holding company

DUNDEE CORP. $22 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 55.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 1.7; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) is a holding company with subsidiaries in wealth management, real estate, resources and agriculture.

In the three months ended March 31, 2012, Dundee earned $32.5 million, up 129.2% from $14.2 million a year earlier. Per share earnings jumped 211.8%, to $0.53 from $0.17, on fewer shares outstanding.

The increase resulted from much higher returns on the company’s various investments during the latest quarter: $21.6 million compared to just $2.3 million a year ago. Dundee’s revenue rose 11.4%, to $131.3 million from $117.8 million.

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POTASH CORP. OF SASKATCHEWAN $45 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 858.9 million; Market cap: $38.7 billion; Price-to-sales ratio: 4.5; Dividend yield: 1.3%; TSINetwork Rating: Average; www.potashcorp.com) has gained roughly 17% since the middle of June 2012. That’s because hot, dry weather in the U.S. could reduce this year’s corn harvest. In response, farmers are applying more fertilizer to boost their crop yields. As well, corn needs more potash than other crops. The spike in demand has pushed up potash prices. Moreover, the long-term outlook for potash and other fertilizers remains bright, mainly due to rising demand for better food in fast-growing countries such as China, India and Brazil....

ALIMENTATION COUCHE-TARD INC., $40.67, symbol ATD.B on Toronto, recently agreed to buy Norway’s Statoil Fuel & Retail ASA for $2.8 billion U.S. That’s equal to 39% of Couche-Tard’s $7.3-billion market cap. Statoil Fuel has over 1,700 gas stations in Scandinavia and over 550 in Central and Eastern Europe. The company accounts for over 30% of convenience store sales in Norway, Sweden, Denmark, Latvia and Estonia, and is among the top five in both Lithuania and Poland. Norway’s largest North Sea oil producer, government-controlled Statoil ASA, owns 54% of publicly traded Statoil Fuel....

ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $74 and ACO.Y [class II voting] $74; Income Portfolio, Utilities sector; Shares outstanding: 57.7 million; Market cap: $4.3 billion; Priceto- sales ratio: 1.1; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.atco.com) is a holding company. Its main subsidiary is 52.7%-owned Canadian Utilities (see left). It also owns 75.5% of ATCO Structures & Logistics, which builds temporary buildings for construction companies and energy exploration firms; Canadian Utilities owns the remaining 24.5%.

In the three months ended March 31, 2012, ATCO’s revenue rose 9.1% to $1.1 billion from $1.0 billion a year earlier. That’s mainly because new contracts pushed up revenue at the structures division by 32.2%. Earnings rose 10.0%, to $121 million from $110 million. Earnings per share rose 10.6%, to $2.09 from $1.89, on fewer shares outstanding.

Based on current prices, you can buy a share of ATCO for $74 and get roughly $83 worth of Canadian Utilities. That means you get ATCO’s non-utility businesses for free.

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Uranium Participation Corp., $5.25, symbol U on Toronto (Shares outstanding: 106.4 million; Market cap: $558.6 million; www.uraniumparticipation.com), is a holding company that was created to invest almost all of its assets in uranium oxide (U3O8). Denison Mines (symbol DML on Toronto) manages Uranium Participation Corp. The company began trading in May 2005 after it issued 20 million units at $5 each to raise $100 million. Each unit consisted of one common share of Uranium Participation Corp. and one-quarter of one warrant. Each whole warrant entitled the holder to acquire one common share at $6.25 per share until May 2007. Uranium prices reached an all-time high of $136 U.S. a pound in 2007 on fears of shortages. As a result, Uranium Participation Corp. shares hit an all-time high of almost $19. However, the shortages never materialized. Uranium prices then steadily declined to a low of $40 U.S. a pound in 2009, then rebounded to $64 U.S. in February 2011. That rebound moved Uranium Participation Corp. units from roughly $6 a unit up to $9.50....

These two utilities offer an attractive combination of growth and income. Investors who are looking for stronger growth should choose ATCO, while income seekers should opt for Canadian Utilities. CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $72 and CU.X [class B voting] $72; Income Portfolio, Utilities sector; Shares outstanding: 127.6 million; Market cap: $9.2 billion; Price-to-sales ratio: 3.0; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.canadianutilities.com) distributes electricity and natural gas in Alberta. It also operates 19 power plants in Canada, Australia and the U.K. ATCO Ltd. (see below) owns 52.7% of the company. In July 2011, Canadian Utilities paid $1.1 billion for a company that distributes natural gas in Perth, Australia. This purchase helped push up revenue by 3.5% in the first quarter of 2012, to $837 million from $809 million a year earlier. Earnings rose 9.7%, to $193 million from $176 million. Because it had more shares outstanding, its earnings per share rose at a slower pace of 8.3%, to $1.44 from $1.33....

Many leading U.S. and Canadian multinational companies stand to gain from rising consumer and business demand in foreign markets. These global companies also cut risk for investors. We generally advise against investing directly in foreign markets, especially emerging markets. These markets are highly volatile, and growth can be swift. But investors enjoy far less legal protection than they do in more developed countries. However, high-quality U.S. and Canadian companies with profitable international interests can be good additions to almost any portfolio. Canadian stocks with substantial foreign operations (especially outside the U.S.) include the following:...

DUNDEE CORP. $24 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 55.0 million; Market cap: $1.3 billion; Price-to-sales ratio: 6.6; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) is a holding company with subsidiaries in wealth management, real estate, resources and agriculture.

Dundee is riskier than the big five banks. That’s because sales of individual investments can have a big impact on its earnings. For example, in 2011, it recorded an $870.8-million gain on the sale of subsidiary DundeeWealth. Without that gain, Dundee’s earnings fell 13.1%, to $173.2 million from $199.3 million in 2010. Earnings per share rose 5.9%, to $2.17 from $2.05, on fewer shares outstanding. Revenue fell 15.7%, to $574.0 million from $680.8 million.

Dundee is still a buy.

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Uranium Participation Corporation, $5.56, symbol U on Toronto (Shares outstanding: 106.4 million; Market cap: $591.6 million; www.uraniumparticipation.com), is a holding company that was created to invest almost all of its assets in uranium oxide (U3O8). Denison Mines (symbol DML on Toronto) manages Uranium Participation Corporation. The company began trading in May 2005 after it issued 20 million units at $5 each to raise $100 million. Each unit consisted of one common share of Uranium Participation Corporation and one-quarter of one warrant. Each whole warrant entitled the holder to acquire one common share at $6.25 per share until May 2007. Uranium prices reached an all-time high of $136 U.S. a pound in 2007 on fears of shortages. As a result, shares of Uranium Participation Corporation hit an all-time high of almost $19. However, the shortages never materialized. Uranium prices steadily declined to a low of $40 a pound in 2009, then rebounded to $64 in February 2011. Uranium Participation Corporation’s shares hit a low near $5 in the fall of 2008. Since then, they have mainly stayed between $6 and $9.50....

DUNDEE CORP. $24 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 55.0 million; Market cap: $1.3 billion; Price-to-sales ratio: 6.6; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) is a holding company with subsidiaries in wealth management, real estate, resources and agriculture. Dundee is riskier than the big five banks. That’s because sales of individual investments can have a big impact on its earnings. For example, in 2011, it recorded an $870.8-million gain on the sale of subsidiary DundeeWealth. Without that gain, Dundee’s earnings fell 13.1%, to $173.2 million from $199.3 million in 2010. Earnings per share rose 5.9%, to $2.17 from $2.05, on fewer shares outstanding. Revenue fell 15.7%, to $574.0 million from $680.8 million. Dundee is still a buy.