price to sales ratio
CISCO SYSTEMS INC. $29 (Nasdaq symbol CSCO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.1 billion; Market cap: $147.9 billion; Price-to-sales ratio: 3.0; Dividend yield 2.9%; TSINetwork Rating: Average; www.cisco.com) has seen falling sales of routers and other computer-networking equipment in China in the past few years.
That’s largely because of fears that U.S. intelligence agencies are secretly using the company’s gear to spy on foreign firms and governments. In the quarter ended April 25, 2015, Cisco’s Chinese sales fell 20% from a year earlier.
The company now aims to reverse the decline by investing in new partnerships with Chinese universities and other institutions. This should help Cisco develop new equipment to compete with products from domestic firms like Huawei Technologies.
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That’s largely because of fears that U.S. intelligence agencies are secretly using the company’s gear to spy on foreign firms and governments. In the quarter ended April 25, 2015, Cisco’s Chinese sales fell 20% from a year earlier.
The company now aims to reverse the decline by investing in new partnerships with Chinese universities and other institutions. This should help Cisco develop new equipment to compete with products from domestic firms like Huawei Technologies.
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MCDONALD’S CORP. $97 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 958.5 million; Market cap: $93.0 billion; Price-to-sales ratio: 3.5; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.mcdonalds .com) earned $811.5 million in the three months ended March 31, 2015, down 32.6% from $1.2 billion a year earlier. Per-share profits fell 30.6%, to $0.84 from $1.21, on fewer shares outstanding.
The company is closing less-profitable restaurants, simplifying its menus and speeding up its drive-through lanes as part of a new restructuring plan. If you exclude unusual items and the negative impact of currency exchange rates, McDonald’s earned $1.10 a share in the latest quarter.
Sales fell 11.1%, to $6.0 billion from $6.7 billion. A drop in customer traffic cut same-store sales by 2.3%.
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The company is closing less-profitable restaurants, simplifying its menus and speeding up its drive-through lanes as part of a new restructuring plan. If you exclude unusual items and the negative impact of currency exchange rates, McDonald’s earned $1.10 a share in the latest quarter.
Sales fell 11.1%, to $6.0 billion from $6.7 billion. A drop in customer traffic cut same-store sales by 2.3%.
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BROADRIDGE FINANCIAL SOLUTIONS INC. $52 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 119.9 million; Market cap: $6.2 billion; Price-to-sales ratio: 2.4; Dividend yield: 2.1%; TSINetwork Rating: Average; www.broadridge.com) serves the investment industry in three main areas: investor communications, securities processing and transaction clearing. It processes 90% of all proxy votes in the U.S. and Canada. If you exclude one-time items, Broadridge earned $58.8 million, or $0.47 a share, in its fiscal 2015 third quarter, which ended March 31, 2015. That’s up 6.7% from $55.1 million, or $0.44 a share, a year earlier.
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DUN & BRADSTREET CORP. $128 (New York symbol DNB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 36.0 million; Market cap: $4.6 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.4%; TSINetwork Rating: Average; www.dnb.com) provides credit reports on over 230 million companies. Its clients use this information to make lending and buying decisions.
Dun & Bradstreet gets 64% of its revenue from credit reports. The remaining 36% comes from other information products, like software businesses use to manage websites and customer data.
In 2010, the company sold subsidiary Dun & Bradstreet Credibility Corp. (DBCC) to private investors for $10.0 million. DBCC sells credit reports and related services to U.S. small businesses; it pays licensing fees to use the Dun & Bradstreet brand.
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Dun & Bradstreet gets 64% of its revenue from credit reports. The remaining 36% comes from other information products, like software businesses use to manage websites and customer data.
In 2010, the company sold subsidiary Dun & Bradstreet Credibility Corp. (DBCC) to private investors for $10.0 million. DBCC sells credit reports and related services to U.S. small businesses; it pays licensing fees to use the Dun & Bradstreet brand.
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CONAGRA FOODS INC. $44 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 427.1 million; Market cap: $18.8 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.conagrafoods.com) bought Ralcorp Holdings, the largest private-label food maker in the U.S., for $4.75 billion in January 2013.
The purchase has not worked out as well as ConAgra had hoped, as strong competition hurt Ralcorp’s sales and earnings. As a result, the company has had to write down this investment by $2.1 billion.
In response, ConAgra has launched a restructuring plan aimed at improving Ralcorp’s profitability. This strategy includes better packaging, speeding up deliveries and launching new products. It has also cut its private-label prices, which should help improve Ralcorp’s market share.
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The purchase has not worked out as well as ConAgra had hoped, as strong competition hurt Ralcorp’s sales and earnings. As a result, the company has had to write down this investment by $2.1 billion.
