maple leaf foods
Toronto symbol MFI, is Canada’s largest food processing company. Its products include fresh and prepared meats and poultry, mostly under the Maple Leaf and Schneider brands. It also makes fresh and frozen bakery products through 89.8%-owned Canada Bread Co. Ltd.
These two leading food makers continue to benefit from the recent drop in the Canadian dollar, which enhances the value of their overseas sales. However, both trade at high multiples to their projected earnings. That could hurt their share prices if the dollar rebounds. SAPUTO INC. $40 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 392.9 million; Market cap: $15.7 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.4%; TSINetwork Rating: Average; www.saputo.com) is Canada’s largest producer of dairy products, including milk, butter and cheese. It also operates dairies in the U.S., Australia and Argentina. The company’s sales rose 2.8% in its fiscal 2016 third quarter, which ended December 31, 2015, to $2.9 billion from $2.8 billion a year earlier. It gets 65% of its sales from outside Canada, and the lower Canadian dollar added $261 million to the latest quarter’s sales. Lower selling prices for cheese and butter cut sales by $191 million....
BANK OF NOVA SCOTIA, $59.50, Toronto symbol BNS, reported better-than-expected results this week. It also raised its dividend.
For the fiscal 2016 first quarter, earnings rose 5.1%, to $1.8 billion from $1.7 billion a year earlier. Due to fewer shares outstanding, earnings per share gained 5.9%, to $1.43 from $1.35. That beat the consensus estimate of $1.42.
The bank’s revenue also beat the consensus forecast, of $6.3 billion. It rose 8.6%, to $6.4 billion from $5.9 billion.
Earnings at its Canadian banking division (49% of the total) rose 7.4%. That’s partly due to a $1.7 billion deal with J.P. Morgan Chase to buy its Canadian credit card operations. This includes MasterCard and Sears Canada credit card accounts.
The international division (31% of earnings) reported 20.9% higher profits, thanks to strong loan demand in Latin America and favourable currency rates. However, earnings at the securities-trading division (20%) fell 9.4% on higher loan-loss provisions.
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For the fiscal 2016 first quarter, earnings rose 5.1%, to $1.8 billion from $1.7 billion a year earlier. Due to fewer shares outstanding, earnings per share gained 5.9%, to $1.43 from $1.35. That beat the consensus estimate of $1.42.
The bank’s revenue also beat the consensus forecast, of $6.3 billion. It rose 8.6%, to $6.4 billion from $5.9 billion.
Earnings at its Canadian banking division (49% of the total) rose 7.4%. That’s partly due to a $1.7 billion deal with J.P. Morgan Chase to buy its Canadian credit card operations. This includes MasterCard and Sears Canada credit card accounts.
The international division (31% of earnings) reported 20.9% higher profits, thanks to strong loan demand in Latin America and favourable currency rates. However, earnings at the securities-trading division (20%) fell 9.4% on higher loan-loss provisions.
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MANITOBA TELECOM SERVICES INC., $30.24, Toronto symbol MBT, has agreed to sell its Allstream division, which sells telephone, Internet and other communication services to businesses across Canada. Allstream supplies 40% of Manitoba Telecom’s revenue. The remaining 60% comes from its MTS division, which has 1.3 million telephone and wireless customers in Manitoba. The buyer is U.S.-based Zayo Group (New York symbol ZAYO), which will pay $465.0 million. Manitoba Telecom will probably use the proceeds to pay down its long-term debt of $677.1 million, which is equal to 28% of its $2.4-billion market cap (or the value of all outstanding shares)....
MAPLE LEAF FOODS INC. $21 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 136.6 million; Market cap: $2.9 billion; Price-to-sales ratio: 0.9; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) will soon complete a multi-year restructuring that mainly involves closing older meat-processing plants and shifting their operations to newer facilities. Thanks to these actions, Maple Leaf’s gross profit margin (gross profits as a percentage of revenue) jumped to 7.1% in the third quarter of 2015 from 0.5% a year earlier. However, the company has faced delays and higher-than-expected costs to start up these new plants, so it now expects to reach its goal of raising its gross profit margin to at least 10% in 2016 instead of 2015. Maple Leaf Foods is a hold.
