price to sales ratio
TORONTO-DOMINION BANK $81 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 922.1 million; Market cap: $74.7 billion; Price-to-sales ratio: 2.4; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.td.com) is Canada’s second-largest bank, with $826.4 billion of assets.
In the three months ended April 30, 2013, TD’s earnings rose 5.8%, to $1.8 billion from $1.7 billion a year earlier. Because of more shares outstanding, earnings per share rose 4.4%, to $1.90 from $1.82.
Revenue increased 4.3%, to $6.0 billion from $5.75 billion. Revenue at TD’s Canadian retail banking division (which supplies 44% of the bank’s overall revenue) rose 1.5%, as its credit card holders spent more and demand rises for home mortgages and car loans.
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In the three months ended April 30, 2013, TD’s earnings rose 5.8%, to $1.8 billion from $1.7 billion a year earlier. Because of more shares outstanding, earnings per share rose 4.4%, to $1.90 from $1.82.
Revenue increased 4.3%, to $6.0 billion from $5.75 billion. Revenue at TD’s Canadian retail banking division (which supplies 44% of the bank’s overall revenue) rose 1.5%, as its credit card holders spent more and demand rises for home mortgages and car loans.
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ROYAL BANK OF CANADA $59 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.4 billion; Market cap: $82.6 billion; Price-to-sales ratio: 2.3; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.rbc.com) is Canada’s largest bank, with $867.5 billion of assets.
Royal recently paid $3.7 billion for Ally Financial’s Canadian operations. This business mainly provides car loans through over 1,600 dealerships across the country. It also offers no-fee savings accounts and consumer and business loans.
If you exclude unusual items, such as the cost of integrating this business, Royal earned $2.0 billion in the quarter ended April 30, 2013. That’s up 13.4% from $1.7 billion a year earlier. Earnings per share rose 14.2%, to $1.29 from $1.13, on fewer shares outstanding. The Ally business contributed $12 million to Royal’s latest earnings. As well, more of Royal’s borrowers are repaying their loans on time. The bank set aside $288 million for potential bad loans, down 17.2% from $348 million a year earlier.
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Royal recently paid $3.7 billion for Ally Financial’s Canadian operations. This business mainly provides car loans through over 1,600 dealerships across the country. It also offers no-fee savings accounts and consumer and business loans.
If you exclude unusual items, such as the cost of integrating this business, Royal earned $2.0 billion in the quarter ended April 30, 2013. That’s up 13.4% from $1.7 billion a year earlier. Earnings per share rose 14.2%, to $1.29 from $1.13, on fewer shares outstanding. The Ally business contributed $12 million to Royal’s latest earnings. As well, more of Royal’s borrowers are repaying their loans on time. The bank set aside $288 million for potential bad loans, down 17.2% from $348 million a year earlier.
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BANK OF NOVA SCOTIA $56 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $67.2 billion; Price-to-sales ratio: 2.4; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.scotiabank.com) is Canada’s third-largest bank, with assets of $754.2 billion.
The bank has recovered strongly from the 2008 financial crisis. Revenue rose 65.9%, from $11.9 billion in 2008 to $19.7 billion in 2012 (fiscal years end October 31). Earnings gained 98.6%, from $3.0 billion in 2008 to $6.0 billion in 2012. Due to more shares outstanding, earnings per share rose at a slower pace of 71.1%, from $3.05 to $5.22. Without a one-time gain on the sale of real estate, it would have earned $4.61 a share in 2012.
Much of this growth is due to acquisitions. In the past six years, Bank of Nova Scotia has spent over $14 billion buying smaller financial services firms. It purchased most of these assets from banks that wanted to exit certain markets, so it probably got many of them at bargain prices.
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The bank has recovered strongly from the 2008 financial crisis. Revenue rose 65.9%, from $11.9 billion in 2008 to $19.7 billion in 2012 (fiscal years end October 31). Earnings gained 98.6%, from $3.0 billion in 2008 to $6.0 billion in 2012. Due to more shares outstanding, earnings per share rose at a slower pace of 71.1%, from $3.05 to $5.22. Without a one-time gain on the sale of real estate, it would have earned $4.61 a share in 2012.
Much of this growth is due to acquisitions. In the past six years, Bank of Nova Scotia has spent over $14 billion buying smaller financial services firms. It purchased most of these assets from banks that wanted to exit certain markets, so it probably got many of them at bargain prices.