In response, ConAgra has launched a restructuring plan aimed at improving Ralcorp’s profitability. This strategy includes better packaging, speeding up deliveries and launching new products. It has also cut its private-label prices, which should help improve Ralcorp’s market share.
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AT&T INC. $36 (New York symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 5.2 billion; Market cap: $187.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 5.2%; TSINetwork Rating: Average; www.att.com) is the largest wireless provider in the U.S., with 121.8 million subscribers. Wireless supplies 55% of its revenue and 75% of its earnings.
The remaining 45% of revenue and 25% of earnings comes from the company’s wireline division, which sells phone services, television packages and highspeed Internet access to 34.2 million customers.
AT&T’s revenue rose 6.5%, from $124.4 billion in 2010 to $132.4 billion in 2014. Earnings fell 3.9%, from $2.29 a share (or a total of $13.6 billion) in 2010 to $2.20 a share (or $13.1 billion) in 2011, but they recovered to $2.33 a share (or $13.7 billion) in 2012.
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The remaining 45% of revenue and 25% of earnings comes from the company’s wireline division, which sells phone services, television packages and highspeed Internet access to 34.2 million customers.
AT&T’s revenue rose 6.5%, from $124.4 billion in 2010 to $132.4 billion in 2014. Earnings fell 3.9%, from $2.29 a share (or a total of $13.6 billion) in 2010 to $2.20 a share (or $13.1 billion) in 2011, but they recovered to $2.33 a share (or $13.7 billion) in 2012.
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WAL-MART STORES INC. $75 (New York symbol WMT; Conservative Growth Portfolio: Consumer sector; Shares outstanding: 3.2 billion; Market cap: $240.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.walmart .com) aims to spur its online sales with a new plan called ShippingPass that offers U.S. shoppers unlimited threeday shipping for $50 a year. This should help it compete with Amazon’s Prime service, which offers two-day shipping for an annual fee of $99. Thanks to investments like this, Wal-Mart’s online sales jumped 17% in the first quarter of its 2016 fiscal year, which ended April 30, 2015. Wal-Mart is also starting to see the benefits of its efforts to improve sales at its U.S. stores, including speeding up checkout lines and opening smaller stores. Same-stores sales in the U.S. (62% of total sales) rose 1.1%, the third straight quarter of growth....
In March 2015, Kraft Foods soared 40% on news of its merger with ketchup maker Heinz. Speculation about more deals in the food business has also boosted the shares of the four companies below. So far, their earnings haven’t kept up with their stock prices — though we still see two of them as buys. MONDELEZ INTERNATIONAL INC. $40 (Nasdaq symbol MDLZ; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.6 billion; Market cap: $64.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.5%; TSINetwork Rating: Above Average; www.mondelezinternational.com) makes cookies and biscuits (Oreo, Chips Ahoy, Ritz), chocolate bars (Cadbury, Toblerone) and gum and candy (Trident, Chiclets and Halls cough drops). In May 2014, the company agreed to merge its packaged coffee business with European coffee maker D.E. Master Blenders. Under the deal, Mondelez will contribute its coffee brands, including Jacobs, Gevalia and Tassimo, to a new firm called Jacobs Douwe Egberts. It will get about $4.5 billion in cash and 49% of the new company in return....
YUM! BRANDS INC. $92 (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 432.4 million; Market cap: $39.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.yum.com) aims to spur sales at its U.S. KFC restaurants with several new initiatives, including upgrading stores and launching new menu items. The company also plans a new series of TV and online ads featuring an actor playing Colonel Harland Sanders, the late founder of Kentucky Fried Chicken. The stock is up 26% since the start of 2015, partly due to speculation that Yum may spin off its KFC and Pizza Hut chains in China, which account for half of its revenue. Food-safety concerns and strong competition from other fast-food restaurants have hurt Yum’s Chinese operations in the past two years. Yum Brands is still a hold....
HEWLETT-PACKARD CO. $34 (New York symbol HPQ; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.8 billion; Market cap: $61.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.9%; TSINetwork Rating: Average; www.hp.com) is selling 51% of its data-networking equipment and server business in China. Demand for these products has suffered on fears that the U.S. government is using them to collect data on Chinese companies. Hewlett will receive $2.3 billion when it completes the sale by the end of 2015. Meanwhile, its earnings fell 5.6% in the quarter ended April 30, 2015, to $1.6 billion from $1.7 billion a year earlier. Earnings per share declined 1.1%, to $0.87 from $0.88, on fewer shares outstanding. Revenue fell 6.8%, to $25.5 billion from $27.3 billion. The company still plans to split into two firms in November 2015: Hewlett-Packard Enterprise will sell computing products, like servers and analytics software, to businesses and governments, while HP Inc. will focus on personal computers and printers. Hewlett expects breakup-related costs of $400 million to $450 million....