price to sales ratio
CANADIAN TIRE CORP. $70 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.1 million; Market cap: $5.7 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.canadiantire.ca) operates 490 Canadian Tire stores, which specialize in automotive, household and sporting goods....
AGRIUM INC. $114 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 149.4 million; Market cap: $17.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.8%; TSINetwork Rating: Average; www.agrium.com) has soared 60% in the past year. That’s mainly because activist investment firm Jana Partners wants Agrium to spin off its retail business as a separate company. Jana owns 6% of Agrium’s shares.
The retail division has 1,250 stores in North America, South America and Australia that sell seed, fertilizer and other products to farmers. These outlets supply 60% of Agrium’s revenue. The remaining 40% mainly comes from making fertilizers from natural gas.
The retail division has 1,250 stores in North America, South America and Australia that sell seed, fertilizer and other products to farmers. These outlets supply 60% of Agrium’s revenue. The remaining 40% mainly comes from making fertilizers from natural gas.
Retail stores add stability
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IMPERIAL OIL LTD. $44 (Toronto symbol IMO; Conservative Growth Portfolio; Resources sector; Shares outstanding: 847.6 million; Market cap: $37.3 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.1%; TSINetwork Rating: Average; www.imperialoil.ca) now estimates that the first phase of its 71%-owned Kearl oil sands project will cost $12.9 billion. That’s up 18.3% from its earlier forecast of $10.9 billion. Exxon Mobil Corp. (New York symbol XOM) owns the remaining 29% of Kearl. Exxon also owns 69.6% of Imperial.
Shipping delays and unusually cold winter weather have slowed Kearl’s development and boosted its costs. Imperial now aims to start production by the end of March 2013.
Kearl’s first phase will produce 110,000 barrels a day (Imperial’s share is 78,100 barrels) by the end of 2013. Kearl’s second phase, which will cost $8.9 billion, will add a further 78,100 barrels to Imperial’s daily production by late 2015. To put these figures in context, the company produced an average of 282,000 barrels of oil equivalent a day in 2012.
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Shipping delays and unusually cold winter weather have slowed Kearl’s development and boosted its costs. Imperial now aims to start production by the end of March 2013.
Kearl’s first phase will produce 110,000 barrels a day (Imperial’s share is 78,100 barrels) by the end of 2013. Kearl’s second phase, which will cost $8.9 billion, will add a further 78,100 barrels to Imperial’s daily production by late 2015. To put these figures in context, the company produced an average of 282,000 barrels of oil equivalent a day in 2012.
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CANADA BREAD CO. LTD. $52 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.canadabread.ca) is closing its bakeries in Grand Falls, New Brunswick, and Edmonton, Alberta. It will shift production from these facilities to other plants.
The company did not say how much these closures will save it. However, it expects to pay $6.3 million in severance and other related costs. That’s equal to 26% of the $24.2 million, or $0.95 a share, that Canada Bread earned in the three months ended September 30, 2012.
Canada Bread is still a hold.
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The company did not say how much these closures will save it. However, it expects to pay $6.3 million in severance and other related costs. That’s equal to 26% of the $24.2 million, or $0.95 a share, that Canada Bread earned in the three months ended September 30, 2012.
Canada Bread is still a hold.
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TRANSCONTINENTAL INC. $12 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 78.2 million; Market cap: $938.4 million; Price-to-sales ratio: 0.4; Dividend yield: 4.8%; TSINetwork Rating: Average; www.tctranscontinental.com) has paid an undisclosed sum for privately held Groupe Modulo, which publishes Frenchlanguage textbooks for schools and universities across Canada.
Many traditional book publishers have suffered due to rising competition from cheaper e-books. However, specialized textbooks are still highly profitable, and the purchase looks like a nice fit with Transcontinental’s current textbook business: it will expand the company’s catalogue of French-language titles to 11,000 from 8,000.
Moreover, adding Groupe Modulo’s high-quality titles would be a plus for Transcontinental if it decides to expand its own electronic-textbook business.
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Many traditional book publishers have suffered due to rising competition from cheaper e-books. However, specialized textbooks are still highly profitable, and the purchase looks like a nice fit with Transcontinental’s current textbook business: it will expand the company’s catalogue of French-language titles to 11,000 from 8,000.
Moreover, adding Groupe Modulo’s high-quality titles would be a plus for Transcontinental if it decides to expand its own electronic-textbook business.
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CAE INC. $11 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 259.2 million; Market cap: $2.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.8%; TSINetwork Rating: Average; www.cae.com) recently sold seven flight simulators and related equipment....
