oil prices

CANADIAN PACIFIC RAILWAY LTD., $74.72, Toronto symbol CP, has appointed Hunter Harrison as a director and its new chief executive officer. Mr. Harrison is the former CEO of Canadian National Railway Co. (Toronto symbol CNR). CP feels Mr. Harrison will duplicate his success at CN, which included improving efficiency and speeding up deliveries. New trains and the recent drop in oil prices should also boost CP’s profitability....

MART RESOURCES, $1.36, symbol MMT on Toronto, jumped over 28% this week after the company declared a special dividend of $0.10 a share, payable on August 8, 2012. Mart will then begin paying quarterly dividends of $0.05 a share starting in September 2012. The stock is now up 288.6% since we first recommended it in our May 2010 issue at $0.35. Mart is focused on developing, producing and drilling for oil at its properties in Africa. The company is currently producing oil at its 50%-held Umusadege field in Nigeria....

We feel U.S. stocks with large international operations offer investors a great way to tap into fast-growing overseas markets. Tupperware is an excellent example: it gets 60% of its sales from Asia and South America. Moreover, the company’s well-known brands help it quickly increase its sales in new markets and attract more dealers. Tupperware sells its goods through individuals instead of retail stores. These dealers are also an overlooked asset, because Tupperware could use them to sell more products in the future without the cost of setting up new stores and distribution networks....

TUPPERWARE BRANDS CORP. $54 (New York symbol TUP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 55.9 million; Market cap: $3.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.tupperwarebrands.com) gets 70% of its sales by making high-quality products for the home, including plastic food and beverage containers and children’s educational toys. The remaining 30% comes from its beauty-products division, which makes a wide range of cosmetics, bath oils and fragrances.

Markets beyond the U.S. supply 90% of the company’s sales. Its main brands include Tupperware, Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare and Nuvo.

Tupperware prefers to sell its goods through independent dealers instead of retail stores. This helps keep its distribution and marketing costs down. As well, it pays its dealers commissions instead of salaries, so they have a greater incentive to promote Tupperware’s goods. That means the company rarely needs to use costly discounts to spur its sales.

...

Pat McKeough responds to many personal questions on specific stocks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. This past week, an Inner Circle member asked about one of the Canadian dividend stocks that was an income fund before the trust tax of 2011. This company raises revenue in a variety of ways, including the franchising of its company-owned gas stations, which allows it to collect commissions without high overhead. ...

Parkland Fuel Corp., $13.88, symbol PKI on Toronto (Shares outstanding: 65.7 million; Market cap: $911.9 million, www.parkland.ca), operates gas stations, convenience stores and a fuel distribution business, mostly in western Canada and Ontario. The company was called Parkland Income Fund prior to its conversion to a dividend-paying corporation on December 31, 2010. Parkland owns 163 rural gas stations and convenience stores. Its brands include Fas Gas Plus, Race Trac Gas and Short Stop (convenience stores). Many stations sell propane in addition to gasoline and diesel fuel. The company also operates Esso gas stations in western Canada and Ontario under a licensing deal with Imperial Oil Ltd. (symbol IMO on Toronto)....

CANADIAN PACIFIC RAILWAY LTD., $73.54, Toronto symbol CP, has resumed normal operations now that Ottawa has ended an eight-day strike by its locomotive engineers, conductors and yard workers. The strike probably cut CP’s earnings per share by around $0.20 in the second quarter of 2012. The company earned $0.82 a share in the first quarter. At CP’s recent annual meeting, U.S.-based activist investment firm Pershing Square Capital Management, which owns 14.2% of the company, succeeded in replacing seven of CP’s 16 directors with its own nominees....

PENGROWTH ENERGY CORP. $8.41 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 364.5 million; Market cap: $3.1 billion; Price-to sales ratio: 1.9; Dividend yield: 10.0%; TSINetwork Rating: Average; www.pengrowth.com) reported that its daily production rose 2.7% in the three months ended March 31, 2012, to 75,618 barrels of oil equivalent from 73,634 a year ago. Because of depressed natural gas prices, the company is shifting its focus to oil, which accounted for 77% of its production compared with 61% a year earlier.

Even with the higher production, weak gas prices and higher royalties cut Pengrowth’s cash flow by 22.6% in the quarter, to $113.6 million from $146.8 million a year earlier. Cash flow per share fell 31.1%, to $0.31 from $0.45, on more shares outstanding.

However, the company’s high-quality western Canadian properties and its upcoming all-stock purchase of NAL Energy (Toronto symbol NAE) should let it take better advantage of high oil prices.

...

Newell’s shares are up about 13% since the start of 2012. That’s more than double the S&P 500 Index’s 4.9% rise. And we think the company has even bigger gains ahead. That’s because Newell’s latest restructuring has made it much more efficient, and it’s using the cash it’s saving to develop topselling products, buy back shares and raise its dividend. NEWELL RUBBERMAID INC. $18 (New York symbol NWL; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 289.9 million; Market cap: $5.2 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.2%; TSINetwork Rating: Average; www.newellrubbermaid.com) makes plastic storage bins, tools, window blinds, pens and a number of other household items. Its top brands include Rubbermaid, Sharpie, Paper Mate, Parker, Graco, Irwin, Waterman and Levolor....

APACHE CORP. $83 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 390.8 million; Market cap: $32.4 billion; Price-to-sales ratio: 1.9; Dividend yield: 0.8%; TSINetwork Rating: Average; www.apachecorp.com) has been forced to write down the value of its Canadian properties by $390 million due to weak natural gas prices. Without this charge, Apache would have earned $1.2 billion in the three months ended March 31, 2012. That’s up 4.2% from $1.1 billion a year earlier. Earnings per share rose 3.4%, to $3.00 from $2.90, on more shares outstanding. Revenue rose 15.6%, to $4.5 billion from $3.9 billion. Production rose 5.1%, to 769,296 barrels of oil equivalent per day from 731,905 barrels. Half of Apache’s production is oil, which is helping it profit from high oil prices. Moreover, it gets 38% of its gas from outside North America, where gas prices rose an average of 17% in the quarter....