands, which should spur their earnings— and dividends— in the long run. CONAGRA FOODS INC. $42 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 432.9 million; Market cap: $18.2 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.4%; TSINetwork Rating: Above Average; www.conagrafoods.com) makes packaged foods, including Chef Boyardee canned pasta, Hunt’s tomato sauce, Peter Pan peanut butter, Orville Redenbacher popcorn and Reddi-wip whipped cream....