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ARBOR MEMORIAL SERVICES INC. $27 (Toronto symbol ABO.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 10.7 million; Market cap: $288.9 million; SI Rating: Average) owns 41 cemeteries, 27 crematoria, four reception centres located on cemetery premises and 90 funeral homes in eight provinces. In its second fiscal quarter ended April 30, 2008, Arbor earned $0.60 a share, down 9.1% from $0.66 a year earlier. Revenue fell 1.5%, to $58.4 million from $59.3 million. Arbor is a buy for aggressive investors. RIOCAN REAL ESTATE INVESTMENT TRUST $21 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 212.0 million; Market cap: $4.5 billion; SI Rating: Average) has formed a second joint venture with U.S.-based real estate developer Kimco Realty Corp. This new 50-50 partnership has agreed to buy 10 retail shopping centres in central and eastern Canada. RioCan will manage these properties....

ANHEUSER-BUSCH COMPANIES INC. $57.46, New York symbol BUD, rose 10% this week on speculation that Belgian-based InBev NV may launch a $65-a-share takeover offer. InBev is the world’s largest brewer, but has only a small presence in the United States. Buying Anheuser-Busch would instantly give InBev over half of the U.S. beer market. Anheuser-Busch has no controlling stockholder, so a hostile takeover could succeed. Even if InBev decides not to bid, we still like Anheuser-Busch’s long-term prospects. The stock is still a buy....

THE PROCTER & GAMBLE CO. $67 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 3.1 billion; Market cap: $207.7 billion; WSSF Rating: Above average) is one of the world’s largest makers of household and personal care products. Over 20 of its 300 brands each generate annual sales of over $1 billion, including Crest (toothpaste), Tide (detergent), Head & Shoulders (shampoo) and Pampers (diapers). Wal-Mart accounts for 15% of Procter’s sales. The company now aims to sell some of its slowergrowing brands, and focus on its more promising health and beauty operations. For example, Procter will set up its coffee business as a separate company called The Folgers Coffee Company. This division supplies 2% of Procter’s sales. Procter will probably opt for a split-off transaction, which gives stockholders the option of exchanging their Procter shares for Folgers shares. Unlike a typical spin-off, only those Procter stockholders who wish to participate will receive Folgers shares. A split-off will also let investors defer capital gains taxes....

BECKMAN COULTER INC. $64 (New York symbol BEC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 62.7 million; market cap: $4.0 billion; WSSF Rating: Average) makes lab equipment that doctors and medical researchers use to detect substances in bodily fluids. The company sells most of its products to big hospitals and research laboratories. It has now installed more than 200,000 of its systems in over 130 countries. Beckman’s products aim to simplify and speed up complex tests. In fact, some of these systems can process over 1,400 chemical tests an hour. More timely and accurate information leads to faster treatment and can reduce a patient’s hospital stay....

We have generally stayed out of drug stocks in this decade, and that’s a good thing for our subscribers. Drug stock enthusiasts focus on the rising demand they foresee from aging baby boomers, for newly developed drugs which are more effective than older ones. They overlook the drawbacks to investment in the drug industry, which concern us more. These drawbacks include high research and development costs, with no sure payoff; limited patent life; and competition from still newer drugs. Starting from high stock-price levels and laboring under these disadvantages, most drug stocks have been weak-to-miserable performers for years. Drug makers will one day offer enough value to tempt us back into investing in them. For now, we will stick with long-time favorite Beckman Coulter. It grows along with rising health concerns. But every new equipment sale it makes gives it a new customer for lab supplies....

JP MORGAN CHASE & CO. $45.97, New York symbol JPM, got a great bargain in its agreed-upon takeover of troubled brokerage firm Bear Stearns (New York symbol BSC), assuming the deal goes through. Morgan is only paying $236 million for the company. That’s entirely in stock, and it’s less than 2% of Morgan’s 2007 earnings of $15.4 billion or $4.38 a share. Morgan will have to spend $6 billion or so to integrate Bear Stearns and deal with the inevitable class-action lawsuits from Bear Stearns stockholders. But it thinks the purchase will eventually add $1 billion to its annual earnings. To counteract Bear Stearns’ severe liquidity problems, the Federal Reserve will finance the purchase of up to $30 billion of Bear Stearns’ less liquid assets, backed solely by those assets. That greatly cuts Morgan’s risk. In light of Bear Stearns’ dire situation and the Fed’s support, anti-trust regulators will probably give the deal quick approval. The takeover also needs the approval of Bear Stearns’ stockholders. Bear Stearns is trading for more than twice the offer’s current value, which means investors expect a higher bid. However, the Federal Reserve is unlikely to offer the $30 billion financing guarantee to other potential buyers....

H&R BLOCK INC. $19 (New York symbol HRB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 325.0 million; Market cap: $6.2 billion; WSSF Rating: Above average) prepares income tax returns through offices in the United States, Canada, Australia and the UK. Other services include investment planning and insurance. In December 2007, the company canceled a deal to sell its Option One mortgage business due to the problems in the mortgage securities market and slumping home prices. Instead, H&R Block will now wind down its mortgage operations. While competition from do-it-yourself software programs have hurt demand for H&R Block’s tax services in the past few years, increasingly complex tax rules should help it attract new clients. The company’s own TaxCut software has also helped it take advantage of growing interest in electronic filing. Washington’s new stimulus plan should also spur demand for tax advice. Most citizens will need to file a 2007 tax return to qualify for a rebate....

Top-quality bank stocks are a sound addition to the Finance sector of most portfolios. However, you should also diversify your holdings with high-quality non-bank stocks such as these two. H&R BLOCK INC. $19 (New York symbol HRB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 325.0 million; Market cap: $6.2 billion; WSSF Rating: Above average) prepares income tax returns through offices in the United States, Canada, Australia and the UK. Other services include investment planning and insurance. In December 2007, the company canceled a deal to sell its Option One mortgage business due to the problems in the mortgage securities market and slumping home prices. Instead, H&R Block will now wind down its mortgage operations....

TRANSCANADA CORP. $39 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 540 million; Market cap: $21.1 billion; SI Rating: Above average) operates a 59,000-km network of natural gas pipelines in Canada and the United States. This business supplies 70% of its profit. The remaining 30% comes from its electrical power operations. TransCanada aims to cut its reliance on its regulated pipeline business with new growth projects. These include the Keystone pipeline, which will transport crude oil from Alberta’s oil sands to the U.S. Midwest. Initial deliveries should begin in late 2009. The company recently agreed to sell half of Keystone to U.S.-based oil giant Conoco- Phillips for an undisclosed sum. TransCanada had earlier granted ConocoPhillips this option as part of a long-term shipping agreement. That will cut the risk of this project, as well as its projected cost of $3 billion....

Falling interest rates have rekindled investor interest in high-yielding utility stocks, such as these five. All of them have a long history of increasing dividends. Unlike interest payments on bonds, dividends qualify for the dividend tax credit. As well, stocks offer you open-ended returns, so they can give you protection against inflation. Bonds can’t provide this protection, because they are fixed-return investments. We see all five of these utilities as buys for long-term gains and income. TRANSCANADA CORP. $39 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 540 million; Market cap: $21.1 billion; SI Rating: Above average) operates a 59,000-km network of natural gas pipelines in Canada and the United States. This business supplies 70% of its profit. The remaining 30% comes from its electrical power operations. TransCanada aims to cut its reliance on its regulated pipeline business with new growth projects. These include the Keystone pipeline, which will transport crude oil from Alberta’s oil sands to the U.S. Midwest. Initial deliveries should begin in late 2009....