price to sales ratio
WINDSTREAM CORP. $8.25 (Nasdaq symbol WIN; Income Portfolio, Utilities sector; Shares outstanding: 592.8 million; Market cap: $4.9 billion; Price-to-sales ratio: 0.8; Dividend yield: 12.1%; TSINetwork Rating: Average; www.windstream.com) provides telephone and other communication services to 4.2 million clients, mainly in rural areas in the U.S.
In November 2011, Windstream bought PAETEC Holding Corp., which sells telecommunication services to businesses in 46 states. The company issued $842 million in stock to PAETEC shareholders and assumed $1.6 billion of PAETEC’s debt.
The deal raised Windstream’s long-term debt to $8.1 billion, or a high 1.7 times its market cap. It also added more business and high-speed Internet clients. These users now supply 71% of Windstream’s sales.
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In November 2011, Windstream bought PAETEC Holding Corp., which sells telecommunication services to businesses in 46 states. The company issued $842 million in stock to PAETEC shareholders and assumed $1.6 billion of PAETEC’s debt.
The deal raised Windstream’s long-term debt to $8.1 billion, or a high 1.7 times its market cap. It also added more business and high-speed Internet clients. These users now supply 71% of Windstream’s sales.
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VERIZON COMMUNICATIONS INC. $50 (New York symbol VZ, Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 2.9 billion; Market cap: $145.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 4.1%; TSINetwork Rating: Average; www.verizon.com) gets 66% of its revenue from its 98.9 million wireless subscribers in the U.S. It also has 22.2 million phone and Internet customers.
Wireless buyout would be expensive
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AT&T INC. $36 (New York symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 5.4 billion; Market cap: $194.4 billion; Price-to-sales ratio: 1.5; Dividend yield: 5.0%; TSINetwork Rating: Average; www.att.com) is the largest wireless service provider in the U.S., with 107.3 million subscribers. This business supplies 53% of AT&T’s revenue and 74% of its earnings.
The wireline division, which sells phone services, television packages and high-speed Internet access to 37.4 million customers, accounts for most of AT&T’s remaining revenue and earnings.
Due to the recession and weaker demand for regular phone services, AT&T’s revenue fell slightly from $123.4 billion in 2008 to $122.5 billion in 2009. However, revenue turned around and climbed to $127.4 billion in 2012.
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The wireline division, which sells phone services, television packages and high-speed Internet access to 37.4 million customers, accounts for most of AT&T’s remaining revenue and earnings.
Due to the recession and weaker demand for regular phone services, AT&T’s revenue fell slightly from $123.4 billion in 2008 to $122.5 billion in 2009. However, revenue turned around and climbed to $127.4 billion in 2012.
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We made CP Rail (see box at right) our “Stock of the Year” for 2012 because we felt its earnings would jump if it cut costs and made better use of its trains. A U.S.-based activist investor agreed with us and brought in CN Rail’s former chief executive officer, Hunter Harrison, who helped make CN North America’s most efficient railroad.
Some investors feel that a stronger CP will hurt CN....
Some investors feel that a stronger CP will hurt CN....
CANADIAN PACIFIC RAILWAY LTD. $132 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 174.7 million; Market cap: $23.1 billion; Price-to-sales ratio: 4.0; Dividend yield: 1.1%; TSINetwork Rating: Above Average; www.cpr.ca) continues to benefit from a major restructuring plan, which includes new locomotives, better tracks and software that optimizes train loads and speeds.
In the first three months of 2013, CP’s earnings jumped 52.8%, to $217 million, or $1.24 a share....
In the first three months of 2013, CP’s earnings jumped 52.8%, to $217 million, or $1.24 a share....
Slowing industrial activity in North America and China has pushed down oil demand. At the same time, rising shale oil production from North Dakota’s Bakken region has increased inventories. Both of these factors have weighed on prices.
Low prices are a mixed blessing for these three integrated oil companies....
Low prices are a mixed blessing for these three integrated oil companies....
POTASH CORP. OF SASKATCHEWAN $44 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 865.1 million; Market cap: $38.1 billion; Price-to-sales ratio: 4.7; Dividend yield: 2.6%; TSINetwork Rating: Average; www.potashcorp.com) no longer aims to buy control of Israel Chemicals, which produces potash from minerals it extracts from the Dead Sea....
MAPLE LEAF FOODS INC. $13 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.0 million; Market cap: $1.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.2%; TSINetwork Rating: Average; www.mapleleaf.ca) recently increased the prices of its meat products to offset rising costs of animal feed after last year’s drought in the U.S....
IGM FINANCIAL INC. $47 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 251.8 million; Market cap: $11.8 billion; Price-to-sales ratio: 4.6; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.igmfinancial.com) is Canada’s largest independent mutual fund company, with $125.8 billion of assets under management....
Bombardier continues to win orders for its new CSeries passenger jets, which are 20% more fuel efficient than current models. CAE should also benefit from strong CSeries sales, because it makes simulators that train pilots to fly the new planes. We see both stocks as buys, but CAE is the better choice for conservative investors.
BOMBARDIER INC. (Toronto symbols BBD.A $4.25 and BBD.B $4.23; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.8 billion; Market cap: $7.6 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.bombardier.com) had commitments in place for 382 CSeries planes, including 148 firm orders, at the end of 2012....
BOMBARDIER INC. (Toronto symbols BBD.A $4.25 and BBD.B $4.23; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.8 billion; Market cap: $7.6 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.bombardier.com) had commitments in place for 382 CSeries planes, including 148 firm orders, at the end of 2012....