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SNAP-ON INC. $44 (New York symbol SNA; Conservative Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Average) makes and distributes hand tools to automotive mechanics, mainly through a fleet of franchised vans that visit garages. This business supplies about 45% of its revenue. The company also sells power tools and storage chests (45% of revenue) and provides financing to dealers (10% of revenue). Snap-On’s revenue grew at a compound annual rate of 3.4%, from $2.1 billion in 2001 to $2.4 billion in 2005. The slow economy cut profits from $1.84 a share (total $106.7 million) in 2001 to $1.35 a share ($78.7 million) in 2003. A successful restructuring plan raised earnings to $1.40 a share ($81.7 million) in 2004, and to $1.65 a share ($95.7 million) in 2005....

These three well-managed industrial companies have come under pressure in the past few months, as rising costs for fuel, metals, plastics and labor have slowed their earnings growth. But they own some of the best-known brands in their fields, and they are all doing a good job cutting costs. Some like Stanley Works are taking advantage of the recent weakness in the manufacturing sector to make acquisitions. We like the long-term prospects of all three, but see only one as a buy right now....

GREAT-WEST LIFECO INC. $28 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is one of Canada’s largest insurance companies, with $191.3 billion in assets under administration. It sells its insurance products directly and through brokers to both individuals and groups. Power Financial controls about 75% of Great-West. The company also provides wealth management and other financial services. Great-West gets roughly 50% of its profit from Canada, 30% from the U.S. and 20% from Europe. Great-West’s revenues rose from $16.1 billion in 2001 to $23.9 billion in 2005, or 10.4% compounded annually. Much of that growth is due to Great-West’s 2003 purchase of rival Canada Life Financial Corp. for $7.2 billion in cash and stock....

Holding companies tend to trade for less than the value of their various pieces (‘holding company discount’). Still, despite the apparent bargain, we only recommend the holding company over its subsidiaries when we have a high opinion of all the subsidiaries. A good example is our longtime favourite Canadian Pacific Ltd. When it broke itself up into five new companies in 2001, we saw all of the new stocks as buys.

Power Corp., Toronto symbol POW, through subsidiary Power Financial Corp., Toronto symbol PWF, currently controls two of our long-time recommendations: Great-West Lifeco Inc. and IGM Financial Inc.

However, Power Financial also holds several European companies. We feel that weaker economic conditions in Europe expose Power Financial investors to more risk than either Great-West or IGM. Conservative investors are better off with these two instead of the parent. Both offer value, income and an excellent way to diversify the Finance sector of your portfolio.

GREAT-WEST LIFECO INC. $28 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is one of Canada’s largest insurance companies, with $191.3 billion in assets under administration. It sells its insurance products directly and through brokers to both individuals and groups. Power Financial controls about 75% of Great-West.

The company also provides wealth management and other financial services. Great-West gets roughly 50% of its profit from Canada, 30% from the U.S. and 20% from Europe.

Great-West’s revenues rose from $16.1 billion in 2001 to $23.9 billion in 2005, or 10.4% compounded annually. Much of that growth is due to Great-West’s 2003 purchase of rival Canada Life Financial Corp. for $7.2 billion in cash and stock.

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Dividend reinvestment plans, or DRIPs, are plans offered by some companies that let shareholders receive additional shares of stocks or trusts in lieu of cash dividends. The advent of low cost discount brokerage and on-line investing has reduced the commission cost of investment trades to low levels. Thus, the commission free investing that DRIP investing allows is less of an advantage today than it was in the past. Still, DRIPs can be a good way to slowly build wealth over a long period, for a number of reasons. First, they eliminate the nuisance of receiving small cash dividend payments. Second, some DRIP plans let you reinvest your dividends in additional shares at a 5% discount to current prices. Third, many DRIP plans also allow optional commission-free share purchases on a monthly or quarterly basis....

GENERAL MILLS, INC. $52 (New York symbol GIS; Conservative Growth Portfolio, Consumer sector; WSSF Rating: Above average) is one of the largest food processing companies in the United States. The company owns many of the industry’s best known brands, including Cheerios and Wheaties (ready-to-eat cereals), Pillsbury and Betty Crocker (baking products), Green Giant (vegetables), Progresso (soups) and Yoplait (yogurt). The U.S. supplies around 85% of the company’s revenue and profit. Wal-Mart accounts for 20% of its U.S. sales, which adds to its risk. Wal-Mart recently cut the number of different brands it carries as part of a cost cutting plan, but this should have little effect on big suppliers like General Mills. Revenues rose 32.9%, from $7.9 billion in 2002 (fiscal years end May 31) to $10.5 billion in 2003, after the company merged with rival food company C.A. Pillsbury....

SYSCO CORP. $29 (New York symbol SYY; Conservative Growth Portfolio, Consumer sector; WSSF Rating: Average) is building new distribution centers and hiring more salespeople as part of a major expansion plan. It also just agreed to pay an undisclosed sum for privately held Bunn Capitol Co., which distributes fresh, frozen and packaged goods to restaurants and private clubs in Illinois. These outlays, along with higher fuel, electricity, pension and stock option expenses, likely cut Sysco’s earnings in its fiscal year ended June 30, 2006, to $1.36 a share from $1.47 in fiscal 2005. The stock more than tripled in the late 1990s, and peaked at $41 in 2004. But it has stayed in a narrow range for the past two years, and now trades at 21.3 times its forecasted fiscal 2006 earnings....

MOODY’S CORP. $53 (New York symbol MCO; Conservative Growth Portfolio, Finance sector; WSSF Rating: Average) provides credit ratings on bonds and other securities issued by roughly 200,000 commercial and government entities in over 100 countries. The company has about 40% of the global credit rating market. It also sells credit risk management software to financial institutions. Moody’s stock has dropped roughly 25% in the past three months. Investors fear that rising interest rates will cut interest in new debt securities, particularly those related to the home mortgage industry. It now trades at 26.0 times its forecasted 2006 earnings of $2.08 a share. The $0.28 dividend yields 0.5%. The company is currently one of five companies designated by the SEC to provide credit ratings on new securities. Issuers can speed up the registration process if they have a credit rating above a certain level....

Demand for financial and business information is ballooning. A great deal of this information is available for free on the Internet, but users have doubts about its accuracy. So they are willing to pay for data they can trust from reputable sources, such as these four top providers of specialized business information. Investors see a lot of value and long-term growth potential in these companies. That helps explain why they often trade at above-average p/e ratios (the S&P 500’s p/e is currently 17.4).We see only two of these stocks as buys right now. DOW JONES & CO. $34 (New York symbol DJ; Conservative Growth Portfolio, Consumer sector; WSSF Rating: Above average) publishes The Wall Street Journal and Barron’s magazine. It also owns several smaller publications, and provides newswire and specialized information services....

FAIR ISAAC CORP. $36 (New York symbol FIC; Aggressive Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Average) aims to spur its profit growth with a new restructuring plan. It will cut roughly 8% of its workforce, which will cost it $5.7 million for severance and other items. But the plan should save Fair Isaac $24 million (pre-tax) a year. To put that in context, the company earned $0.40 a share (total $27.0 million) in its second fiscal quarter ended March 31, 2006. The latest per-share earnings figure included a $0.02 writedown, and $0.10 in employee stock option expenses....