price to sales ratio

MOTOROLA SOLUTIONS INC. $66 (New York symbol MSI; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 258.7 million; Market cap: $17.1 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.9%; TSINetwork Rating: Average; www.motorolasolutions.com) makes bar-code scanners and radios for police and fire vehicles. In the third quarter of 2013, overall sales fell 1.9%, to $2.11 billion from $2.15 billion a year earlier. That’s partly due to the recent federal government shutdown: sales to government clients (which account for 69% of Motorola Solutions’ total sales) declined 3.7%. However, sales to businesses (31%) rose 2.4%. The company’s new restructuring plan, which includes closing some plants and cutting jobs, should save it $50 million a year by the end of 2014. It is already realizing some of these savings, which helped increase its earnings by 49.0% in the latest quarter, to $307 million from $206 million. Per-share earnings gained 61.1%, to $1.16 from $0.72, on fewer shares outstanding. Without unusual items, earnings per share rose 57.1%, to $1.32 from $0.84....

AGILENT TECHNOLOGIES INC. $54 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 333.0 million; Market cap: $18.0 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.0%; TSINetwork Rating: Average; www.agilent.com) plans to break itself into two publicly traded companies. One of these businesses will keep the Agilent name and focus on testing equipment for medical-research labs. In the parent company’s 2013 fiscal year, which ended October 31, 2013, the division that will form this new firm saw its sales rise 9.9%, to $3.9 billion from $3.5 billion in fiscal 2012. That’s mainly due to strong demand from pharmaceutical makers, and rising sales of gear for testing food safety in China and other developing countries. This company will pay a dividend comparable to Agilent’s current 1.0% yield. The second company will make testing systems for improving electronics, such as cellphones and computer equipment. Its fiscal 2013 revenue fell 12.9%, to $2.9 billion from $3.3 billion. That’s partly because U.S. budget cuts hurt demand from aerospace and defence clients. However, new testing systems for wireless networks should boost this firm’s revenue in fiscal 2014. This second firm will not pay a dividend, at least initially....

Sales of automated teller machines (ATMs) have slowed in developed markets like North America and Europe, as banks in these regions continue to cut their spending in the wake of the 2008 financial crisis. However, the long-term outlook for these ATM makers is bright, because ATMs help banks cut their operating costs. As well, rising prosperity is prompting banks in developing markets to add more ATMs. NCR CORP. $35 (New York symbol NCR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 166.4 million; Market cap: $5.8 billion; Price-to-sales ratio: 0.9; No dividends paid; TSINetwork Rating: Average; www.ncr.com) continues to benefit from its $791-million purchase of Israel-based Retalix in February 2013. Retalix’s software helps retailers manage sales and inventory. In the quarter ended September 30, 2013, Retalix contributed $80 million to NCR’s revenue, which rose 5.1%, to $1.5 billion from $1.4 billion a year earlier. That missed the consensus revenue estimate of $1.58 billion, which caused the stock to fall 11%. Earnings gained 20.9%, to $185 million from $153 million. Earnings per share rose 18.8%, to $0.76 from $0.64....

GENERAL MILLS INC. $51 (New York symbol GIS, Conservative Growth Portfolio, Consumer sector; Shares outstanding: 634.3 million; Market cap: $31.6 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.generalmills.com) expects costs for ingredients like wheat and corn to rise 3% in its 2014 fiscal year, which ends May 24, 2014. It is also spending more to develop new foods, like gluten-free cereals. However, cost controls should help offset these increases. As a result, General Mills still expects to earn $2.87 to $2.90 a share in fiscal 2014. The stock trades at a reasonable 17.7 times the midpoint of that range. General Mills is a buy.

INTERNATIONAL FLAVORS & FRAGRANCES INC. $88 (New York symbol IFF; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.5 million; Market cap: $7.2 billion; Price-to-sales ratio: 2.5; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.iff.com) produces compounds that improve the taste of food and make consumer products smell better. The company continues to benefit from rising demand in fast-growing markets like China, India and Turkey. In the three months ended September 30, 2013, sales in these countries rose 8% and now supply 48% of IFF’s total. That helped push up the company’s overall sales by 4.7% in the quarter, to $742.3 million from $709.0 million a year earlier. Earnings per share gained 13.0%, to $1.22 from $1.08. IFF is a buy....

GENERAL ELECTRIC CO. $27 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.2 billion; Market cap: $275.4 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.ge.com) plans to spin off its North American retail finance business as a separate company. This business, part of its GE Capital subsidiary, provides credit card loans through a variety of retailers, such as Wal-Mart and J.C. Penney. It also loans money directly to consumers. GE will hang on the international portion of the retail finance business. The spinoff is part of the company’s plan to cut GE Capital’s assets to half of what they were prior to the 2008 financial crisis....

C.R. BARD INC. $139 (New York symbol BCR; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 77.9 million; Market cap: $10.8 billion; Price-to-sales ratio: 3.7; Dividend yield: 0.6%; TSINetwork Rating: Above Average; www.crbard.com) makes vascular products, such as stents and catheters (29% of its 2012 sales); oncology products that detect and treat various types of cancer (27%); urology products, such as drainage and incontinence devices (26%); and surgical tools and other products (18%). The company mainly makes single-use, disposable products, so customers must continually buy new ones. As a result, Bard’s sales rose 20.6%, from $2.5 billion in 2008 to $3.0 billion in 2012. Earnings improved by 24.1%, from $455.4 million in 2008 to $565.3 million in 2012. The company is an aggressive buyer of its own stock, so per-share earnings jumped 48.0%, from $4.44 to $6.57.

New strategy sends stock higher

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GENERAL ELECTRIC CO. $27 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.2 billion; Market cap: $275.4 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.ge.com) plans to spin off its North American retail finance business as a separate company.

This business, part of its GE Capital subsidiary, provides credit card loans through a variety of retailers, such as Wal-Mart and J.C. Penney. It also loans money directly to consumers. GE will hang on the international portion of the retail finance business.

The spinoff is part of the company’s plan to cut GE Capital’s assets to half of what they were prior to the 2008 financial crisis.

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CHEVRON CORP. $122 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.9 billion; Market cap: $231.8 billion; Price-to-sales ratio: 1.0; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.chevron.com) has suspended work on its $10-billion Rosebank offshore oil project in the North Sea due to rising costs. Chevron owns 40% of this project. The company and its partners will make a decision on whether to proceed with Rosebank by late 2014.

Meanwhile, the company recently began pumping oil at its Papa-Terra offshore platform near Brazil. Chevron owns 37.5% of this operation, while Petroleo Brasileiro S.A. (New York symbol PBR) owns the remaining 62.5%.

Papa-Terra should produce 140,000 barrels a day by the end of 2014. Chevron’s share of 52,500 barrels is equal to 2% of its current daily output.

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SONY CORP. ADRs $19 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.0 billion; Market cap: $19.0 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.4%; TSINetwork Rating: Average; www.sony.com) now plans to make fewer than 20 movies a year, down from around 23 in previous years. That’s due to big losses on films like White House Down and After Earth.

Instead, the company plans to expand its better-performing television production business. Sony currently produces 38 series, including popular shows like Breaking Bad and The Blacklist.

Making TV shows is less expensive than feature films, which lowers risk and enhances potential profit.

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