MAPLE LEAF FOODS INC. $21 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 136.6 million; Market cap: $2.9 billion; Price-to-sales ratio: 0.9; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) will soon complete a multi-year restructuring that mainly involves closing older meat-processing plants and shifting their operations to newer facilities....
MAPLE LEAF FOODS INC. $22 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.8 million; Market cap: $3.1 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) gets 8% of its revenue by exporting packaged meats to the U.S., and the lower Canadian dollar makes these products cheaper to American buyers. The weak dollar also makes imported meats more expensive in Canada.
These benefits come while Maple Leaf takes steps to improve its long-term outlook, including a major restructuring involving closing older plants and shifting their operations to newer facilities. However, it could take a year or more before the company realizes the plan’s full benefits.
Maple Leaf Foods is a hold.
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These benefits come while Maple Leaf takes steps to improve its long-term outlook, including a major restructuring involving closing older plants and shifting their operations to newer facilities. However, it could take a year or more before the company realizes the plan’s full benefits.
Maple Leaf Foods is a hold.
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MAPLE LEAF FOODS INC. $22 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.8 million; Market cap: $3.1 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) gets 8% of its revenue by exporting packaged meats to the U.S., and the lower Canadian dollar makes these products cheaper to American buyers. The weak dollar also makes imported meats more expensive in Canada. These benefits come while Maple Leaf takes steps to improve its long-term outlook, including a major restructuring involving closing older plants and shifting their operations to newer facilities. However, it could take a year or more before the company realizes the plan’s full benefits. Maple Leaf Foods is a hold....
MAPLE LEAF FOODS INC. $24 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 143.1 million; Market cap: $3.4 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.3%; TSINetwork Rating: Average; www.mapleleaf.ca) is Canada’s largest food-processing company. It mainly sells its products, including fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. The company will soon complete a seven-year restructuring that mainly involves closing older plants and shifting their operations to newer facilities. However, it will take several months for the new plants to reach full capacity and increase Maple Leaf’s earnings. Even so, the company expects to increase its gross profit margin to 10% in 2015 from just 0.5% in 2014. The stock has gained 23% since the start of the year and now trades at a somewhat high 31.6 times the $0.76 a share Maple Leaf will likely earn in 2015. The $0.32 dividend yields 1.3%....
Canada is now negotiating the Trans-Pacific Partnership, which would lower trade barriers between 12 countries in the Asia-Pacific region. The TPP could also open Canada’s highly regulated agricultural industry to foreign competitors. That would hurt Saputo and Maple Leaf Foods (see box)—at least initially—though the deal would also help them export their products to more markets. Still, we feel both stocks will make little progress until the TPP is finalized. SAPUTO INC. $30 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 392.9 million; Market cap: $11.8 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) is Canada’s largest producer of dairy products, including milk, butter and cheese. The company also operates dairies in the U.S., Australia and Argentina....
MAPLE LEAF FOODS INC. $24 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 143.1 million; Market cap: $3.4 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.3%; TSINetwork Rating: Average; www.mapleleaf.ca) is Canada’s largest food-processing company. It mainly sells its products, including fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. The company will soon complete a seven-year restructuring that mainly involves closing older plants and shifting their operations to newer facilities. However, it will take several months for the new plants to reach full capacity and increase Maple Leaf’s earnings. Even so, the company expects to increase its gross profit margin to 10% in 2015 from just 0.5% in 2014. The stock has gained 23% since the start of the year and now trades at a somewhat high 31.6 times the $0.76 a share Maple Leaf will likely earn in 2015. The $0.32 dividend yields 1.3%....