price to sales ratio

WAL-MART STORES INC. $81 (New York symbol WMT; Conservative Growth Portfolio: Consumer sector; Shares outstanding: 3.3 billion; Market cap: $267.3 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.walmart.com) earned $3.9 billion in its fiscal 2014 third quarter, which ended October 31, 2013. That’s up 1.6% from $3.8 billion a year earlier. Per-share earnings gained 6.5%, to $1.14 from $1.07, on fewer shares outstanding.

Overall sales rose 1.7%, to $115.7 billion from $113.8 billion. Sales at the company’s U.S. stores, which supply 59% of the total, increased 2.4%. However, same-store sales fell 0.3%, as shoppers lowered their spending due to high unemployment and uncertainty over future health insurance premiums in the wake of the Affordable Care Act (or Obamacare).

However, sales at the international stores (29% of the total) gained 4.1%, excluding exchange rates. New locations in fast-growing markets like China and Africa should continue to offset slower sales in the U.S. Moreover, Wal-Mart could unlock some of its value by spinning off its Sam’s Club warehouse outlets (12%). This chain’s sales rose 1.1% in the latest quarter.

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TUPPERWARE BRANDS CORP. $92 (New York symbol TUP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 50.7 million; Market cap: $4.7 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.tupperwarebrands.com) gets about 70% of its sales by making high-quality products for the home, mainly plastic food and beverage containers. The remaining 30% comes from its beauty-products division, which makes a wide range of cosmetics, bath oils and fragrances. This division also makes related products like jewellery and bed linens.

The company’s main brands include Tupperware, Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics and Nuvo. International markets supply 90% of its sales.

Direct sales model is a huge asset

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Many investors look at real estate investment trusts (REITs) as proxies for bonds. Instead, we view REITs as companies that own and manage real estate.

When you invest in a REIT, the most important thing to look at is the quality of its holdings. This includes locations, tenants and expansion opportunities....

ENCANA CORP. $18 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 740.1 million; Market cap: $13.3 billion; Price-to-sales ratio: 2.2; Dividend yield: 1.6%; TSINetwork Rating: Average; www.encana.com) is cutting its reliance on natural gas, as rising shale gas production has cut prices from $11.50 U.S....

Oil prices have soared from around $18 U.S. a barrel in 1993 to around $100 U.S. today. However, new drilling technologies have made it easier to extract oil from hard-to-reach deposits, such as oil sands and shale rock formations. Rising production from these sources could hurt oil prices in the same way the shale gas boom has depressed natural gas prices (see Encana on Page 111).

Even so, these three oil producers continue to expand their oil sands operations....

TECK RESOURCES LTD. $27 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 576.3 million; Market cap: $15.6 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.3%; TSINetwork Rating: Average; www.teck.com) will contribute $2.9 billion to the Fort Hills oil sands project (see Suncor at left).

Teck mainly produces coal, copper and zinc, so Fort Hills will help diversify its operations....

SAPUTO INC. $49 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 194.2 million; Market cap: $9.5 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.9%; TSINetwork Rating: Average; www.saputo.com) has spent $2.4 billion on acquisitions in the past five years, mainly dairy producers in the U.S....

BOMBARDIER INC. (Toronto symbols BBD.A $4.62 and BBD.B $4.57; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.8 billion; Market cap: $8.2 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.2%; TSINetwork Rating: Average; www.bombardier.com) recently began test flights of its CSeries jet, which seats 100 to 150 passengers....

We continue to recommend that all investors aim to own two or more of Canada’s big five banks. In addition, conservative investors should diversify their Finance-sector holdings with Great-West and IGM. Investors who can accept more risk may also want to consider Home Capital (see box).

GREAT-WEST LIFECO INC....

HOME CAPITAL GROUP INC. $79 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.7 million; Market cap; $2.7 billion; Price-to-sales ratio: 2.2; Dividend yield: 1.4%; TSINetwork Rating: Average; www. homecapital.com) specializes in loans to borrowers who don’t meet the stricter standards of larger, traditional lenders, like banks.

Low interest rates continue to fuel mortgage demand....