price to sales ratio

ENCANA CORP. $21 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 741.1 million; Market cap: $15.6 billion; Price-to-sales ratio: 2.3; Dividend yield: 1.5%; TSINetwork Rating: Average; www.encana.com) recently narrowed its focus from around 30 unconventional natural gas properties to just six. These fields also produce significant amounts of oil and natural gas liquids, such as butane and propane.

The company now expects that liquids will account for 75% of next year’s operating cash flow, two years ahead of its original target.

Encana’s revenue rose 31.8%, from $6.7 billion in 2009 to $8.9 billion in 2010 (all amounts except share price and market cap in U.S. dollars). It then fell to $5.2 billion in 2012. However, revenue recovered to $5.9 billion in 2013 and could reach $7.0 billion in 2014.

Earnings dropped from $2.35 a share (or a total of $1.8 billion) in 2009 to $0.54 a share (or $398 million) in 2011. They then rebounded to $1.35 a share (or $997 million) in 2012, but fell to $1.09 a share (or $802 million) in 2013.

...

CENOVUS ENERGY INC. $29 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 757.1 million; Market cap: $22.0 billion; Price-to-sales ratio: 1.0; Dividend yield: 3.7%; TSINetwork Rating: Average; www.cenovus.comtarget=”_blank”) gets 40% of its revenue from its oil sands projects and conventional oil and gas wells in western Canada. These properties’ reserves should last 24 years.

Refining supplies the remaining 60% of Cenovus’s revenue. The company ships its oil to its 50%-owned refineries in Illinois and Texas. Phillips 66 (New York symbol PSX) owns the other 50% of these operations.

Thanks to higher production and oil prices, Cenovus’s revenue increased 62.0%, from $11.5 billion in 2009 to $18.7 billion in 2013. Even with the recent oil price decline, its revenue should rise to around $20 billion in 2014.

...

Five years ago, the old EnCana Corp. split itself into two new firms: the new Encana, which focuses on natural gas, and Cenovus Energy, which owns oil sands properties and refineries. Lower gas prices have cut Encana’s share price by 30% since the split. Due to the recent drop in oil prices, Cenovus’s stock has gained about 9% in the last five years. Energy prices could fall further, as new production techniques, particularly hydraulic fracturing (or fracking) and horizontal drilling, add to supplies. However, a colder-thannormal winter would boost oil and gas demand for heating....

CANADIAN TIRE CORP. $126 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 78.1 million; Market cap: $9.8 billion; Price-to-sales ratio: 0.8; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.canadiantire.ca) continues to add new locations and renovate older stores. It’s also benefiting from its 2011 purchase of the Forzani Group of sporting goods stores, including the popular Sport Chek banner. These moves are helping it compete with U.S.-based retailers like Wal-Mart. In the quarter ended September 27, 2014, Canadian Tire’s earnings rose 18.4%, to $172.2 million from $145.5 million a year earlier. Earnings per share gained 21.2%, to $2.17 from $1.79, on fewer shares outstanding. Overall sales rose 3.9%, to $3.1 billion from $3.0 billion. Same-store sales at the 493 Canadian Tire outlets gained 3.2% on strong demand for summer goods, like garden tools and patio furniture, and automotive products and services....

Canada’s big five banks will likely report record earnings in 2014, as low interest rates keep fueling loan demand. The improving economy also means the banks are dealing with fewer bad loans, giving them more room for dividend hikes. Every Canadian investor should own at least two of our banks. For new buying, TD and Bank of Nova Scotia remain our top picks. TORONTO-DOMINION BANK $57 (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $102.6 billion; Price-to-sales ratio: 3.0; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.td.comtarget="_blank”) is Canada’s largest bank, with $921.8 billion of assets....

HOME CAPITAL GROUP INC. $50 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 70.1 million; Market cap; $3.5 billion; Price-to-sales ratio: 3.5; Dividend yield: 1.6%; TSINetwork Rating: Average; www.homecapital.com) caters to borrowers who don’t meet the stricter standards of traditional banks. Its clients include recent immigrants with limited credit histories, and the self-employed. However, Home Capital continues to do a good job of identifying problem loans early and adjusting the payment terms. That keeps its loan losses down. In the three months ended September 30, 2014, earnings rose 10.5%, to $1.05 a share from $0.95 a year earlier. Revenue gained 6.5%, to $255.0 million from $239.4 million. Bad loans were just 0.27% of the Home Capital’s total loans, down from 0.35%....

TELUS CORP. $42 (Toronto symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 612.0 million; Market cap: $25.7 billion; Price-to-sales ratio: 2.2; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.telus.com) added 113,000 new wireless subscribers, net of cancellations, in the three months ended September 30, 2014, up 8.7% from a year earlier. It now has 8.0 million wireless subscribers. In addition, it continues to attract high-speed Internet and digital TV users. As a result, its revenue rose 5.4%, to $3.0 billion from $2.9 billion. Earnings gained 6.0%, to $387 million from $365 million. Telus spent $164 million on share buybacks in the latest quarter, so its per-share earnings rose 10.3%, to $0.64 from $0.58. The company also raised its quarterly dividend by 11.1%, to $0.40 a share from $0.36. The new annual rate of $1.60 yields 3.8%. This was the eighth hike since May 2011....

TORSTAR CORP. $6.20 (Toronto symbol TS.B; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 80.2 million; Market cap: $497.2 million; Price-to-sales ratio: 0.4; Dividend yield: 8.5%; TSINetwork Rating: Average; www.torstar.com) has teamed up with the publisher of Montreal’s La Presse newspaper to launch a free version of the Toronto Star specifically for tablet computers. La Presse launched its own tablet version in 2013. So far, it has attracted over 450,000 users. Under this agreement, Torstar will use La Presse’s technology. The two companies will also jointly sell online ads, which should appeal to national advertisers that aim to reach both English and French readers....

Maple Leaf Foods is nearing the end of its multi-year plan to unload less profitable businesses and modernize its meat-processing plants. The plan’s costs have depressed the company’s earnings, but it greatly improves its prospects. We also have a high opinion of Saputo (see box), but its growth relies on buying dairy producers in other countries, which adds risk. MAPLE LEAF FOODS INC. $19 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 142.1 million; Market cap: $2.7 billion; Price-to-sales ratio: 0.7; Dividend yield: 0.8%; TSINetwork Rating: Average; www.mapleleaf.ca) is Canada’s largest food processing company. It mainly sells its products, including fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands....

SAPUTO INC. $32 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 390.7 million; Market cap: $12.5 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.6%; TSINetwork Rating: Average; www.saputo.com) earned $155.7 million in its fiscal 2015 second quarter, which ended September 30, 2014. That’s up 16.8% from $133.3 million a year earlier. Earnings per share gained 14.7%, to $0.39 from $0.34, on more shares outstanding (all per-share amounts adjusted for a 2-for-1 stock split in September 2014). Sales rose 21.1%, to $2.7 billion from $2.3 billion. That’s mainly because of Warrnambool Cheese and Butter Factory, an Australian maker of milk, cheese, butter and other dairy products; Saputo bought 87.92% of Warrnambool for $449.6 million in January 2014. Higher selling prices for cheese and butter in the U.S. also contributed to the gain....