price to sales ratio
MANITOBA TELECOM SERVICES INC. $32 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 67.0 million; Market cap: $2.1 billion; Price-to-sales ratio: 1.2; Dividend yield: 5.3%; TSINetwork Rating: Average; www.mtsallstream.com) gets around 55% of its revenue from its 1.3 million telephone and wireless customers in Manitoba.
The remaining 45% comes from its Allstream division, which sells integrated telephone, Internet and other communication services to businesses across Canada. Manitoba Telecom is now conducting a strategic review of Allstream. This could lead to a sale of some or all of this business.
Allstream is profitable, but while it accounts for almost half of Manitoba Telecom’s revenue, it only contributes 18% of the company’s operating earnings. So selling the division would let Manitoba Telecom expand its more profitable operations.
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The remaining 45% comes from its Allstream division, which sells integrated telephone, Internet and other communication services to businesses across Canada. Manitoba Telecom is now conducting a strategic review of Allstream. This could lead to a sale of some or all of this business.
Allstream is profitable, but while it accounts for almost half of Manitoba Telecom’s revenue, it only contributes 18% of the company’s operating earnings. So selling the division would let Manitoba Telecom expand its more profitable operations.
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TELUS CORP. (Toronto symbols T $68 and T.A $68; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 326.0 million; Market cap: $22.2 billion; Price-to-sales ratio: 2.0; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.telus.com) has received court approval for its plan to convert its 151 million non-voting class A shares into regular common shares (which have one vote each) on a one-for-one basis.
The company converted the shares in the U.S. on February 4, 2013. The move dilutes common shareholders’ voting power, but it lets the common shares trade on the New York Stock Exchange (symbol TU). Previously, only the non-voting shares traded on New York. The change should make the common shares more liquid. Telus will make the conversion in Canada on February 11, 2013.
Telus A stock is a buy.
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The company converted the shares in the U.S. on February 4, 2013. The move dilutes common shareholders’ voting power, but it lets the common shares trade on the New York Stock Exchange (symbol TU). Previously, only the non-voting shares traded on New York. The change should make the common shares more liquid. Telus will make the conversion in Canada on February 11, 2013.
Telus A stock is a buy.
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RIOCAN REAL ESTATE INVESTMENT TRUST $27 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 299.0 million; Market cap: $8.1 billion; Price-to-sales ratio: 5.3; Dividend yield: 5.2%; TSINetwork Rating: Average; www.riocan.com) has agreed to buy a mall in Oakville, Ontario, plus 50% of another mall in Burlington, Ontario. Right now, Primaris Retail Real Estate Investment Trust (Toronto symbol PMZ.UN) owns these malls. RioCan will buy them from a consortium that has launched a friendly takeover for Primaris. The $362-million price is equal to 4% of RioCan’s market cap.
The new malls will give RioCan more flexibility to attract tenants with leases that include space in its other Toronto-area malls.
RioCan is a buy.
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The new malls will give RioCan more flexibility to attract tenants with leases that include space in its other Toronto-area malls.
RioCan is a buy.
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BLACKBERRY $16 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.0 million; Market cap: $8.4 billion; Price-to-sales ratio: 0.7; No dividends paid; TSINetwork Rating: Above Average; www.blackberry.com) is the new name of Research in Motion Ltd. (old symbol RIM). (Note: The company’s legal name will remain Research in Motion until shareholders approve the name change at the next annual meeting.)
The company recently launched two smartphones powered by its new BlackBerry 10 software: the BlackBerry Z10 uses a 4.2-inch touch-screen interface, while the BlackBerry Q10 features a smaller screen and a physical keyboard.
BlackBerry has already started selling the Z10 in Canada, the U.K. and other countries. The company will launch the new phone in the U.S. in March. It should launch the Q10 in April.
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The company recently launched two smartphones powered by its new BlackBerry 10 software: the BlackBerry Z10 uses a 4.2-inch touch-screen interface, while the BlackBerry Q10 features a smaller screen and a physical keyboard.
BlackBerry has already started selling the Z10 in Canada, the U.K. and other countries. The company will launch the new phone in the U.S. in March. It should launch the Q10 in April.
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TIM HORTONS INC. $49 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 154.5 million; Market cap: $7.6 billion; Price-to-sales ratio: 2.5; Dividend yield: 1.7%; TSINetwork Rating: Average; www.timhortons.com) is the largest fast-food company in Canada, with 3,365 outlets that mainly serve coffee and donuts. However, the company is attracting new customers with other foods, such as sandwiches and soups.
Tim Hortons’ success in Canada is helping it expand in other countries.
For example, many Tim Hortons outlets now sell ice cream through the company’s alliance with U.S.-based Cold Stone Creamery. That helps them attract more customers in the afternoon and evening. As part of this deal, Cold Stone sells Tim Hortons coffee and other products in its upscale ice cream parlours. In addition, the company continues to build new stores in the U.S.; it now has 755 outlets in that country. Most of Tim Hortons’ U.S. stores are in states along the Canadian border, where they can attract cross-border shoppers.
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Tim Hortons’ success in Canada is helping it expand in other countries.
For example, many Tim Hortons outlets now sell ice cream through the company’s alliance with U.S.-based Cold Stone Creamery. That helps them attract more customers in the afternoon and evening. As part of this deal, Cold Stone sells Tim Hortons coffee and other products in its upscale ice cream parlours. In addition, the company continues to build new stores in the U.S.; it now has 755 outlets in that country. Most of Tim Hortons’ U.S. stores are in states along the Canadian border, where they can attract cross-border shoppers.
