price to sales ratio

LINAMAR CORP. $57 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.8 million; Market cap: $3.7 billion; Price-to-sales ratio: 0.9; Dividend yield: 0.7%; TSINetwork Rating: Average; www.linamar.com) has agreed to buy California Forge Co.’s highvolume hot-forging business. It is also buying 66% of Germany’s Seissenschmidt AG, which also specializes in hot forging. These purchases will improve Linamar’s ability to make specialized parts, such as gears, wheel bearings, hubs and sprockets. That will make its transmissions and powertrains perform better by cutting noise, vibration and excess weight. The company didn’t say how much it is paying for these businesses. However, they should add $450 million to its annual sales of $4.0 billion....

Loblaw and Metro (see next article) are dealing with competition from U.S. retailers like Wal-Mart and Target in different ways: Loblaw has increased its market share by acquiring Shoppers Drug Mart, while Metro aims to make its existing stores more profitable. Both strategies should pay off. LOBLAW COMPANIES LTD. $56 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 413.5 million; Market cap: $23.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.loblaw.ca) is Canada’s largest food retailer, with about 1,200 stores. Its banners include Loblaws, Provigo, Fortinos, Real Canadian Superstore and No Frills. In March 2014, Loblaw bought the 1,250-store Shoppers Drug Mart chain for $12.3 billion in cash and stock....

METRO INC. $75 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 85.1 million; Market cap: $6.4 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.6%; TSINetwork Rating: Average; www.metro.ca) operates 600 grocery stores and 250 drugstores in Quebec and Ontario. In its fiscal 2014 third quarter, which ended July 5, 2014, Metro earned $144.5 million, unchanged from a year earlier. The company spent $147.2 million on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share gained 9.4%, to $1.63 from $1.49. Sales rose 1.4%, to $3.62 billion from $3.57 billion. Same-store sales gained 1.0%. The company continues to benefit from the recent reorganization of its Ontario operations, including converting certain Metro outlets to the discount Food Basics banner....

Torstar has struggled in the past few years as more people get their news from the Internet, rather than newspapers. Meanwhile, Pengrowth (see box) has also suffered as rising North American shale production has cut oil and gas prices. The resulting share-price declines are why both companies’ dividend yields appear so high. But both are doing a good job of responding to their challenges, which should let them improve their earnings and maintain their current payouts. TORSTAR CORP. $7.11 (Toronto symbol TS.B; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 80.1 million; Market cap: $569.5 million; Price-to-sales ratio: 0.5; Dividend yield: 7.4%; TSINetwork Rating: Average; www.torstar.com) publishes the Toronto Star, Canada’s largest daily newspaper by circulation. It also publishes three other daily papers and over 100 weeklies....

PENGROWTH ENERGY CORP. $5.02 (Toronto symbol PGF; Aggressive Growth and Income Portfolios, Resources sector; Shares outstanding: 528.1 million; Market cap: $2.7 billion; Price-to-sales ratio: 2.0; Dividend yield: 9.6%; TSINetwork Rating: Average; www.pengrowth.com) is shifting away from its traditional oil and natural gas operations and into projects with better long-term potential, such as its Lindbergh oil sands development in Alberta’s Cold Lake region. Pengrowth is spending $630 million on Lindbergh’s first phase, which should start up in early 2015 and produce 12,500 barrels a day. That’s equal to 16.9% of Pengrowth’s second quarter output of 73,823 barrels a day (56% oil and natural gas liquids, 44% natural gas). Future phases will raise the project’s daily production to 50,000 barrels by 2020. Lindbergh’s reserves should last 25 years. The company’s cash flow per share will probably fall from $1.09 in 2013 to $1.01 in 2014. However, it should improve to $1.38 in 2015. The stock trades at a low 3.6 times that forecast. Pengrowth’s improving cash flow should also let it keep paying monthly dividends of $0.04 a share, for an 9.6% annualized yield....

CANADIAN PACIFIC RAILWAY LTD. $231(Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.5 million; Market cap: $39.6 billion; Price-to-sales ratio: 6.4; Dividend yield: 0.6%; TSINetwork Rating: Above Average; www.cpr.ca) prefers to use its excess cash to buy back shares instead of raising its dividend. That’s because many of its investors live in the U.S. and are subject to withholding taxes on dividends from Canadian firms. The company could repurchase up to 5.3 million shares under its latest authorization. It has now reached this limit, so it has increased its target to 12.65 million shares, or 7% of the total outstanding. It expects to complete these purchases by March 16, 2015. CP Rail is a buy....

TECK RESOURCES LTD. $19 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 566.8 million; Market cap: $10.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 4.7%; TSINetwork Rating: Average; www.teck.com) has dropped 25% in the past three months, mainly due to the U.S. dollar’s recent rise and slowing economic growth in China and other parts of Asia. These factors have depressed the prices of metallurgical coal (which supplies 42% of Teck’s revenue) and copper (32%). However, the company continues to benefit from rising zinc prices (26%). Thanks to better-than-expected production at its Red Dog mine in Alaska, Teck expects to produce 600,000 to 615,000 tonnes of zinc in 2014, up from its original forecast of 555,000 to 585,000. The company also plans to reopen its Pend Oreille zinc mine in Washington State by the end of 2014. Meanwhile, Teck continues to aggressively cut its operating costs. It lowered its annual expenses by $360 million in 2013 and should achieve additional savings of $180 million a year by the end of 2014. The company has also reduced this year’s spending on new projects and upgrades by $150 million....

CGI GROUP INC. $38 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 311.7 million; Market cap: $11.8 billion; Price-to-sales ratio: 1.1; No dividends paid; TSINetwork Rating: Extra Risk; www.cgi.com) is Canada’s largest provider of computer outsourcing services. CGI helps its clients automate routine functions, like accounting and buying supplies. That makes them more efficient and lets them focus on their main businesses. Two-pronged strategy spurs results CGI follows what it calls a “Build and Buy” strategy. The “Build” part refers to expanding relationships with existing clients and attracting new ones. The company’s long-term outsourcing contracts give it steady, predictable revenue streams. They also let CGI sell these clients other services....

Google first sold shares to the public at $42.50 each (split-adjusted) in August 2004. Since then, the stock has soared by 1,307.1%. We think the company is just getting started. It continues to dominate Internet search, and the web’s ongoing spread into developing countries should keep this business’s profits rising. What’s more, most of these new users will likely use mobile devices powered by Google’s Android software. To top it off, the stock remains attractive in relation to the company’s projected earnings....

TIM HORTONS INC. $80 (New York symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 132.8 million; Market cap: $10.6 billion; Price-to-sales ratio: 3.7; Dividend yield: 1.5%; TSINetwork Rating: Average; www.timhortons.com) still plans to go ahead with its deal to merge with Miami-based Burger King Worldwide (New York symbol BKW), even though the U.S. government is now clamping down on “tax inversion” deals like this. The combined firm will be based in Oakville, Ontario, which will let it take advantage of Canada’s 15% corporate tax rate, compared to 35% in U.S. Under the new rules, it is now more difficult for the foreign parent firm to shift funds between subsidiaries....