holding company

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WAL-MART STORES INC., $69.85, New York symbol WMT, has expanded its existing relationship with MCKESSON CORP., $182.29, New York symbol MCK. McKesson currently supplies prescription drugs to Wal-Mart’s in-store pharmacies in the U.S. Under this new deal, the two companies will team up to buy generic drugs in bulk. This will help Wal-Mart keep its pharmacy costs down. The long-term deal also cuts McKesson’s risk. Meanwhile, Wal-Mart sales in the quarter ended April 30, 2016, rose 0.9%, to $115.9 billion from $114.8 billion a year earlier. That beat the consensus forecast of $113.2 billion....

PROCTER & GAMBLE CO. $80 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $216.0 billion; Price-to-sales ratio: 3.0; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.pg.com) is one of the world’s largest makers of household and personal care goods. It began operating in the U.S. in 1837, and now sells its products in over 180 countries. Overseas markets account for 60% of its total sales. The company has five main business lines: fabric and home care products such as Tide laundry detergent (29% of fiscal 2015 sales, 24% of earnings); baby and family care goods, including Pampers diapers (27%, 26%); beauty items such as Olay cosmetics (24%, 23%); grooming products, including Gillette razors (10%, 16%); and health care items such as Crest toothpaste (10%, 11%). Wal-Mart accounts for 14% of the company’s sales. In response to rising competition from generic products, Procter is narrowing its focus from 166 different brands to 65. Of those remaining brands, 21 have annual sales of over $1 billion. Another 11 have annual sales of between $500 million and $1 billion....

In 2012, Procter & Gamble began a major restructuring that included selling dozens of its less-important brands, closing plants and cutting jobs. The company expects to finish the plan in the next few months. Those efforts will greatly improve Procter’s long-term profitability, and spur its stock price. Higher earnings will also give it more room to buy back shares and hike dividends. PROCTER & GAMBLE CO. $80 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $216.0 billion; Price-to-sales ratio: 3.0; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.pg.com) is one of the world’s largest makers of household and personal care goods. It began operating in the U.S. in 1837, and now sells its products in over 180 countries. Overseas markets account for 60% of its total sales....

A: Loral Space & Communications Ltd., $36.51 symbol LORL on Nasdaq (Shares outstanding: 30.9 million; Market cap: $1.1 billion, www.loral.com), is a holding company with interests in two satellite communication providers: Loral holds 62.8% of Ottawa-based Telesat. (Canada’s Public Sector Pension Investment Board owns the remaining 37.2%.) This business owns 15 satellites that distribute video signals for broadcasters, cable networks and satellite TV providers. Its clients include major broadcasters in Canada and the U.S. as well as satellite TV providers such as Bell TV in Canada and EchoStar/DISH Network in the U.S. In Addition, Telesat provides data and voice transmission services to businesses and government departments. Loral also owns 56.0% of XTAR, a joint venture with a group of Spanish telecommunications providers. XTAR provides satellite communication services to U.S. and European military and diplomatic clients....

ALPHABET INC., Nasdaq symbols GOOG (class C non-voting), $718.77, and GOOGL (class A voting), $737.77, is the new holding company for Google’s Internet search business and its smaller, riskier operations. The company calls those smaller businesses its “Other Bets”; they sell home thermostats, high-speed Internet and digital TV services—among other tech products. In the three months ended March 31, 2016, Alphabet’s revenue rose 17.4%, to $20.3 billion from $17.3 billion a year earlier. The Google search engine business accounted for 99% of the total. If you exclude traffic acquisition costs (fees that Google pays affiliates to redirect traffic to its websites), Alphabet’s revenue rose 18.4% to $16.5 billion. On that basis, revenue just missed the consensus forecast of $16.6 billion....

ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $39 and ACO.Y [class II voting] $39; Income Portfolio, Utilities sector; Shares outstanding: 115.0 million; Market cap: $4.5 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.atco.com) gets most of its earnings from its 53.1% stake in Canadian Utilities (see page 44). It also owns 75.5% of ATCO Structures & Logistics, which makes temporary buildings for construction, mining and energy exploration firms; Canadian Utilities owns the other 24.5%. In December 2015, the company sold its ATCO Emissions Management subsidiary for $60 million. This business helps producers of oil, gas and electricity reduce air and noise pollution....

In addition to TransCanada (see page 41), we like the outlook of these four utilities. Like TransCanada, Emera and Fortis are expanding in the U.S. These purchases cut their reliance on Canada, and should enhance their earnings and dividends for years to come. Canadian Utilities and ATCO have both suffered lately due to their high exposure to Alberta, where low oil prices have hurt the economy and power prices. However, their new projects should let them continue to raise their dividends....

ALPHABET INC. (Nasdaq symbols GOOG $741 [class C: non-voting] and GOOGL $760 [class A: one vote per share]; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 688.3 million; Market cap: $517.8 billion; Price-to-sales ratio: 6.8; No dividends paid; TSINetwork Rating: Above Average; www.abc.xyz) is the new holding company for Google’s Internet search business and its smaller, riskier operations....

ALPHABET INC. (Nasdaq symbols GOOG $741 [class C: non-voting] and GOOGL $760 [class A: one vote per share]; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 688.3 million; Market cap: $517.8 billion; Price-tosales ratio: 6.8; No dividends paid; TSINetwork Rating: Above Average; www.abc.xyz) is the new holding company for Google’s Internet search business and its smaller, riskier operations. These smaller businesses, which it calls “Other Bets,”offer home thermostats and high-speed Internet and digital TV services. Among these Other Bets is Boston Dynamics, a firm developing advanced robotic technologies. Alphabet purchased this company in 2013. However, developing commercially viable robots is taking much longer than Alphabet anticipated. As a result, the company is now planning to sell Boston Dynamics. While the sale will have little impact on Alphabet’s overall revenue and earnings, it illustrates the benefits of the company’s reorganization. It also shows its dedication to develop profitable new businesses....