price to sales ratio
CEDAR FAIR L.P. $56 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 55.9 million; Market cap: $3.1 billion; Price-to-sales ratio: 2.8; Dividend yield: 5.4%; TSINetwork Rating: Average; www.cedarfair.com) owns 11 amusement parks, three outdoor water parks, one indoor water park and five hotels. Cedar Fair reported record revenue of $1.16 billion in 2014, up 2.2% from $1.13 billion in 2013. If you exclude the sale of a water park in 2013, attendance was flat. However, spending per guest rose 3%, while out-of-park spending (hotels adjacent to its parks) gained 2%. Higher labour costs and spending on new attractions cut its earnings by 4.1%, to $1.86 a unit from $1.94. The partnership recently raised its quarterly distribution by 7.1%, to $0.75 from $0.70. The new annual rate of $3.00 yields 5.4%....
PFIZER INC. $35 (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 6.3 billion; Market cap: $220.5 billion; Price-to-sales ratio: 4.4; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.pfizer.com) has received approval from the U.S. Food and Drug Administration for new breast cancer drug palbociclib. Pfizer will market this treatment under the Ibrance brand. Ibrance will probably contribute $4 billion to the company’s annual revenue by 2020; last year, Pfizer’s revenue was $49.6 billion. The company spends a high 17% of its revenue on research. This hurts its short-term earnings but lets it develop innovative drugs like Ibrance. New treatments like these help Pfizer offset sales of other drugs that have lost their patent protection, like Lipitor (cholesterol) and Celebrex (arthritis)....
AT&T INC. $34 (New York symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 5.2 billion; Market cap: $176.8 billion; Price-to-sales ratio: 1.3; Dividend yield: 5.5%; TSINetwork Rating: Average; www.att.com) is the largest wireless provider in the U.S., with 120.6 million subscribers. Wireless accounts for 55% of AT&T’s revenue and 75% of its earnings. The remaining 45% of revenue and 25% of earnings comes from its wireline division, which sells phone services, television packages and high-speed Internet access to 34.4 million customers.
Shift to wireless fuelled sales
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ENBRIDGE INC. $62 (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 851.6 million; Market cap: $52.8 billion; Price-to-sales ratio: 1.4; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.enbridge.com) gets 90% of its revenue from pipelines that pump oil and natural gas from Western Canada to Eastern Canada and the U.S. The remaining 10% mainly comes from distributing gas to 2.1 million consumers in Ontario, Quebec, New Brunswick and New York State.
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New projects boost revenue
Since 2008, Enbridge has spent $20 billion on 39 new pipelines and other projects. Thanks to these investments, the company’s revenue soared 164.1%, from $12.5 billion in 2009 to $32.9 billion in 2013. Its revenue probably increased to $37.7 billion in 2014....
IMPERIAL OIL LTD. $50 (Toronto symbol IMO; Conservative Growth and Income Portfolios, Shares outstanding: 847.6 million; Market cap: $42.4 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.0%; TSINetwork Rating: Average; www.imperialoil.ca) spent $5.7 billion on exploration and capital upgrades in 2014, down 29.5% from $8.0 billion in 2013. That’s mainly because it completed the first phase of its 71%-owned Kearl oil sands project. U.S.-based ExxonMobil (New York symbol XOM), which owns 69.6% of Imperial, owns the remaining 29% of Kearl.
For 2015, Imperial expects to spend $4.0 billion on capital projects. Most of that will go toward expanding Kearl, as well as its Cold Lake oil sands property. These projects will last decades, so the recent drop in oil prices will have little impact on their long-term prospects.
Imperial Oil is a buy.
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For 2015, Imperial expects to spend $4.0 billion on capital projects. Most of that will go toward expanding Kearl, as well as its Cold Lake oil sands property. These projects will last decades, so the recent drop in oil prices will have little impact on their long-term prospects.
Imperial Oil is a buy.
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LINAMAR CORP. $77 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.8 million; Market cap: $5.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 0.5%; TSINetwork Rating: Average; www.linamar.com) plans to expand its transmissionmanufacturing facility in Guelph, Ontario....
POTASH CORP. OF SASKATCHEWAN $47 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 830.2 million; Market cap: $39.0 billion; Price-to-sales ratio: 5.9; Dividend yield: 4.1%; TSINetwork Rating: Average; www.potashcorp.com) sold more potash fertilizer in the latest quarter and is benefiting from lower operating costs. But potash prices remain weak.