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VISA INC. $183 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 792.0 million; Market cap: $144.9 billion; Price-to-sales ratio: 10.9; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.visa.com) operates the world’s largest electronic payments network. The company processes credit, debit, prepaid and commercial payments under the Visa, Visa Electron, Interlink and PLUS brands.
Visa gets most of its revenue from fees it charges card issuers and merchants for using its network. These fees are based on payment volume, transactions processed and other factors. The responsibility for evaluating customer creditworthiness and collecting payments lies with the banks that issue the cards, not with Visa.
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Visa gets most of its revenue from fees it charges card issuers and merchants for using its network. These fees are based on payment volume, transactions processed and other factors. The responsibility for evaluating customer creditworthiness and collecting payments lies with the banks that issue the cards, not with Visa.
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PFIZER INC. $28 (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 7.1 billion; Market cap: $198.8 billion; Price-to-sales ratio: 3.6; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.pfizer.com) has completed its plan to hand out shares in its 80.2%-owned animalhealth subsidiary to its own shareholders. This business, ZOETIS INC. $31 (New York symbol ZTS, Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 500.0 million; Market cap: $15.5 billion; Price-to-sales ratio: 3.6; Dividend yield: 0.8%; TSINetwork Rating: Average; www.zoetis.com) makes drugs and vaccines for livestock and pets.
Pfizer set the exchange ratio at 0.9898 of a Zoetis share for each Pfizer share tendered. Due to much stronger-than-expected demand for Zoetis stock, Pfizer will accept less than half of the shares tendered to the offer.
Zoetis has long-term appeal. The company spends around 8% of its sales on research, which should help it profit as developing countries like China raise more livestock for food. However, the stock trades at a high 22.0 times Zoetis’s forecast 2013 earnings of $1.41 a share. Zoetis pays a quarterly dividend of $0.065 a share, for a 0.8% annualized yield.
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Pfizer set the exchange ratio at 0.9898 of a Zoetis share for each Pfizer share tendered. Due to much stronger-than-expected demand for Zoetis stock, Pfizer will accept less than half of the shares tendered to the offer.
Zoetis has long-term appeal. The company spends around 8% of its sales on research, which should help it profit as developing countries like China raise more livestock for food. However, the stock trades at a high 22.0 times Zoetis’s forecast 2013 earnings of $1.41 a share. Zoetis pays a quarterly dividend of $0.065 a share, for a 0.8% annualized yield.
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HONDA MOTOR CO. LTD. ADRs $36 (New York symbol HMC; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.8 billion; Market cap: $64.8 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.4%; TSINetwork Rating: Above Average; www.honda.com) sold 255,540 cars in China in the first five months of 2013. That’s down 2.4% from the same period a year earlier. Chinese consumers continue to boycott Japanese products because of a dispute between the two countries over several small islands in the East China Sea.
The company hopes to spur sales by launching 12 new models in China by 2015. These cars will have a number of new features, including better pollution control and safety equipment. In addition, Honda will move some of its research activities to China and buy more parts from local suppliers.
Honda is a buy.
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The company hopes to spur sales by launching 12 new models in China by 2015. These cars will have a number of new features, including better pollution control and safety equipment. In addition, Honda will move some of its research activities to China and buy more parts from local suppliers.
Honda is a buy.
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ALLIANT ENERGY CORP. $49 (New York symbol LNT; Income Portfolio, Utilities sector; Shares outstanding: 119.6 million; Market cap: $5.9 billion; Price-to-sales ratio: 1.7; Dividend yield: 3.8%; TSINetwork Rating: Average; www.alliantenergy.com) sells electricity and natural gas to 1.4 million residential and business customers in Wisconsin, Iowa and Minnesota.
Like Ameren (see left), Alliant benefited from colder- than-normal winter weather. The company earned $79.3 million, or $0.72 a share, in the first quarter of 2013, up 45.5% from $54.5 million, or $0.50 a share, a year earlier. Revenue rose 12.3%, to $859.6 million from $765.7 million.
Recent rate hikes in Iowa will help offset lower rates in Wisconsin. That should push up Alliant’s earnings to $3.30 a share in 2013 from $3.05 in 2012. The stock trades at a reasonable 14.8 times that estimate. The $1.88 dividend yields 3.8%.
