CAE Inc.

CAE INC. $9.33 has won a contract to train maintenance technicians for the 17 new Hercules planes that will replace Canada’s existing fleet of military transport aircraft. The multi-year deal is worth $90 million. That’s small next to CAE’s annual revenue of $1.6 billion. However, military customers now account for just over half of CAE’s revenue and earnings. That cuts its exposure to the cyclical airline industry. Best Buy. MOLSON COORS CANADA INC. $45 has raised its quarterly dividend by 16.7%, to $0.28 U.S. a share from $0.24 U.S. The new annual rate of $1.12 U.S. yields 2.6%. Buy. MANITOBA TELECOM SERVICES INC. $28 has introduced a dividend reinvestment plan that lets shareholders use their cash dividends to buy new shares at a 3% discount to the market price. Buy....

BANK OF NOVA SCOTIA, $49.23, Toronto symbol BNS, rose 3% this week after the bank reported higher earnings and revenue in its latest quarter. In the three months ended April 30, 2010, Bank of Nova Scotia earned a record $1.1 billion, or $1.02 a share. That’s up 25.8% from $872 million, or $0.81 a share, a year earlier. The latest earnings also beat the consensus estimate of $0.91 a share. Revenue rose 7.7%, to $3.9 billion from $3.7 billion. Most of the earnings increase came from the Canadian retail-banking division, which supplies 45% of the bank’s total earnings. This division’s profits jumped 42.4%, mainly because low interest rates spurred demand for mortgages and personal loans....

BANK OF MONTREAL $62 (Toronto symbol BMO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 557.3 million; Market cap: $34.6 billion; Price-to-sales ratio: 2.2; Dividend yield: 4.5%; SI Rating: Above Average) has purchased AMCORE Bank N.A., which is insolvent. AMCORE has 52 branches in northern Illinois and southern Wisconsin. Bank of Montreal will convert these outlets to its Harris Bank banner; Chicago-based Harris is Bank of Montreal’s main U.S. subsidiary. AMCORE has $2.5 billion U.S. of assets, including $2.0 billion U.S. of loans. As of January 31, 2010, Bank of Montreal had $394 billion of assets. The bank did not say how much it paid for these branches. However, in light of AMCORE’s problems, Bank of Montreal likely got a bargain. As well, U.S. banking regulators will cover 80% of AMCORE’s loan losses. That cuts the risk of this purchase....

TECK RESOURCES LTD., $43.77, Toronto symbol TCK.B, earned a record $908 million in the three months ended March 31, 2010. That’s up 276.8% from $241 million a year earlier. Earnings per share rose 206.0%, to $1.53 from $0.50, on more shares outstanding. One-time items, including the sale of two gold mines in Turkey and a one-third interest in a B.C. hydroelectric dam, boosted the company’s earnings in the latest quarter. Without one-time items, Teck’s earnings would have fallen 4.2%, to $205 million from $214 million. Teck’s cash flow per share fell 42.5%, to $0.70 from $1.22. However, its revenue rose 13.8%, to $1.9 billion from $1.7 billion, largely because of rising copper prices....

BOMBARDIER INC., Toronto symbols BBD.A $5.87 and BBD.B $5.88, continues to win orders for new passenger railcars. This week, the company received an order for 49 additional railcars from France’s regional public-transit authority. That’s in addition to the transit authority’s previous order for 80 railcars. In all, the 129-car order is worth $1.6 billion (all amounts except share price in U.S. dollars). That’s equal to 8% of Bombardier’s annual revenue of $19.7 billion. The company will deliver these trains from June 2013 to mid-2016. As well, Bombardier has started building a new plant in China that will make fuselages for its new CSeries regional jets. The company is also building a new plant in Northern Ireland that will make the wings, and Bombardier will assemble the planes in Montreal. So far, Bombardier has 90 orders for the new plane, worth a total of roughly $7 billion. It will begin delivering the CSeries in 2013....

CAE INC. $9.53 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 256.3 million; Market cap: $2.4 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.3%; SI Rating: Average) continues to expand its medical-simulator operations. It recently teamed up with Ornge, which operates Ontario’s air-ambulance system. CAE will use its simulators and classroom instruction to train Ornge’s paramedics to safely provide patient care in helicopters. The company did not reveal the size of this contract. But deals like this help CAE offset its exposure to the highly cyclical commercial-airline industry. CAE is a buy.

CANADIAN NATIONAL RAILWAY CO. $54 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 471.0 million; Market cap: $25.4 billion; Price-to-sales ratio: 3.3; Dividend yield: 2.0%; SI Rating: Above Average) is spending $100 million to build a new rail hub in Calgary. To put this figure in context, CN earned $1.5 billion, or $3.24 a share, in 2009. When this facility opens in 2013, it will make CN more efficient by speeding up the flow of trains in western Canada. CN Rail is a buy....

MDS INC., $8.30, Toronto symbol MDS, hopes to complete the sale of its MDS Analytical Technologies business by the end of January. This division makes mass spectrometers that detect and measure substances in blood and other patient samples. The sale will generate $650 million for MDS (all amounts except share price in U.S. dollars). It will use $400 million to $450 million of these funds to buy back shares. MDS is still looking to sell its pharma-services division, which conducts contract-drug research for pharmaceutical companies. When it does sell, MDS will probably use the proceeds for more share buybacks....

Next week, Wall Street Stock Forecaster, our newsletter that focuses on the U.S. stock markets, will reveal its #1 pick for 2010. Don’t miss this unique opportunity to profit. If you’re not already a Wall Street Stock Forecaster subscriber, click here to learn how you can get one month free when you subscribe today. SUNCOR ENERGY INC., $36.71, Toronto symbol SU, will cut 1,000 jobs by the end of 2010. That’s on top of the 1,000 jobs Suncor has already cut following its takeover of Petro-Canada in August 2009. In total, these cuts represent about 16% of the 12,900 employees who worked for both companies before the takeover. Suncor did not say how much these new cuts would cost it, but it still expects the Petro-Canada takeover to save it $300 million to $400 million a year....

BANK OF NOVA SCOTIA, $47.51, Toronto symbol BNS, fell 3% this week, despite reporting higher earnings and revenue in its latest fiscal year. The bank earned $3.5 billion in the year ended October 31, 2009. That’s up 13.0% from $3.1 billion in the prior year. Earnings per share rose 8.5%, to $3.31 from $3.05, on more shares outstanding. If you exclude writedowns of securities, the bank would have earned $3.70 a share. That beat the $3.69 a share that analysts were expecting. The bank’s loan-loss provisions remained high because of the weak economy: it set aside $1.7 billion to cover bad loans in the latest fiscal year, up 176.8% from $630 million in the prior year. This figure will probably stay high until the second half of fiscal 2010....