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MOLSON COORS CANADA INC. (Toronto symbols TPX.A $44 and TPX.B $44; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 181.2 million; Market cap: $8.0 billion; Price-to-sales ratio: 2.3; Dividend yield: 2.9%; TSINetwork Rating: Average; www.molsoncoors.com) continues to benefit from the 2005 merger of Canada’s Molson brewing operations with those of U.S.-based Coors. The combined company later merged its U.S. business with rival Miller Brewing Company.
The ongoing savings from these mergers has helped Molson Coors, which is the world’s seventhlargest brewer by volume, to compete with larger multinational brewers.
Molson Coors now aims to expand in emerging markets, where beer sales are growing faster than its main markets of North America and the U.K. That’s why it paid $3.4 billion for StarBev LP in June 2012. StarBev owns nine breweries in Central and Eastern Europe (all amounts except share prices and market cap in U.S. dollars).
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The ongoing savings from these mergers has helped Molson Coors, which is the world’s seventhlargest brewer by volume, to compete with larger multinational brewers.
Molson Coors now aims to expand in emerging markets, where beer sales are growing faster than its main markets of North America and the U.K. That’s why it paid $3.4 billion for StarBev LP in June 2012. StarBev owns nine breweries in Central and Eastern Europe (all amounts except share prices and market cap in U.S. dollars).
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THOMSON REUTERS CORP. $31 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 826.5 million; Market cap: $25.6 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.thomsonreuters.com) gets 57% of its revenue and 50% of its earnings by selling news and information to professionals in the banking industry. It also sells specialized information products to clients in the legal, accounting and scientific research fields.
The company was already a well-established specialized information provider before it merged with the Reuters news agency in 2008. That deal gave the combined company even more information to sell. It also cut its reliance on North America. Thomson Reuters now gets 57% of its revenue from the Americas, followed by Europe (31%) and Asia (12%).
In addition, the Reuters merger helped the company launch its new Eikon terminals, which deliver real-time news and financial data to securities traders and portfolio managers. Even as the uncertain global economy prompted banks and other financial service businesses to scale back their spending, the number of Eikon users rose 35% in the third quarter of 2012 from the second quarter.
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The company was already a well-established specialized information provider before it merged with the Reuters news agency in 2008. That deal gave the combined company even more information to sell. It also cut its reliance on North America. Thomson Reuters now gets 57% of its revenue from the Americas, followed by Europe (31%) and Asia (12%).
In addition, the Reuters merger helped the company launch its new Eikon terminals, which deliver real-time news and financial data to securities traders and portfolio managers. Even as the uncertain global economy prompted banks and other financial service businesses to scale back their spending, the number of Eikon users rose 35% in the third quarter of 2012 from the second quarter.
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CGI GROUP INC. $27 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 308.0 million; Market cap: $8.3 billion; Price-to-sales ratio: 1.3; No dividends paid; TSINetwork Rating: Extra Risk; www. cgi.com) continues to benefit from its $2.7-billion purchase of Logica plc in August 2012. This U.K.-based firm provides computer outsourcing services in 36 countries.
Thanks to these new operations, CGI’s revenue in its fiscal 2013 first quarter, which ended December 31, 2012, jumped 145.4% to $2.5 billion from $1.0 billion a year earlier. If you exclude integration costs and other unusual items, earnings rose 29.4%, to $137.8 million from $106.5 million. Earnings per share rose 10.0%, to $0.44 from $0.40, on more shares outstanding.
CGI booked $2.8 billion of new contracts during the quarter, up 104.4% from $1.4 billion a year earlier. Its order backlog is now $18.3 billion.
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Thanks to these new operations, CGI’s revenue in its fiscal 2013 first quarter, which ended December 31, 2012, jumped 145.4% to $2.5 billion from $1.0 billion a year earlier. If you exclude integration costs and other unusual items, earnings rose 29.4%, to $137.8 million from $106.5 million. Earnings per share rose 10.0%, to $0.44 from $0.40, on more shares outstanding.
CGI booked $2.8 billion of new contracts during the quarter, up 104.4% from $1.4 billion a year earlier. Its order backlog is now $18.3 billion.
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METRO INC. $64 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 96.2 million; Market cap: $6.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.6%; TSINetwork Rating: Average; www.metro.ca) is Canada’s third-largest supermarket operator after Loblaw (see page 21) and Sobeys. The company has about 600 supermarkets in Quebec and Ontario. It also operates 260 drugstores under the Brunet, The Pharmacy and Drug Basics banners.
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Couche-Tard sale brings a windfall
The company recently sold roughly half of its stake in Alimentation Couche-Tard Inc. (Toronto symbol ATD.B), which operates convenience stores in North America and Norway. (Couche-Tard is a recommendation of Stock Pickers Digest, our newsletter that focuses on aggressive investing.) That left Metro with a 5.7% economic interest and a 17.0% voting interest in Couche-Tard....
McDonald’s continues to benefit from its ongoing plan to serve better food and upgrade its restaurants. Since 2003, this strategy has helped the company increase its annual sales by 3% to 5%. Its yearly profits have grown at a much faster pace of 6% to 7%.
These gains may seem modest compared to fast-growing technology companies, like Google....
These gains may seem modest compared to fast-growing technology companies, like Google....