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Like Ameren (see left), Alliant benefited from colder- than-normal winter weather. The company earned $79.3 million, or $0.72 a share, in the first quarter of 2013, up 45.5% from $54.5 million, or $0.50 a share, a year earlier. Revenue rose 12.3%, to $859.6 million from $765.7 million.
Recent rate hikes in Iowa will help offset lower rates in Wisconsin. That should push up Alliant’s earnings to $3.30 a share in 2013 from $3.05 in 2012. The stock trades at a reasonable 14.8 times that estimate. The $1.88 dividend yields 3.8%.
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AMEREN CORP. $34 (New York symbol AEE; Income Portfolio, Utilities sector; Shares outstanding: 242.6 million; Market cap: $8.2 billion; Price-to-sales ratio: 1.2; Dividend yield: 4.7%; TSINetwork Rating: Average; www.ameren.com) sells power and natural gas to 3.3 million customers in Illinois and Missouri.
The company is selling its energy marketing business and five of its non-regulated coal-fired power plants in Illinois to Dynegy Inc. (New York symbol DYN). It aims to complete the sale in the fourth quarter of 2013.
Ameren’s unregulated power plants supply 20% of its revenue. However, power demand has fallen in Illinois, and Ameren is paying more to comply with stricter environmental regulations. That has cut these plants’profits.
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The company is selling its energy marketing business and five of its non-regulated coal-fired power plants in Illinois to Dynegy Inc. (New York symbol DYN). It aims to complete the sale in the fourth quarter of 2013.
Ameren’s unregulated power plants supply 20% of its revenue. However, power demand has fallen in Illinois, and Ameren is paying more to comply with stricter environmental regulations. That has cut these plants’profits.
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NCR CORP. $33 (New York symbol NCR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 164.4 million; Market cap: $5.4 billion; Price-to-sales ratio: 0.9; No dividends paid; TSINetwork Rating: Average; www.ncr.com) is a leading maker of automated teller machines (ATMs), checkout scanners, cash registers and self-serve kiosks.
In February 2013, the company paid $791 million for Israel-based Retalix, whose software helps retailers manage their sales and track inventories. Retailers with a combined 70,000 locations in over 50 countries use Retalix’s products. NCR feels Retalix’s expertise will improve its point-of-sale terminals and self-serve kiosks.
In the three months ended March 31, 2013, Retalix contributed $50 million to NCR’s revenue. That helped push up the total by 13.3% in the latest quarter, to $1.4 billion from $1.2 billion a year earlier. The acquisition should add $255 million to the company’s full-year revenue.
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In February 2013, the company paid $791 million for Israel-based Retalix, whose software helps retailers manage their sales and track inventories. Retailers with a combined 70,000 locations in over 50 countries use Retalix’s products. NCR feels Retalix’s expertise will improve its point-of-sale terminals and self-serve kiosks.
In the three months ended March 31, 2013, Retalix contributed $50 million to NCR’s revenue. That helped push up the total by 13.3% in the latest quarter, to $1.4 billion from $1.2 billion a year earlier. The acquisition should add $255 million to the company’s full-year revenue.
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STANLEY BLACK & DECKER INC. $77 (New York symbol SWK; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 161.9 million; Market cap: $12.5 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.5%; TSINetwork Rating: Average; www.stanleyblackanddecker.com) earned $163.1 million in the first quarter of 2013, down 1.3% from $165.2 million a year earlier.
Due to fewer shares outstanding, earnings per share rose 5.1% to $1.03. These figures exclude costs to integrate its $826.4-million purchase of Infastech, a Hong Kong-based fastener maker that serves automotive, electronic, aerospace and construction clients. Infastech should add $0.20 a share to Stanley’s yearly earnings.
Sales rose 2.5%, to $2.5 billion from $2.4 billion. Infastech’s contribution offset weaker sales of tools and other products and the negative impact of exchange rates.
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Due to fewer shares outstanding, earnings per share rose 5.1% to $1.03. These figures exclude costs to integrate its $826.4-million purchase of Infastech, a Hong Kong-based fastener maker that serves automotive, electronic, aerospace and construction clients. Infastech should add $0.20 a share to Stanley’s yearly earnings.
Sales rose 2.5%, to $2.5 billion from $2.4 billion. Infastech’s contribution offset weaker sales of tools and other products and the negative impact of exchange rates.
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