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AGILENT TECHNOLOGIES INC. $44 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 347.9 million; Market cap: $15.3 billion; Price-to-sales ratio: 2.3; Dividend yield: 1.1%; TSINetwork Rating: Average; www. agilent.com) makes testing systems that help electronics companies improve their products. It also manufactures testing equipment for medical research labs.

Agilent recently raised its quarterly dividend by 20.0%, to $0.12 a share from $0.10. The new annual rate of $0.48 yields 1.1%. As well, the company will buy back up to $500 million of its shares in the fiscal year ending October 31, 2013. That’s equal to 3% of its market cap. These repurchases will reduce the dilution caused by shares it will issue under its employee stock option plan.

Agilent is a buy.
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CANADIAN PACIFIC RAILWAY LTD. $97.70, Toronto symbol CP, rose 5% this week after the company announced a major restructuring plan aimed at improving its efficiency. CP’s strategy includes cutting 25% of its workforce, making its trains longer and faster, and closing some terminals. CP didn’t say how much these moves would cost. However, the restructuring should help cut its operating ratio from 74.1% to around 65% in 2016. (Operating ratio is calculated by dividing a company’s regular operating costs by its revenue. The lower the ratio, the better.) In addition, CP has suspended its plan to build new rail lines that would have served coal mines in the Powder River Basin in Montana and Wyoming. The company received an exclusive option to build these lines as part of a 2007 acquisition. However, power plants are switching to natural gas, which has hurt demand for coal. As a result, CP will write down this option and related assets by $180 million. That’s equal to 80% of the $224 million, or $1.30 a share, that it earned in the third quarter of 2012....

LOBLAW COMPANIES $33.47 (Toronto symbol L; Shares outstanding: 281.5 million; Market cap: $9.4 billion; TSINetwork Rating: Above Average; Dividend yield: 2.6%; www.loblaw.ca) has signed a new long-term deal with Towers Watson, a private firm that helps Canadian companies manage their employees’ health benefits. Under the agreement, Loblaw’s in-store pharmacies will offer special discounts to Towers Watson’s clients, which together employ over 30,000 people. These discounts should draw more shoppers to Loblaw’s stores and more than offset the lost revenue. Roughly half of Loblaw’s 1,000 supermarkets now have in-store pharmacies. Loblaw is a buy....

BOMBARDIER INC., Toronto symbols BBD.A $3.51 and BBD.B $3.43, is having trouble getting enough parts from suppliers to build its new CSeries passenger jet. As a result, the company has delayed the new aircraft’s first test flight from the end of this year to June 2013. It still expects to deliver the first CSeries plane by the end of 2013. As well, slowing demand for its passenger railcars has prompted the company to cut 3% of this division’s workforce, including closing a plant in Germany. Severance and other costs will probably total $150 million (all amounts except share prices in U.S. dollars) in the fourth quarter of 2012. The company did not say how much these moves would save it. Meanwhile, Bombardier earned $209 million, or $0.12 a share, on sales of $4.3 billion in the three months ended September 30, 2012. The latest earnings beat the consensus estimate of $0.11 a share....

Pat McKeough responds to many personal questions about 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. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for the Inner Circle. This week, one question from an Inner Circle member concerned a fund that holds gold stocks. The fund’s high distributions give it a substantial dividend yield. Pat examines whether it can sustain its yield and also looks at its policy of using call options to boost returns....

Faircourt Gold Income Corp., $8.33, symbol FGX on Toronto (Shares outstanding: 4.5 million; Market cap: $37.5 million; www.faircourtassetmgt.com), mainly invests in large- and mid-sized gold producers that are part of the S&P/TSX Global Gold Index. The company holds mostly high-quality stocks, including Barrick Gold, Detour Gold, Franco-Nevada Corp., Freeport-McMoran Copper & Gold, Goldcorp, Kinross Gold, Newmont Mining, Yamana Gold and New Gold. Faircourt pays a high 7.2% dividend yield. To meet its high distributions, the company may use capital gains on its investments to increase its cash flow—a strategy that works when markets are rising but not when they are falling....

This is the time of year when many Canadians prepare to spend part or all of the coming winter in warmer weather down south. For some, this could raise the question of time-shares as an option for cheaper vacations. If you visit a resort this winter, you may receive an invitation to a party or other event whose object is to try to sell you and other guests time-shares. It could be worthwhile to attend, depending on what else you have to do. But our view is that investing your money in a time-share rarely provides you with any real advantage....

These small industrial companies face a number of challenges, including rising costs and falling sales in Europe and other overseas markets. However, all four are leaders in their niche industries. That should continue to spur their long-term growth. They also have long histories of raising their dividends. Still, we see only two as buys right now. GENUINE PARTS CO. $64 (New York symbol GPC; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 155.1 million; Market cap: $9.9 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.1%; TSINetwork Rating: Average; www.genpt.com) gets 50% of its sales and 53% of its earnings by selling auto parts. The company operates 1,300 of its own outlets under the NAPA banner, and its distribution business serves 4,750 independent stores across North America....

GENUINE PARTS CO. $64 (New York symbol GPC; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 155.1 million; Market cap: $9.9 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.1%; TSINetwork Rating: Average; www.genpt.com) gets 50% of its sales and 53% of its earnings by selling auto parts. The company operates 1,300 of its own outlets under the NAPA banner, and its distribution business serves 4,750 independent stores across North America.

Genuine also distributes industrial parts (34% of sales, 33% of earnings), office furniture (12%, 10%) and electrical equipment (4%, 4%).

In January 2012, the company paid $165.6 million for 30% of Exego Group, a privately held firm that sells auto parts through 430 stores in Australia and New Zealand. As part of the deal, Genuine acquired an option to buy the remaining 70%.

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You might say we specialize in “plain vanilla” stocks, bonds and mutual funds—the ordinary kind, in other words, without any special features. We almost always stay out of new issues. We’ve always been highly selective in our income trust and royalty trust recommendations. We advise against trading in options and futures. The only investment innovation we’ve added to our list is the exchange-traded fund or ETF. But ETFs are unlike other investment innovations; they aim to simplify your investing, rather than complicate it. Of course, we stay out of ETFs that use leverage, or that aim to pursue some sort of market theory, or that invest in a narrow market segment or theme. We’ve found that our exclusionary rules leave us plenty of scope for sound investing, with lots of high-value opportunities and few surprises. In investment innovations, surprises tend to be unpleasant. That’s because innovations aim at selling more “product” (as brokers say) to investors, rather than raising investor returns. In fact, innovations may give you greater stability, steady income or tax deferral, but you generally pay for these advantages out of total investment return....