price to sales ratio

Inflation remains low in Canada. That’s one reason why interest rates remain at today’s historically low levels. However, the long-term outlook is for higher rates, as the expansion of the money supply in the past few years will likely spur inflation. We continue to advise against investing in bonds, because low interest rates hurt their appeal, while rising rates would push down their future value. If you need stable income, we prefer highyielding utilities like these four. Their dividends also qualify for the dividend tax credit....

MAPLE LEAF FOODS INC. $20 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 141.9 million; Market cap: $2.8 billion; Price-to-sales ratio: 0.6; Dividend yield: 0.8%; TSINetwork Rating: Average; www.mapleleaf.ca) ships only a small portion of its pork products to Russia, so that country’s recent ban on food imports from Canada will have little effect on its sales and earnings. Pork prices have moved up recently, because a virus has cut hog supplies. As a result, consumers have shifted to beef and other meats. However, the Russian pork ban could cut prices in Canada, which would help spur demand for Maple Leaf’s products. Meanwhile, Maple Leaf’s sales rose 9.6% in the three months ended June 30, 2014, to $831.8 million from $759.3 million a year earlier, as higher selling prices offset lower volumes. The company continues to restructure, including closing older plants. Its loss narrowed to $0.13 a share from $0.25....

SHAWCOR LTD. $59 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 60.2 million; Market cap: $3.6 billion; Price-to-sales ratio: 1.9; Dividend yield: 1.0%; TSINetwork Rating: Average; www.shawcor.com) recently completed a big pipeline-coating job at a liquefied natural gas project in Australia. As a result, its revenue fell 3.5% in the second quarter of 2014, to $441.4 million from $457.3 million a year earlier. Earnings per share declined 12.2%, to $0.79 from $0.90. However, new contracts have increased ShawCor’s order backlog. On June 30, 2014, it stood at $684 million, up 10.9% from the start of the year. ShawCor is also bidding on over $1 billion worth of new contracts and should win many of them. ShawCor is a buy.

SNC-LAVALIN GROUP INC. $56 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.3 million; Market cap: $8.5 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.7%; TSINetwork Rating: Average; www.snclavalin.com) has agreed to sell its 21% stake in Astoria I, a private partnership that operates a gas-fired power plant in New York City. The company did not say how much it would receive. However, it recently sold most of its interest in Astoria II, which operates a second power plant on the same site, for $87.6 million. To put that in context, SNC earned $32.1 million, or $0.21 a share, in the three months ended June 30, 2014. The sale cut SNC’s stake in Astoria II from 18.5% to 6.2%. These sales are part of SNC’s new plan to focus on engineering projects in areas with stronger growth potential, such as mining, water treatment and oil and gas....

AGRIUM INC. $99 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 143.7 million; Market cap: $14.2 billion; Price-to-sales ratio: 0.9; Dividend yield 3.3%; TSINetwork Rating: Average; www.agrium.com) has suspended operations at its Vanscoy, Saskatchewan, potash mine because the main hoist system failed. Agrium will use the shutdown to speed up its plan to increase the mine’s capacity. The company expects the outage to cost $40 million (all amounts except share price and market cap in U.S. dollars). To put that in context, Agrium earned $625 million, or $4.34 a share, in the second quarter of 2014. That’s down 16.0% from $744 million, or $5.00 a share, a year earlier. Record earnings from Agrium’s retail stores, which sell fertilizers and seeds to farmers in North America, South America and Australia, offset lower bulk fertilizer prices....

BANK OF NOVA SCOTIA $72 (Toronto symbol BNS; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.2 billion; Market cap: $86.4 billion; Price-to-sales ratio: 3.0; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.scotiabank.com) has completed the sale of most of its shares in mutual fund company CI Financial (Toronto symbol CIX). That cut its stake to 7.7% from 36.8%. The bank now expects to report an after-tax gain of $550 million on the sale, up from its earlier estimate of $400 million. That will help with its plan to buy back 1% of its outstanding shares by the end of May 2015. Bank of Nova Scotia is a buy.

TECK RESOURCES LTD. $25 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 576.2 million; Market cap: $14.4 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.6%; TSINetwork Rating: Average; www.teck.com) is a leading producer of metallurgical coal, a key ingredient in steelmaking. Its six coal mines (five in B.C. and one in Alberta) have lifespans from six to 70 years. The company sells most of its coal to customers in Asia. In 2013, coal accounted for 43% of Teck’s revenue and 41% of its earnings. Teck also produces copper (30%, 41%), which manufacturers use to make electrical wire, auto parts and components for electronic devices. As well, Teck is a major supplier of zinc (27%, 18%), which prevents rusting when added to steel....

AMERICAN EXPRESS CO. $89 (New York symbol AXP, Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.0 billion; Market cap: $89.0 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.2%; TSINetwork Rating: Average; www. americanexpress.comtarget=”_blank”) started up in 1850 and is now one of the world’s largest issuers of payment cards, with 109.9 million cards outstanding in over 130 countries. Billionaire investor Warren Buffett owns 14.3% of the company.

Amex issues two types of cards: charge cards, which have no preset spending limit and must be paid in full each month; and traditional credit cards, which let users carry a balance.

High-quality clientele cuts risk

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PROCTER & GAMBLE CO. $83 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $224.1 billion; Price-to-sales ratio: 2.9; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.pg.comtarget=”_blank”) plans to sell just over half of its brands over the next two years.

That will let the company focus on its 70 to 80 most popular products, which together account for over 90% of its sales. These include 25 global brands, such as Head & Shoulders shampoo, Gillette razors, Tide detergent and Pampers diapers, that each generate over $1 billion in annual sales.

Meanwhile, Procter’s sales rose 0.6% in its 2014 fiscal year, which ended June 30, 2014, to $83.1 billion from $82.6 billion in fiscal 2013. Higher sales volumes (up 3%) and selling prices (up 1%) offset the negative impacts of currency exchange rates (down 2%) and low-margin products (down 1%). Before writedowns and unusual items, earnings rose 5.0%, to $4.22 a share from $4.02.

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FAIR ISAAC CORP. $57 (New York symbol FICO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 32.2 million; Market cap: $1.8 billion; Price-to-sales ratio: 2.7; Dividend yield: 0.1%; TSINetwork Rating: Average; www.fico.com) makes FICO Scores, a computer program that helps businesses make better decisions about customer creditworthiness.

The company recently repurchased $150.0 million of its shares under a buyback plan that ended in July 2014. Under its new authorization, it can buy back up to $250.0 million of shares. That’s equal to 14% of its market cap. There is no time limit for these buybacks.

Fair Isaac is a hold.

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