price to sales ratio
FORD MOTOR CO. $14 (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 3.8 billion; Market cap: $53.2 billion; Price-to-sales ratio: 0.4; Dividend yield: 4.3%; TSINetwork Rating: Extra Risk; www.ford.com) sold 2.5 million vehicles in the U.S. in 2014, down 0.5% from 2013. Truck sales (38% of the 2014 total) fell 0.7% as Ford slowed production of its popular F-150 as it prepared to launch a new version that uses lightweight aluminum body panels. Car sales (32%) declined 3.8%, but SUV sales (30%) gained 3.5%. The company also raised its dividend by 20.0%. The new annual rate of $0.60 a share yields 4.3%....
AMERICAN EXPRESS $82 (New York symbol AXP, Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.0 billion; Market cap: $82.0 billion; Price-to-sales ratio: 2.6; Dividend yield: 1.3%; TSINetwork Rating: Average; www.americanexpress.com) earned $1.4 billion in the three months ended December 31, 2014, up 10.6% from $1.3 billion a year earlier. Per-share earnings rose 14.9%, to $1.39 from $1.21, on fewer shares outstanding. Revenue gained 6.6%, to $9.1 billion from $8.5 billion, as cardholder spending rose 6% and credit card balances grew by 7%. The company is now cutting 6% of its workforce as part of a plan to improve its overall efficiency. Severance costs cut its earnings by $206 million in the latest quarter. However, the savings will help Amex invest in new growth initiatives, including adapting its networks to process purchases made from smartphones. American Express is a buy....
CINTAS CORP. $78 (Nasdaq symbol CTAS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 117.3 million; Market cap: $9.1 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.1%; TSINetwork Rating: Average; www.cintas.com) provides a range of products and services to over one million businesses, mainly in North America. The company gets 71% of its revenue by renting uniforms that it makes and cleans. This business also rents a variety of related products, such as mats, towels, mops and cleaning supplies. Cintas gets a further 10% of its revenue by selling uniforms. In addition, the company sells first aid kits, fire extinguishers, sprinklers and emergency-exit lights (11%). It also shreds corporate documents (8%). In April 2014, it merged its shredding operations with Shred-it International. In exchange, Cintas received 42% of the combined company, which uses the Shred-it brand, plus $180 million in cash....
SUNCOR ENERGY INC. $35 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $52.5 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.2%; TSINetwork Rating: Average; www. suncor.com) gets 40% of its revenue and 65% of its earnings by producing oil and natural gas, mainly at its large Alberta oil sands projects. The remaining 60% of revenue and 35% of earnings come from its four oil refineries and 1,500 Petro-Canada gas stations.
Big merger boosted results
Suncor merged with rival Petro-Canada in 2009, increasing its revenue by 52.2%, from $25.5 billion in 2009 to $38.8 billion in 2011. Lower oil prices cut the company’s revenue to $38.5 billion in 2012. In 2013, Suncor sold most of its Western Canadian natural gas operations for $1 billion. However, higher oil prices offset the lower production, and its revenue rose to $40.3 billion.
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Big merger boosted results
Suncor merged with rival Petro-Canada in 2009, increasing its revenue by 52.2%, from $25.5 billion in 2009 to $38.8 billion in 2011. Lower oil prices cut the company’s revenue to $38.5 billion in 2012. In 2013, Suncor sold most of its Western Canadian natural gas operations for $1 billion. However, higher oil prices offset the lower production, and its revenue rose to $40.3 billion.
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BOMBARDIER INC. (Toronto symbols BBD.A $4.15 and BBD.B $4.14; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $7.1 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.bombardier.com) has won several orders for new regional jets, business jets and turboprop planes. Assuming these customers exercise all of their options, these deals are worth a total of $1.7 billion (all amounts except share prices and market cap in U.S. dollars). That’s equal to 9% of the company’s annual revenue of $19.5 billion.
In addition, Bombardier has received an order for 42 passenger railcars from the operator of a public transit system near Paris, France. This deal is worth $484 million, and the company will begin delivering the trains in 2017.
Bombardier B stock is a buy.
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In addition, Bombardier has received an order for 42 passenger railcars from the operator of a public transit system near Paris, France. This deal is worth $484 million, and the company will begin delivering the trains in 2017.
Bombardier B stock is a buy.
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IGM FINANCIAL INC. $44 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 251.6 million; Market cap: $11.1 billion; Price-to-sales ratio: 4.0; Dividend yield: 5.1%; TSINetwork Rating: Above Average; www.igmfinancial.com) had $141.9 billion of assets under management on December 31, 2014, up 7.7% from $131.8 billion a year earlier.
The company’s fee income rises and falls with the value of the mutual funds and other securities it manages, so its revenue and earnings benefit when the value of these assets increases.
However, IGM’s overall mutual fund redemptions exceeded sales by $30.6 million in December. Net gains at the company’s Investors Group (up $13.3 million) and Counsel (up $19.7 million) subsidiaries failed to offset $63.1 million of net redemptions at its Mackenzie division.
