acquisition

RESTAURANT BRANDS INTERNATIONAL INC., $52.21, Toronto symbol QSR, took its current form on December 12, 2014, as a result of Burger King Worldwide’s (old symbol BKW) acquisition of Tim Hortons Inc. (old symbol THI). Restaurant Brands is the world’s third-largest fast-food chain, after McDonald’s and Yum Brands, with 14,372 Burger King outlets and 4,671 Tim Hortons locations in 100 countries. In the three months ended December 31, 2014, the company lost $514.2 million, or $2.52 a share, compared to a profit of $66.8 million, or $0.19 (all amounts except share price in U.S. dollars). If you exclude merger costs and other unusual items, gross earnings before depreciation, interest and taxes rose 23.1%....

RESTAURANT BRANDS INTERNATIONAL $40.97 (New York symbol QSR; TSINetwork Rating: Average) (212-333-3810; www.rbi.com; Shares outstanding: 467.1 million; Market cap: $19.1 billion; Dividend yield: 0.9%) took its current form on December 12, 2014, as a result of Burger King Worldwide’s (old symbol BKW) acquisition of Tim Hortons Inc. (old symbol THI). Restaurant Brands is the world’s third-largest fastfood operator, after McDonald’s and Yum Brands, with 14,372 Burger King restaurants and 4,671 Tim Hortons outlets in 100 countries. In the three months ended December 31, 2014, the company lost $514.2 million, or $2.52 a share, compared to a profit of $66.8 million, or $0.19 (all amounts except share price and market cap in U.S. dollars). Excluding merger-related costs and other unusual items, operating earnings rose 23.1%....

INTACT FINANCIAL CORP. $90.64 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341- 1464; www.intactfc.com; Shares outstanding: 131.5 million; Market cap: $11.9 billion; Dividend yield: 2.3%) is expanding in Western Canada by purchasing Canadian Direct Insurance from Canadian Western Bank (symbol CWB on Toronto) for $197 million. Canadian Direct offers home, auto and travel insurance, mainly in Alberta and B.C. The acquisition also lets Intact expand its higherprofit- margin direct-to-consumer distribution channel. Direct distribution lets consumers get initial online quotes at any time and then use extended call centre hours to speak with—and purchase policies from— licensed insurance representatives. In conjunction with this purchase, Intact plans to merge its Grey Power brand into its belairdirect brand to reduce the number of banners it offers. However, it will continue to offer Grey Power’s discount rates to drivers over the age of 50....

WYNDHAM WORLDWIDE $91.39 (New York symbol WYN; TSINetwork Rating: Extra Risk) (973- 753-6000; www.wyndhamworldwide.com; Shares outstanding: 123.3 million; Market cap: $10.9 billion; Dividend yield: 1.5%) is one of the world’s largest hospitality companies, with 7,650 franchised hotels and over 661,000 rooms worldwide. Wyndham also manages vacation resorts, rental properties, luxury clubs and time-shares. The company now has 107,000 vacation-rental properties in 100 countries. In the three months ended December 31, 2014, Wyndham’s revenue rose 3.0%, to $1.23 billion from $1.20 billion a year earlier. The company gets most of its revenue from vacation rather than business travel, and vacation bookings rose in the latest quarter. That helped push up its occupancy rate by 3.1%....

DirectCash Payments Inc., $16.95, symbol DCI on Toronto (Shares outstanding: 17.6 million; Market cap: $298.1 million; www.directcash.net), is the largest non-bank owner and operator of automated teller machines (ATMs) in Canada and Australia and the third-largest in the U.K. It also operates ATMs in Mexico and New Zealand. In addition, DirectCash serves credit unions and other small financial institutions that outsource their ATM transactions. The company now has 20,231 active ATMs, up 3.6% from 19,536 a year ago. Its machines processed 31.6 million transactions in the latest quarter, up 11.8% from 28.3 million....

Journey Energy, $5.75, symbol JOY on Toronto (Shares outstanding: 33.0 million; Market cap: $189.8 million; www.journeyenergy.ca), is an oil and gas producer that’s focused on southern Alberta. Its production is 55% oil and 45% natural gas. The company first sold shares to the public at $12 each and began trading on Toronto on June 19, 2014. In the three months ended September 30, 2014, Journey’s production jumped 103.5%, to 11,002 barrels of oil equivalent from 5,408 a year earlier. The gains mainly came from a major acquisition that closed in March 2014. Cash flow rose 24.5%, to $0.61 a share from $0.49....

Milestone Apartment REIT, $13.67, symbol MST.UN on Toronto (Units outstanding: 53.5 million; Market cap: $731.4 million; www.milestonereit.com), holds 57 “garden-style” apartment properties with 19,161 units in 12 cities throughout the U.S. Sunbelt. Milestone continues to grow by acquisition: it recently bought Heritage on Millenia, a 303-unit apartment community in South Orlando, Florida, for $40.0 million U.S.; in January 2015 it bought the Manor Homes of Arborwalk, a 280-unit apartment community in Lee’s Summit, in the Kansas City region, for $37.2 million U.S. At the same time, the trust is selling older properties to improve its portfolio’s overall quality. Growth by acquisition adds risk. Offsetting some of that risk is the fact that the Sunbelt’s population is forecast to grow by 9% over the next five years, ahead of the country’s overall rate of 5%....

FIRSTSERVICE CORP., $71.99, symbol FSV on Toronto, announced this week that it plans to spin off its Colliers International commercial real estate business. It will form a new company, called Colliers International Group Inc., and hand out shares to FirstService shareholders. Colliers is one of the world’s top three commercial real estate firms, offering a range of services in the U.S., Canada, Europe, Australia, New Zealand, Asia and Latin America. In 2014, this subsidiary had revenue of $1.7 billion U.S. After the spinoff, FirstService will carry on with its residential property management and property improvement operations, which reported $1.1 billion U.S. of revenue in 2014. FirstService shareholders won’t pay income taxes on the transaction until they sell shares of the new FirstService or Colliers International....

AT&T INC. $34 (New York symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 5.2 billion; Market cap: $176.8 billion; Price-to-sales ratio: 1.3; Dividend yield: 5.5%; TSINetwork Rating: Average; www.att.com) is the largest wireless provider in the U.S., with 120.6 million subscribers. Wireless accounts for 55% of AT&T’s revenue and 75% of its earnings.

The remaining 45% of revenue and 25% of earnings comes from its wireline division, which sells phone services, television packages and high-speed Internet access to 34.4 million customers.

Shift to wireless fuelled sales

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BUCKEYE PARTNERS L.P. $77 (New York symbol BPL; Income Portfolio, Utilities sector; Units outstanding: 127.0 million; Market cap: $9.8 billion; Price-to-sales ratio: 1.5; Dividend yield: 5.9%; TSINetwork Rating: Average; www.buckeye.com) operates over 9,600 kilometres of pipelines in the northeastern and midwestern U.S. Its network pumps gasoline, jet fuel and other petroleum products. The partnership also owns oil and gas storage terminals.

Buckeye continues to expand by acquisition. In December 2013, it paid Hess Corp. (New York symbol HES) $850 million for 19 oil-storage terminals on the U.S. east coast and one on the Caribbean island of St. Lucia. It now has over 120 terminals.

In September 2014, it paid $860 million for 80% of a new firm that operates several oil-processing plants on the U.S. Gulf Coast. The deal included a deepwater oil-transfer terminal in Corpus Christi, Texas, as well as storage tanks and pipelines.

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