dividends paid

In response to the BP oil spill in the Gulf of Mexico, the Obama administration has banned some offshore operations in the region. The ban, which is being challenged in court, affects oil and gas companies and firms that operate, service and supply drilling rigs. To cut your risk, we recommend focusing on service companies that mainly operate onshore, like Pason Systems and Pulse Seismic. PASON SYSTEMS $11.06 (Toronto symbol PSI; SI Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 81.5 million; Market cap: $901.4 million; Dividend yield: 2.9%) rents equipment that its customers use to monitor and manage land-based oil rigs. It also sells communications systems, such as its satellite system, which companies use to remotely collect data from their drilling operations. The company serves oil and gas companies and drilling contractors throughout Canada, the U.S., Mexico and Argentina. In the three months ended March 31, 2010, Pason’s revenue rose 4.1%, to $56.4 million from $54.2 million a year earlier. Cash flow per share climbed 8.7%, to $0.25 from $0.23. In late 2009, Pason bought Petron Industries, which makes instruments for both onshore and offshore drilling rigs. Pason paid $18 million U.S., plus $7 million U.S. over three years conditional on rising offshore revenue. Petron will add to Pason’s onshore customer base in the U.S., and let it expand its services to offshore rigs as that market recovers....

AEROPOSTALE INC. $29.17 (New York symbol ARO; SI Rating: Extra Risk) (646-485-5410; www.aeropostale.com; Shares outstanding: 93.5 million; Market cap: $2.7 billion; No dividends paid) reports that its June same-store sales rose 8% from a year earlier. The company’s low prices and popular styles were the main reasons for its strong performance. For the five-week period ended July 4, 2010, total sales (including new stores) were $186.8 million. That’s a 14% increase over the same period a year earlier. Aeropostale’s profit margins rose, as well, so it’s getting the full benefit of the higher sales. Unlike many clothing retailers, it’s not boosting sales by selling discounted merchandise. Aeropostale is still a buy.

FIRSTSERVICE CORP. $21.69 (Toronto symbol FSV; SI Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.9 million; Market cap: $627.0 million; No dividends paid) serves the following areas of the real-estate market: commercial real estate; residential property management; and property improvement. FirstService has more than 17,000 employees worldwide. FirstService’s revenue rose 11.6% in the three months ended March 31, 2010 (all figures except share price in U.S. dollars), to $402.4 million from $361 million a year earlier. Excluding one-time items, earnings per share jumped 87.5%, to $0.15 from $0.08. Cash flow jumped to $0.35 a share from $0.02 a share. The big gains in earnings and cash flow came from a turnaround in results in Firstservice’s commercial real estate division. The improving economy pushed up revenue at that division by 30% in the latest quarter, to $154.1 million....

THE CHURCHILL CORP. $18.02 (Toronto symbol CUQ: SI Rating: Speculative) (780-454-3667; www.churchillcorporation.com; Shares outstanding: 24.5 million; Market cap: $441.8 million; No dividends paid) has completed its $180-million share and debenture issue. The funds will help pay for its $380-million purchase of Seacliff Construction. Seacliff provides general-contracting, electrical contracting and earth-moving services, mostly in western Canada. Aecon Group (Toronto symbol ARE) bought three million of Churchill’s new shares. It also bought existing Churchill shares in the open market. Together, these purchases give it a 14.9% stake in Churchill. Aecon is one of Canada’s largest construction and infrastructure-development companies. Aecon hopes the investment will let both companies explore areas of mutual interest. However, it says it does not intend to acquire control of Churchill....

NORTHGATE MINERALS CORP. $3.13 (Toronto symbol NGX; SI Rating: Speculative) (604-681-4004; www.northgateminerals.ca; Shares outstanding: 290.9 million; Market cap: $910.5 million; No dividends paid) is focused on building a mine at its Young-Davidson gold property in northern Ontario. The $339-million mine, which would produce 180,000 ounces of gold per year, is scheduled to start up in 2012. After two years, its production would rise to 190,000 ounces. Northgate also owns the Kemess South open-pit gold/copper mine in north-central B.C. However, it expects to exhaust this mine’s reserves by late 2010....