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The company’s fee income rises and falls with the value of the mutual funds and other securities it manages, so its revenue and earnings benefit when the value of these assets increases.
However, IGM’s overall mutual fund redemptions exceeded sales by $30.6 million in December. Net gains at the company’s Investors Group (up $13.3 million) and Counsel (up $19.7 million) subsidiaries failed to offset $63.1 million of net redemptions at its Mackenzie division.
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ENCANA CORP. $15 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 741.0 million; Market cap: $11.1 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.2%; TSINetwork Rating: Average; www.encana.com) has agreed to sell its natural gas pipelines and compression facilities in B.C.’s Montney region to a partnership between Veresen Inc. (Toronto symbol VSN) and investment firm KKR & Co. (New York symbol KKR). Encana will continue to own and operate gas wells in this region.
Encana will get $412 million (Canadian) when the sale closes in the next few weeks. To put that in context, it earned $281 million U.S., or $0.38 U.S. a share, in the quarter ended September 30, 2014.
Encana is a buy.
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Encana will get $412 million (Canadian) when the sale closes in the next few weeks. To put that in context, it earned $281 million U.S., or $0.38 U.S. a share, in the quarter ended September 30, 2014.
Encana is a buy.
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SHAWCOR LTD. $38 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.5 million; Market cap: $2.5 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and gas pipelines from rusting. It also manufactures industrial products, such as electrical wire and protective sheaths.
Low oil prices are prompting oil and gas producers to delay new drilling projects in the Gulf of Mexico. As a result, ShawCor will write down the value of its pipe-coating facility in Texas. Meanwhile, the devaluation of Venezuela’s currency has prompted the company to write down its 50% joint venture in that country.
These charges will cut ShawCor’s earnings by $80 million in the fourth quarter of 2014. To put that in context, it earned $115.5 million, or $1.90 a share, in the first nine months of the year.
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Low oil prices are prompting oil and gas producers to delay new drilling projects in the Gulf of Mexico. As a result, ShawCor will write down the value of its pipe-coating facility in Texas. Meanwhile, the devaluation of Venezuela’s currency has prompted the company to write down its 50% joint venture in that country.
These charges will cut ShawCor’s earnings by $80 million in the fourth quarter of 2014. To put that in context, it earned $115.5 million, or $1.90 a share, in the first nine months of the year.
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ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $48 and ACO.Y [class II voting] $48; Income Portfolio, Utilities sector; Shares outstanding: 115.1 million; Market cap: $5.5 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.atco.com) holds 53.2% of Canadian Utilities (see left). It also owns 75.5% of ATCO Structures & Logistics, which builds temporary buildings for construction and energy exploration firms; Canadian Utilities owns the remaining 24.5%.
The drop in oil prices is hurting growth at the structures business. As a result, ATCO likely earned $3.02 a share in 2014, down 10.9% from 2013. But higher earnings from Canadian Utilities should raise its 2015 earnings to $3.39 a share, and the stock trades at 14.2 times that estimate. The $0.99 dividend yields 1.8%.
Based on current prices, you can buy an ATCO share for $48 and get roughly $51 worth of Canadian Utilities. That means you get ATCO’s structures business, which provides around 25% of its earnings, for free.
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The drop in oil prices is hurting growth at the structures business. As a result, ATCO likely earned $3.02 a share in 2014, down 10.9% from 2013. But higher earnings from Canadian Utilities should raise its 2015 earnings to $3.39 a share, and the stock trades at 14.2 times that estimate. The $0.99 dividend yields 1.8%.
Based on current prices, you can buy an ATCO share for $48 and get roughly $51 worth of Canadian Utilities. That means you get ATCO’s structures business, which provides around 25% of its earnings, for free.
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CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $42 and CU.X [class B voting] $42; Income Portfolio, Utilities sector; Shares outstanding: 263.3 million; Market cap: $11.1 billion; Price-to-sales ratio: 3.1; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.canadianutilities.com) distributes electricity and natural gas in Alberta and Australia. It also operates 18 power plants in Canada, Australia and the U.K. ATCO Ltd. owns 53.2% of the company.
Alberta power regulators recently selected Canadian Utilities to build and operate a new 500- kilometre transmission line between Edmonton and Fort Mc- Murray, an area where power demand could double in the next 10 years.
The company will own 80% of a joint venture that will build this project. Quanta Services (New York symbol PWR) will own the remaining 20%. Canadian Utilities’ share of the $1.43-billion cost is $1.14 billion. Construction will begin in 2017, and the new line should start up in 2019.
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Alberta power regulators recently selected Canadian Utilities to build and operate a new 500- kilometre transmission line between Edmonton and Fort Mc- Murray, an area where power demand could double in the next 10 years.
The company will own 80% of a joint venture that will build this project. Quanta Services (New York symbol PWR) will own the remaining 20%. Canadian Utilities’ share of the $1.43-billion cost is $1.14 billion. Construction will begin in 2017, and the new line should start up in 2019.
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