pension plan

BROADRIDGE FINANCIAL SOLUTIONS INC. $20 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 126.7 million; Market cap: $2.5 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.0%; WSSF Rating: Average) has purchased privately held NewRiver Inc., which specializes in electronic forms that make it easier for financial companies to submit data to the Securities and Exchange Commission and other regulators. The $77.0 million price is equal to 34% of the $225.1 million, or $1.62 a share, that Broadridge earned in the fiscal year ended June 30, 2010. NewRiver already supplies electronic forms to Broadridge. This familiarity cuts the risk of an unpleasant surprise. Moreover, the purchase gives Broadridge access to NewRiver’s high-quality clientele, including mutual-fund companies, brokerage firms and pension-plan administrators....

MAPLE LEAF FOODS INC. $9.61 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 136.8 million; Market cap: $1.3 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.7%; SI Rating: Average) rose 5% in August after the Ontario Teachers’ Pension Plan sold some of its Maple Leaf shares to private equity fund West Face Capital Inc. at $8.25 a share. West Face now owns about 11.0% of Maple Leaf. The pension plan will hold on to its remaining 25.2% stake for now. West Face has a history of unlocking value in companies, so its involvement should help spur Maple Leaf’s share price. Maple Leaf Foods is a buy.

PENGROWTH ENERGY TRUST, $9.76, Toronto symbol PGF.UN, has agreed to buy the 82% of Monterey Exploration Ltd. (Toronto symbol MXL) that it doesn’t already own. The deal should close in September 2010. Monterey produces oil and natural gas at properties in Alberta and British Columbia. Pengrowth is particularly interested in Monterey’s unconventional gas holdings in northeastern B.C. Monterey lacks the financial resources to develop these assets. That’s why it accepted Pengrowth’s offer. The trust will pay $366 million in units to take full control of Monterey. That includes $30 million of Monterey’s debt, which Pengrowth will assume....

BCE faces strong competition from cable companies and new wireless providers. However, a major cost-cutting drive has freed up cash for new investments in its networks. These savings also give BCE room for dividend increases, share buybacks and other moves that can pay off for investors. BCE INC. $32 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 763.0 million; Market cap: $24.4 billion; Price-to-sales ratio: 1.4; Dividend yield: 5.4%; SI Rating: Above Average) is Canada’s largest provider of telephone, Internet and wireless services. The company’s main subsidiary, Bell Canada, has 6.8 million residential and business customers in Ontario and Quebec. BCE sells wireless services to 6.9 million subscribers across Canada. As well, it has 2.1 million high-speed Internet customers and 2.0 million satellite-TV subscribers....

MAPLE LEAF FOODS INC. $9.27 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 136.8 million; Market cap: $1.3 billion; Price-to-sales ratio: 0.2; Dividend yield: 1.7%; SI Rating: Average) slumped 4% on June 8, on news that the Ontario Teachers’ Pension Plan plans to sell its 35.3% stake in the company. Investors worry that some hidden problem has prompted the pension plan to sell Maple Leaf. The McCain family, which owns 31.6% of Maple Leaf, seems uninterested in buying the Teachers’ stake. However, major investors sell major investments (or choose not to buy out partners who want to sell) for a variety of reasons. The Teachers pension plan has been shifting away from common stocks and into real estate, foreign companies, private companies and other investments for a decade. Canadian stocks formerly made up a majority of the plan’s holdings. Now they represent 9%. Maple Leaf is the plan’s biggest single holding of a listed company. It bought more Maple Leaf as recently as late 2008....

We think investors will profit most — and with the least risk — by buying shares of well-established, dividend-paying stocks with strong business prospects. These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace. Here are 3 ways dividend paying stocks can help improve your portfolio’s long-term returns:...

MDS INC., $8.30, Toronto symbol MDS, hopes to complete the sale of its MDS Analytical Technologies business by the end of January. This division makes mass spectrometers that detect and measure substances in blood and other patient samples. The sale will generate $650 million for MDS (all amounts except share price in U.S. dollars). It will use $400 million to $450 million of these funds to buy back shares. MDS is still looking to sell its pharma-services division, which conducts contract-drug research for pharmaceutical companies. When it does sell, MDS will probably use the proceeds for more share buybacks....

Canada’s telephone companies continue to face rising competition. Along with wireless and cable companies, Internet-based phone services, such as Skype, have also gained in popularity. Now, three new wireless providers (Globalive’s WIND Mobile, DAVE Wireless, and Public Mobile) are set to enter the Canadian market. This new competition will put pressure on BCE Inc. (symbol BCE on Toronto), Canada’s largest telephone service provider. In light of this and other developments surrounding this conservative investing stock, we’ve updated our buy/sell/hold advice in the latest Canadian Wealth Advisor, our newsletter for safety-conscious conservative investing....

CANADIAN PACIFIC RAILWAY LTD. $56.14 (Toronto symbol CP; Shares outstanding: 168.3 million; Market cap: $9.4 billion; SI Rating: Average; Dividend yield: 1.8%) is contributing $500 million to its employee defined-benefit pension plan. The company hopes the voluntary payment to the plan will make its future pension obligations easier to manage. As of September 30, 2009, CP held cash of $615.9 million, or $3.66 a share, so it can comfortably afford this payment. The move will have little impact on CP’s earnings. The company now estimates that its 2010 pension obligation will be between $150 million and $200 million. That’s down from its earlier range of $250 million to $300 million....

BCE INC., $27.51, Toronto symbol BCE, has increased its quarterly dividend by 7.4%, to $0.435 a share from $0.405. The new annual rate of $1.74 yields 6.3%. This is the company’s third dividend hike since a private consortium led by the Ontario Teachers’ Pension Plan dropped its plan to buy BCE a year ago. BCE has also earmarked $500 million for share buybacks. That’s equal to 2.4% of its $20.9-billion market cap. From December 2008 to May 2009, the company spent $986 million to buy back 5% of its shares. Share buybacks increase the value of the remaining shares....