price to sales ratio

TENNANT CO. $55 (New York symbol TNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 18.3 million; Market cap: $1.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.5%; TSINetwork Rating: Average; www. tennantco.com) makes industrial floor-cleaning equipment, including scrubbers, sweepers and polishers. It also manufactures cleaning gear for garages, stadiums, parking lots and city streets.

The company continues to benefit from strong demand for products featuring its ec-H20 technology, which uses electricity to make tap water act like a detergent.

Tennant recently improved the effectiveness of this process with a new system it calls NanoClean, which creates millions of microscopic bubbles in the water. The company plans to add NanoClean technology to all of its commercial scrubbers.

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CONAGRA FOODS INC. $40 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 429.2 million; Market cap: $17.2 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.conagrafoods.com) paid $4.75 billion for Ralcorp Holdings, the largest private-label food maker in the U.S., in January 2013. However, strong competition and higher ingredient costs have hurt Ralcorp’s earnings. In response, ConAgra aims to sell Ralcorp by the end of 2015.

Excluding Ralcorp’s contribution and unusual items, ConAgra’s earnings rose 15.4% in its fiscal 2016 first quarter, which ended August 30, 2015, to $0.45 a share from $0.39 a year earlier. Sales gained 1.1%, to $2.79 billion from $2.76 billion.

Consumer foods, such as Chef Boyardee canned pasta and Hunt’s tomato sauce, now supply 61% of ConAgra’s revenue. These products’sales fell 0.3%, as unfavourable currency rates offset higher selling prices.

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PFIZER INC. $33 (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 6.2 billion; Market cap: $204.6 billion; Price-to-sales ratio: 4.1; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.pfizer.com) started up in 1942 and is now one of the world’s leading makers of prescription drugs. Top-selling brands include Lyrica (epilepsy), Celebrex (arthritis pain), Prevnar (pneumonia) and Enbrel (rheumatoid arthritis).

The company is also the world’s fifth-largest maker of overthe- counter treatments, including| Advil (pain relief), Centrum (vitamins) and Robitussin (cough syrup).

Pfizer’s revenue fell 19.5%, from $61.6 billion in 2010 to $49.6 billion in 2014. That’s mainly because it sold its nutrition division, which makes formula and other products for children, to Switzerland-based Nestle S.A. for $11.9 billion in 2012. In 2013, Pfizer set up its animalhealth business as a separate firm called Zoetis Inc. (New York symbol ZTS).

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3M has made a number of acquisitions in the past few years. Expanding this way is riskier than internal growth, as the buyer of something rarely knows as much about it as the seller. Hidden problems can lead to big writedowns, as Microsoft found out with its recent purchase of Nokia’s mobile phone operations (see page 88). However, 3M’s recent purchases of companies that make medical supplies and safety equipment help offset the cyclical nature of its main businesses. Moreover, 3M is a leader in most of its markets. That means it can charge higher prices, particularly for new products that face little competition. 3M COMPANY $143 (New York symbol MMM; Conservative Growth and Income Portfolios, Manufacturing & Industry sector; Shares outstanding: 624.8 million; Market cap: $89.3 billion; Price-to-sales ratio: 2.8; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.3m.com) started up in 1902, when it was called the Minnesota Mining & Manufacturing Company....

Spinoffs are a great way for companies to unlock hidden value, as the former parent and newly independent firm tend to outperform groups of comparable stocks for several years. But in the cases of Agilent and NCR, we prefer the parent companies to their former subsidiaries for new buying. AGILENT TECHNOLOGIES INC. $36 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 332.0 million; Market cap: $12.0 billion; Price-to-sales ratio: 1.6; Dividend yield: 1.1%; TSINetwork Rating: Average; www.agilent.com) split into two publicly traded firms on November 1, 2014. One company kept the Agilent name and stock symbol and focuses on testing equipment for medical research labs. The other firm, called Keysight Technologies (see right), makes testing systems for electronics....

NORDSTROM INC. $74 (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 188.2 million; Market cap: $13.9 billion; Price-to-sales ratio: 1.0; Dividend yield: 2.0%; TSINetwork Rating: Average; www.nordstrom.com) owns and operates 304 stores in the U.S. and Canada that mainly sell upscale clothing, accessories and footwear. In its fiscal 2016 second quarter, which ended August 1, 2015, sales rose 9.1%, to $3.7 billion from $3.4 billion a year earlier. Same-store sales (which exclude contributions from new outlets) rose 4.9%. Earnings gained 14.7%, to $1.09 a share from $0.95. Toronto-Dominion Bank (Toronto symbol TD) recently agreed to buy the company’s credit card loans for $1.8 billion. Nordstrom will probably use these funds to pay down its total debt of $3.1 billion....

The oil-price plunge continues to weigh on these two producers, but their recent asset sales will help them weather the downturn. We still prefer Chevron, as cheaper oil enhances its refineries’profits. CHEVRON CORP. $73 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.9 billion; Market cap: $138.7 billion; Price-to-sales ratio: 0.9; Dividend yield: 5.9%; TSINetwork Rating: Above Average; www.chevron.com) has sold $11 billion worth of less important businesses since 2014. It should reach its goal of selling $15 billion of assets by 2017. Even with the sales, the company’s oil output will likely average 3.1 million barrels a day in 2017, up 19.2% from 2.6 million in the second quarter of 2015....

NEWMONT MINING CORP. $16 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 529.1 million; Market cap: $8.5 billion; Price-to-sales ratio: 1.1; Dividend yield: 0.6%; TSINetwork Rating: Average; www.newmont.com) has purchased the Cripple Creek & Victor gold mine in Colorado for $820 million. Cripple Creek will produce 350,000 to 400,000 ounces of gold a year once it completes its current expansion in 2016. To put that in context, Newmont expects to produce 4.6 million to 4.9 million ounces in 2015. The mine should last until at least 2026. The company feels it can cut Cripple Creek’s operating costs by 10%. However, like most gold firms, Newmont’s shares will need a gold-price recovery to move significantly higher. Newmont is still a hold.

The low Japanese yen makes products from Canon and Sony cheaper outside of Japan. But their sales and earnings will remain under pressure as they adjust to changing consumer tastes. CANON INC. ADRs $30 (New York symbol CAJ; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.1 billion; Market cap: $33.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.canon.com) gets over half of its revenue by making office equipment, mainly printers and copiers. Other products include digital cameras and parts for TVs and medical gear. Businesses continue to buy more of Canon’s copiers and laser printers, but consumers are taking more pictures with smartphones. That’s hurting the company’s camera sales....

MONDELEZ INTERNATIONAL INC. $42 (Nasdaq symbol MDLZ; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.6 billion; Market cap: $67.2 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.6%; TSINetwork Rating: Above Average; www.mondelezinternational.com) makes cookies and biscuits (Oreo, Chips Ahoy, Ritz), chocolate bars (Cadbury, Toblerone), gum and candy (Trident, Chiclets) and Halls cough drops. The stock gained 10% recently on news that activist investment firm Pershing Square Capital now owns 7.5% of the company. Pershing will likely pressure Mondelez to improve its profitability, instead of trying to break it up or merge it with another food maker. However, the stock is expensive at 23.6 times the company’s projected 2015 earnings of $1.78 a share. Mondelez is a hold.