merger
PROCTER & GAMBLE CO. $77 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $207.9 billion; Price-to-sales ratio: 2.8; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.pg.com) makes products in five main categories: fabric and home care items, such as Tide laundry detergent (29% of sales, 24% of earnings); baby goods, including Pampers diapers (27%, 26%); beauty products, like Olay cosmetics (24%, 23%); grooming items, including Gillette razors (10%, 16%); and health care products, such as Crest toothpaste (10%, 11%). Wal-Mart supplies 14% of the company’s sales.
Latest sale set to deliver big gains
In the past few years, Procter has sold many of its less profitable brands, including its recent deal to transfer 43 beauty product lines, including Wella, Clairol, Max Factor and CoverGirl, to Coty Inc. (New York symbol COTY).
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Latest sale set to deliver big gains
In the past few years, Procter has sold many of its less profitable brands, including its recent deal to transfer 43 beauty product lines, including Wella, Clairol, Max Factor and CoverGirl, to Coty Inc. (New York symbol COTY).
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Schlumberger Ltd., $72.09, symbol SLB on New York (Shares outstanding: 1.3 billion; Market cap: $91.2 billion; www.slb.com), is the world’s leading oilfield services firm. It works with oil and gas producers from the exploration stage through to production.
Schlumberger feels its North American business is now bottoming out, although it doesn’t expect to see a big near-term rebound. Its earnings won’t likely begin improving until 2016, although that will depend on the direction of oil and gas prices and drilling activity. To maintain its profits, Schlumberger has cut 20,000 jobs so far this year and lowered its capital spending.
Meanwhile, the company is taking advantage of the downturn to buy oilfield equipment maker Cameron International (New York symbol CAM), a maker of valves, blowout preventers and other gear for controlling pressure at drill sites, for $14.8 billion.
The stock trades at 22.5 times this year’s forecast earnings of $3.20 a share. It yields 2.8%.
Schlumberger is okay to hold.
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Schlumberger feels its North American business is now bottoming out, although it doesn’t expect to see a big near-term rebound. Its earnings won’t likely begin improving until 2016, although that will depend on the direction of oil and gas prices and drilling activity. To maintain its profits, Schlumberger has cut 20,000 jobs so far this year and lowered its capital spending.
Meanwhile, the company is taking advantage of the downturn to buy oilfield equipment maker Cameron International (New York symbol CAM), a maker of valves, blowout preventers and other gear for controlling pressure at drill sites, for $14.8 billion.
The stock trades at 22.5 times this year’s forecast earnings of $3.20 a share. It yields 2.8%.
Schlumberger is okay to hold.
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MOLSON COORS CANADA INC. (Toronto symbols TPX.A $91 and TPX.B $91; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 185.0 million; Market cap: $16.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 2.4%; TSINetwork Rating: Average; www.molson coors.com) merged its U.S. brewing operations with those of rival SABMiller in July 2008 to form MillerCoors. Each company has a 50% voting interest in this joint venture, but Miller gets 58% of the profits, while Molson Coors gets 42%.
Since the merger, MillerCoors has saved roughly $1 billion by combining plants and distribution networks (all amounts except share price and market cap in U.S. dollars).
In the quarter ended June 30, 2015, lower raw material, packaging and fuel costs increased the company’s share of earnings from MillerCoors by 9.3% from a year earlier. However, unfavourable currency rates cut its Canadian earnings by 5.5% and its European profits by 21.5%. A restructuring in China also increased losses at its international operations by 56.8%.
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Since the merger, MillerCoors has saved roughly $1 billion by combining plants and distribution networks (all amounts except share price and market cap in U.S. dollars).
In the quarter ended June 30, 2015, lower raw material, packaging and fuel costs increased the company’s share of earnings from MillerCoors by 9.3% from a year earlier. However, unfavourable currency rates cut its Canadian earnings by 5.5% and its European profits by 21.5%. A restructuring in China also increased losses at its international operations by 56.8%.
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NEW GOLD $3.02 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold .com; Shares outstanding: 509.1 million; Market cap: $1.4 billion; No dividends paid) has four mines: the Mesquite project in the U.S., Cerro San Pedro in Mexico, the Peak mine in Australia and the New Afton mine in B.C. New Gold also owns 30% of the El Morro copper/ gold project in Chile, 100% of the Blackwater property in B.C. and 100% of the Rainy River project in Ontario. In the three months ended June 30, 2015, New Gold’s cash flow per share fell 8.3%, to $0.11 from $0.12 a year earlier. That’s because the company’s gold and copper production fell, as did prices....
Consumers are increasingly switching to higher priced wines and beers. That’s good news for Molson Coors and Andrew Peller (see box), as these premium brands are more profitable than their regular products. That gives both companies plenty of room to keep raising their dividends. MOLSON COORS CANADA INC. (Toronto symbols TPX.A $91 and TPX.B $91; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 185.0 million; Market cap: $16.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 2.4%; TSINetwork Rating: Average; www.molson coors.com) merged its U.S. brewing operations with those of rival SABMiller in July 2008 to form MillerCoors. Each company has a 50% voting interest in this joint venture, but Miller gets 58% of the profits, while Molson Coors gets 42%. Since the merger, MillerCoors has saved roughly $1 billion by combining plants and distribution networks (all amounts except share price and market cap in U.S. dollars)....
YAMANA GOLD $2.13 (Toronto symbol YRI; TSINetwork Rating: Speculative)(416-815-0220; www.yamana.com; Shares outstanding: 946.5 million; Market cap: $1.9 billion; Dividend yield: 3.7%) owns eight operating gold mines in Mexico, Brazil, Chile and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold mine in Argentina and has a number of other properties in advanced stages of development.
In the three months ended June 30, 2015, the company’s gold production rose 7.1%, to 298,818 ounces from 279,118 a year earlier. That was mainly due to its 50% stake in the Canadian Malartic gold mine in Quebec, which it purchased last year; this mine contributed 68,440 ounces to Yamana’s latest quarterly output.
The higher production helped offset a 7.5% decline in gold prices. As a result, Yamana’s cash flow rose slightly, to $149.3 million from $149.0 million. However, cash flow per share fell 15.8%, to $0.16 from $0.19, on more shares outstanding.
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In the three months ended June 30, 2015, the company’s gold production rose 7.1%, to 298,818 ounces from 279,118 a year earlier. That was mainly due to its 50% stake in the Canadian Malartic gold mine in Quebec, which it purchased last year; this mine contributed 68,440 ounces to Yamana’s latest quarterly output.
The higher production helped offset a 7.5% decline in gold prices. As a result, Yamana’s cash flow rose slightly, to $149.3 million from $149.0 million. However, cash flow per share fell 15.8%, to $0.16 from $0.19, on more shares outstanding.
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MONSANTO CO. $97 (New York symbol MON, Aggressive Growth Portfolio; Manufacturing & Industry sector; Shares outstanding: 467.8 million; Market cap: $45.4 billion; Price-tosales ratio: 2.7; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.monsanto.com) has dropped its takeover offer for Switzerland-based rival Syngenta AG, the world’s largest maker of pesticides, herbicides and other agricultural chemicals. A merger would have let Monsanto and Syngenta jointly develop new genetically modified seeds for corn, soybeans and other crops. Syngenta’s expertise would also improve Monsanto’s pesticide products. In addition, the new firm could cut costs and improve its efficiency by combining distribution networks. Monsanto recently increased its bid by 5%, to $47 billion in cash and shares....
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