price to sales ratio

CANADIAN PACIFIC RAILWAY LTD. $175 (Toronto symbol CP; Conserva- tive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.9 million; Market cap: $26.8 billion; Price-to-sales ratio: 3.9; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.cpr.ca) has revised its takeover offer for U.S.-based railway Norfolk Southern Corp. (New York symbol NSC). The combined firm would be North America’s largest railway, with more than 56,000 kilometres of track. Buying Norfolk would also give CP greater access to ports on the U.S. Gulf Coast and Atlantic Ocean. Under the new deal, Norfolk shareholders would receive more stock and less cash: $32.86 U.S. a share in cash plus 0.451 of a CP share. That would give them 47% of the combined company, compared to 41% under the original offer....

In addition to Loblaw (see first article), we think these three retail stocks have great long-term prospects. They all lead their markets and have strong brands and reputations that will help them grow. However, only aggressive investors should consider Metro and RioCan. CANADIAN TIRE CORP. $122 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 75.0 million; Market cap: $9.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.canadiantire.ca) has 495 Canadian Tire stores, which sell automotive, household and sporting goods. Franchisees run most of these outlets. Other operations include 297 gas stations and 91 PartSource auto parts stores....

EMERA INC. $42 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 145.3 million; Market cap: $6.1 billion; Price-to-sales ratio: 2.1; Dividend yield: 4.5%; TSINetwork Rating: Average; www.emera.com) recently agreed to acquire Teco Energy (New York symbol TE), which supplies electricity and natural gas to 1.05 million customers in Tampa Bay and the surrounding region. A separate subsidiary distributes gas to 510,000 clients in New Mexico. The company will pay $6.5 billion U.S. in cash for Teco. If you include Teco’s debt, the deal is worth $10.4 billion U.S. Teco shareholders have already approved the sale. Regulators still need to agree, but Emera should complete the purchase in mid-2016. By 2019, the company expects the new operations to increase its earnings per share by 10%....

ENBRIDGE INC. $43 (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 863.7 million; Market cap: $37.1 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.9%; TSINetwork Rating: Above Average; www.enbridge.com) will make a final decision on its proposed Northern Gateway pipeline in the second half of 2016. This $7.9-billion project would pump crude from Alberta to the B.C. coast. From there, tankers would ship the oil to Asian markets. Regulators have approved the line, but the new federal Liberal government plans to ban tanker traffic off B.C.’s northern coast. That hurts the project’s viability. Meanwhile, Enbridge expects its cash flow per share to improve from $3.65 in 2015 to $4.15 in 2016. That prompted it to raise its dividend by 14.0%. The new rate of $2.12 a share yields 4.9%....

POTASH CORP. OF SASKATCHEWAN $24 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 835.1 million; Market cap: $20.0 billion; Price-to-sales ratio: 3.2; Dividend yield: 8.6%; TSINetwork Rating: Average; www.potashcorp.com) continues to see weak demand for potash and other fertilizers in North America, Latin America and India. That’s because record harvests have cut prices for wheat, corn, soybeans and other crops. As a result, farmers have less income to spend on fertilizers. In addition, Russia’s Uralkali Group, the world’s largest potash producer, has increased production in an attempt to boost its market share. Prices could fall even further, as German potash producer K+S AG still plans to open its Legacy mine in southern Saskatchewan in 2016....

Lower prices for oil and other commodities are weighing on Encana and Finning (see box). However, both firms are aggressively cutting costs, which puts them in a better position to grow when prices recover. ENCANA CORP. $9.14 (Toronto symbol ECA; Con- servative Growth Portfolio, Resources sector; Shares outstanding: 845.7 million; Market cap: $7.7 billion; Price-to-sales ratio: 1.4; Dividend yield: 4.2%; TSINetwork Rating: Average; www.encana.com) raised $2.7 billion in 2015 by selling less important properties (all amounts except share price and market cap in U.S. dollars). These sales are part of the company’s plan to focus on four key projects: Montney (B.C.), Duvernay (Alberta) and Eagle Ford and Permian (both in Texas). These fields produce large amounts of oil and natural gas liquids, such as propane and butane, which cuts Encana’s reliance on natural gas. They’re also efficient, which helps the company cope with low oil and gas prices....

FINNING INTERNATIONAL INC. $18 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 169.3 million; Market cap: $3.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.finning.com) sells and services Caterpillar-brand heavy equipment. Its main customers are in the oil, mining, forest-products and construction industries. Weaker commodity prices continue to hurt equipment demand. In response, Finning has laid off 13% of its workforce and closed 11 of its locations in Western Canada. The company is now looking at other ways to lower its costs, such as shipping parts directly to customers instead of through dealerships. Meanwhile, Finning’s earnings fell 42.4% in the three months ended September 30, 2015, to $0.19 a share from $0.33 a year earlier. Without one-time items, the company earned $0.34 a share in the latest quarter....

SHAWCOR LTD. $27 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares out- standing: 64.5 million; Market cap: $1.7 billion; Price-to-sales ratio: 1.0; Dividend yield: 2.2%; TSINetwork Rating: Average; www.shawcor.com) has acquired certain businesses from Flint Field Services. These operations inspect and make plastic liners for pipelines. The company paid $35.5 million for the Flint businesses, which is equal to 93% of the $38.1 million, or $0.59 a share, it earned in the third quarter of 2015. The purchase will add $46 million to its annual revenue of $1.9 billion. ShawCor is a buy....

TORONTO-DOMINION BANK $54 (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.9 billion; Market cap: $102.6 billion; Price-to-sales ratio: 3.3; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.td.com) earned $8.75 billion, or $4.61 a share, in its 2015 fiscal year, which ended October 31, 2015. That’s up 7.7% from $8.1 billion, or $4.27 a share, in 2014. Revenue rose 4.9%, to $31.4 billion from $30.0 billion. Low interest rates continue to spur loan demand at TD’s retail banking operations in Canada and the U.S. Higher trading volumes and underwriting fees also contributed to the gains. Due to the higher loan volumes, the bank’s loan-loss provisions rose 8.1%, to $1.7 billion from $1.6 billion....

CANADIAN NATIONAL RAILWAY CO. $74 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 792.7 million; Market cap: $58.7 billion; Price-to-sales ratio: 4.6; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. Its 32,200- kilometre network stretches across the country and through the U.S. Midwest to the Gulf of Mexico. CN saw a big jump in the number of goods shipped after the 2008/09 recession. That’s the main reason why its revenue soared 46.2%, from $8.3 billion in 2010 to $12.1 billion in 2014. That figure probably rose to $13.4 billion in 2015. Earnings gained 56.9%, from $2.0 billion in 2010 to $3.1 billion in 2014. CN is an aggressive buyer of its own shares. As a result, its earnings per share soared 79.0%, from $2.10 to $3.76....