TRANSCANADA CORP. $49 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 705.0 million; Market cap: $34.5 billion; Price-to-sales ratio: 4.0; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.transcanada.com) has received approval from Nebraska’s governor for its plan to reroute the proposed Keystone XL pipeline around environmentally sensitive areas of the state.
The company is currently building Keystone XL in sections. When completed, it would pump oil from Alberta to the U.S. Gulf Coast. The final project still needs various approvals, including from the U.S. State Department. Even so, Nebraska’s consent makes Keystone XL’s approval more likely.
TransCanada is a buy.
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The company is currently building Keystone XL in sections. When completed, it would pump oil from Alberta to the U.S. Gulf Coast. The final project still needs various approvals, including from the U.S. State Department. Even so, Nebraska’s consent makes Keystone XL’s approval more likely.
TransCanada is a buy.
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CANADIAN PACIFIC RAILWAY LTD. $113 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 173.9 million; Market cap: $19.7 billion; Price-to-sales ratio: 3.5; Dividend yield: 1.2%; TSINetwork Rating: Above Average; www.cpr.ca) is improving its efficiency with new locomotives and software that optimizes train loads and speeds.
CP’s earnings fell 15.1% in 2012, to $484 million, or $2.79 a share. In 2011, the company earned $570 million, or $3.34 a share. However, if you disregard costs related to CP’s recently announced plan to cut 25% of its workforce, as well as writedowns of locomotives and other assets, its earnings per share would have risen 37.8%, to $4.34 from $3.15. Revenue rose 10.0%, to $5.7 billion from $5.2 billion.
The company’s operating ratio worsened to 83.3% from 81.3% a year ago. However, its restructuring should cut this figure to around 70% in 2013.
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CP’s earnings fell 15.1% in 2012, to $484 million, or $2.79 a share. In 2011, the company earned $570 million, or $3.34 a share. However, if you disregard costs related to CP’s recently announced plan to cut 25% of its workforce, as well as writedowns of locomotives and other assets, its earnings per share would have risen 37.8%, to $4.34 from $3.15. Revenue rose 10.0%, to $5.7 billion from $5.2 billion.
The company’s operating ratio worsened to 83.3% from 81.3% a year ago. However, its restructuring should cut this figure to around 70% in 2013.
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CANADIAN NATIONAL RAILWAY CO. $96 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 428.4 million; Market cap: $41.1 billion; Price-to-sales ratio: 4.0; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.cn.ca) earned $2.5 billion in 2012. That’s up 11.9% from $2.2 billion in 2011. The company spent $1.4 billion on share buybacks during the year. Because of fewer shares outstanding, earnings per share rose 15.9%, to $5.61 from $4.84.
Revenue rose 9.9%, to $9.9 billion from $9.0 billion. The company continues to benefit from rising trade between North America and Asia. CN also raised its freight rates and fuel surcharges.
CN’s operating costs rose 9% in 2012, mainly due to higher labour and fuel expenses. Even so, CN’s operating ratio improved to 62.9% from 63.5%. (Operating ratio is calculated by dividing a company’s regular operating costs by its revenue. The lower the ratio, the better.)
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Revenue rose 9.9%, to $9.9 billion from $9.0 billion. The company continues to benefit from rising trade between North America and Asia. CN also raised its freight rates and fuel surcharges.
CN’s operating costs rose 9% in 2012, mainly due to higher labour and fuel expenses. Even so, CN’s operating ratio improved to 62.9% from 63.5%. (Operating ratio is calculated by dividing a company’s regular operating costs by its revenue. The lower the ratio, the better.)
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LOBLAW COMPANIES LTD. $41 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 281.5 million; Market cap: $11.5 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.loblaw.ca) is Canada’s largest food retailer, with roughly 1,000 stores. George Weston Ltd. (Toronto symbol WN) owns 63% of the company’s shares.
Loblaw has announced a plan to form a real estate investment trust (REIT) that will hold most of its real estate assets.
Right now, the company owns 47 million square feet of real estate with a market value of $9 billion to $10 billion. Loblaw will transfer 35 million square feet of these properties—including stores, warehouses and office buildings—to the REIT. Loblaw will then rent these properties from this new trust. After the company closes this transaction in mid- 2013, it will sell units of the REIT to the public. Loblaw will hang on to a majority stake.
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Loblaw has announced a plan to form a real estate investment trust (REIT) that will hold most of its real estate assets.
Right now, the company owns 47 million square feet of real estate with a market value of $9 billion to $10 billion. Loblaw will transfer 35 million square feet of these properties—including stores, warehouses and office buildings—to the REIT. Loblaw will then rent these properties from this new trust. After the company closes this transaction in mid- 2013, it will sell units of the REIT to the public. Loblaw will hang on to a majority stake.
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