IAMGOLD $16.84 (Toronto symbol IMG; SI Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 371.8 million; Market cap: $6.3 billion; No dividends paid) has started production at its Essakane gold mine in the west African country of Burkina Faso. The $350-million mine will produce 315,000 ounces of gold a year. That will raise IAMGold’s annual production by about 25%, to over one million ounces per year. Operating in Africa always involves some political and economic risk. However, Burkina Faso is a relatively stable country. As well, the government of Burkina Faso holds a 10% interest in the Essakane mine. IAMGold owns the other 90%. IAMGold is a buy.

SYMANTEC CORP. $14.59 (Nasdaq symbol SYMC; SI Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 798.9 million; Market cap: $11.7 billion; No dividends paid) has signed a multi-year extension of its agreement with Hewlett-Packard to distribute its Norton Internet Security software. Norton Internet Security is a set of programs that fight hackers, viruses and other online threats. Under the deal, Hewlett-Packard will continue to preinstall a 60-day free trial subscription to Norton Internet Security on all of its personal computers, laptops and netbooks. Users can then buy a subscription to Norton Internet Security for $54.99 a year. Deals like this are very important for software sellers like Symantec. That’s because many consumers like the convenience of buying preinstalled programs right from their computers....

GABRIEL RESOURCES $4.93 (Toronto symbol GBU; SI Rating: Speculative) (416-955-9200; www.gabrielresources.com; Shares outstanding: 341.0 million; Market cap: $1.7 billion; No dividends paid) and EUROPEAN GOLDFIELDS $7.13 (Toronto symbol EGU; SI Rating: Speculative) (44 (20) 7408 9534; www.egoldfields.com; Shares outstanding: 182.4 million; Market cap: $1.3 billion; No dividends paid) have both received good news about their development projects in Romania. Both projects would use cyanide in the mining process. The European Commissioner for the Environment said that the European Commission sees no environmental or health justification for a general ban of cyanide in mining activities. Gabriel is aiming to develop its 80%-owned Rosia Montana gold project in Romania. However, despite the good news, Rosia Montana still faces considerable environmental and political opposition....

PRECISION DRILLING CORP. $7.33 (Toronto symbol PD; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 275.6 million; Market cap: $2.0 billion; Price-to-sales ratio: 1.8; No dividends paid since February 2009; SI Rating: Extra Risk) provides contract-drilling services, so it should also benefit from more onshore exploration in the wake of the BP oil spill. It owns 352 land-based rigs in Canada, the U.S. and Mexico. The company also recently renegotiated some of the loans it used to buy U.S.-based contract driller Grey Wolf Inc. in 2008. That will cut its annual interest costs by $15 million. Precision earned $62.0 million, or $0.22 a share, in the first three months of 2010. Precision Drilling is a buy.

MDS INC. $9.62 (Toronto symbol MDS; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 67.2 million; Market cap: $646.5 million; Price-to-sales ratio: 9.0; No dividends paid since October 2006; SI Rating: Extra Risk) supplies medical isotopes for cancer detection and research. The company gets most of these isotopes from the Chalk River nuclear reactor near Ottawa. Atomic Energy of Canada Ltd., which operates the reactor, shut it down in May 2009 after it discovered a water leak. Atomic Energy should restart the reactor by the end of July 2010. Meanwhile, the shutdown continues to hurt MDS’s revenue and earnings. In its second quarter, which ended April 30, 2010, MDS lost $52 million, or $0.51 a share (all amounts except share price and market cap in U.S. dollars). A year earlier, it lost $6 million, or $0.06 a share. However, the latest earnings included a $27-million non-cash foreign-exchange charge....