In the three months ended December 31, 2014, earnings jumped 77.0%, to $407 million from $230 million a year earlier (all amounts except share price and market cap in U.S. dollars). Per-share earnings rose 88.5%, to $0.49 from $0.26, on fewer shares outstanding.
Sales gained 23.4%, to $1.9 billion from $1.5 billion. The company sold 2.5 million tonnes of potash, up 41.6% from 1.8 million a year earlier. However, the average price per tonne rose just 0.7%, to $284 from $282.
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In the three months ended December 31, 2014, earnings jumped 77.0%, to $407 million from $230 million a year earlier (all amounts except share price and market cap in U.S. dollars). Per-share earnings rose 88.5%, to $0.49 from $0.26, on fewer shares outstanding.
Sales gained 23.4%, to $1.9 billion from $1.5 billion. The company sold 2.5 million tonnes of potash, up 41.6% from 1.8 million a year earlier. However, the average price per tonne rose just 0.7%, to $284 from $282.
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TORSTAR CORP. $7.07 (Toronto symbol TS.B; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 80.1 million; Market cap: $566.3 million; Price-to-sales ratio: 0.5; Dividend yield: 7.4%; TSINetwork Rating: Average; www.torstar.com) gets 60% of its revenue from advertising on its newspapers and their websites, including The Toronto Star, Canada’s largest daily by circulation. Subscriptions account for most of the remaining 40%.
As part of a new strategy to increase online ad sales, Torstar plans to drop the paywall on The Toronto Star’s website and launch a new version for tablet computers. The shift will likely hurt its 2015 revenue but should attract more readers.
The company is debt-free and holds cash of $277.3 million, or $3.46 a share. That will help it adjust to the new online strategy. In addition, dividends total roughly $42 million a year, so the current payout still seems safe.
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As part of a new strategy to increase online ad sales, Torstar plans to drop the paywall on The Toronto Star’s website and launch a new version for tablet computers. The shift will likely hurt its 2015 revenue but should attract more readers.
The company is debt-free and holds cash of $277.3 million, or $3.46 a share. That will help it adjust to the new online strategy. In addition, dividends total roughly $42 million a year, so the current payout still seems safe.
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TRANSCONTINENTAL INC. $16 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 4.0%; TSINetwork Rating: Average; www. tctranscontinental.com) is Canada’s leading printer of flyers, magazines, newspapers and books. It also publishes magazines and newspapers.
The company recently agreed to sell its consumer magazine division to TVA Group (Toronto symbol TVA.B). This business publishes 15 English- and French-language magazines, including Elle Canada, Canadian Living and The Hockey News. As part of the deal, Transcontinental will keep printing these magazines, as well as other TVA publications, to the end of June 2022.
Selling these magazines will let the company focus on its smaller newspapers and related websites, which serve local advertisers instead of relying on less profitable national ads.
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The company recently agreed to sell its consumer magazine division to TVA Group (Toronto symbol TVA.B). This business publishes 15 English- and French-language magazines, including Elle Canada, Canadian Living and The Hockey News. As part of the deal, Transcontinental will keep printing these magazines, as well as other TVA publications, to the end of June 2022.
Selling these magazines will let the company focus on its smaller newspapers and related websites, which serve local advertisers instead of relying on less profitable national ads.
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PENGROWTH ENERGY CORP. $4.15 (Toronto symbol PGF; Aggressive Growth and Income Portfolios, Resources sector; Shares outstanding: 530.2 million; Market cap: $2.2 billion; Price-to-sales ratio: 1.8; Dividend yield: 5.8%; TSINetwork Rating: Average; www.pengrowth.com) recently started up its Lindbergh oil sands project in eastern Alberta, which should produce 16,000 barrels a day by the end of 2015.
Due to falling oil prices and Lindbergh’s completion, Pengrowth plans to spend $200 million to upgrade and maintain its properties in 2015, down 74.0% from $770 million last year.
But even with the lower spending, Pengrowth expects to produce between 73,000 and 75,000 barrels a day (57% oil and liquids, 43% natural gas) in 2015, or about 1.5% more than in 2014, thanks to Lindbergh.
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Due to falling oil prices and Lindbergh’s completion, Pengrowth plans to spend $200 million to upgrade and maintain its properties in 2015, down 74.0% from $770 million last year.
But even with the lower spending, Pengrowth expects to produce between 73,000 and 75,000 barrels a day (57% oil and liquids, 43% natural gas) in 2015, or about 1.5% more than in 2014, thanks to Lindbergh.
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