price to sales ratio
APACHE CORP. $80 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 391.3 million; Market cap: $31.3 billion; Price-to-sales ratio: 1.9; Dividend yield: 0.9%; TSINetwork Rating: Average; www.apachecorp.com) had to write down some of its Canadian properties by $539 million due to low natural gas prices in the quarter ended September 30, 2012. If you disregard that and other unusual items, Apache would have earned $861 million, or $2.16 a share. That’s down 25.8% from $1.2 billion, or $2.95 a share, a year earlier. Revenue declined 3.4%, to $4.2 billion from $4.3 billion. Half of Apache’s production is gas, and gas prices fell 15.3% from a year earlier. Oil prices rose 0.9%.
The company is now producing more higher-priced oil and natural gas liquids, which cuts its exposure to low gas prices. As well, it produces half of its oil and gas in international markets, where prices are generally higher than in North America.
Apache is a buy.
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The company is now producing more higher-priced oil and natural gas liquids, which cuts its exposure to low gas prices. As well, it produces half of its oil and gas in international markets, where prices are generally higher than in North America.
Apache is a buy.
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YUM! BRANDS INC. $68 (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 451.8 million; Market cap: $30.7 billion; Price-to-sales ratio: 2.3; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.yum.com) has 36,087 fast-food restaurants in over 110 countries. Its main banners include KFC (fried chicken), Pizza Hut and Taco Bell (Mexican food).
In the quarter ended September 8, 2012, Yum’s earnings rose 23.0%, to $471 million from $383 million a year earlier. The company spent $414 million on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share rose 25.0%, to $1.00 from $0.80. Without unusual items, such as losses on sales of Pizza Hut restaurants in the U.K. to franchisees, earnings per share would have risen 19.3%, to $0.99 from $0.83. Sales rose 9.0%, to $3.6 billion from $3.3 billion a year earlier.
However, Yum expects its same-store sales in China to fall 4% in the fourth quarter; China accounts for 50% of its sales and 45% of its earnings.
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In the quarter ended September 8, 2012, Yum’s earnings rose 23.0%, to $471 million from $383 million a year earlier. The company spent $414 million on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share rose 25.0%, to $1.00 from $0.80. Without unusual items, such as losses on sales of Pizza Hut restaurants in the U.K. to franchisees, earnings per share would have risen 19.3%, to $0.99 from $0.83. Sales rose 9.0%, to $3.6 billion from $3.3 billion a year earlier.
However, Yum expects its same-store sales in China to fall 4% in the fourth quarter; China accounts for 50% of its sales and 45% of its earnings.
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MCDONALD’S CORP. $90 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.0 billion; Market cap: $90.0 billion; Price-to-sales ratio: 3.3; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.mcdonalds.com) operates 34,000 restaurants in 119 countries. Two-thirds of its sales come from outside the U.S. It serves a variety of foods, but is best known for its hamburgers and french fries.
McDonald’s continues to benefit from strong demand for its Dollar Menu, which features items like breakfast sandwiches and coffee for just $1. It is also seeing strong sales of new premium items and foods that it sells on a limited-time basis.
The company’s same-store sales rose 2.4% in November 2012. Most of these gains came from the U.S., where same-store sales increased 2.5%. Same-store sales rose 1.4% in Europe, as gains in the U.K. and Russia offset weakness in Germany. Asian same-store sales rose 0.6%, as gains in Australia offset weakness in Japan.
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McDonald’s continues to benefit from strong demand for its Dollar Menu, which features items like breakfast sandwiches and coffee for just $1. It is also seeing strong sales of new premium items and foods that it sells on a limited-time basis.
The company’s same-store sales rose 2.4% in November 2012. Most of these gains came from the U.S., where same-store sales increased 2.5%. Same-store sales rose 1.4% in Europe, as gains in the U.K. and Russia offset weakness in Germany. Asian same-store sales rose 0.6%, as gains in Australia offset weakness in Japan.
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WESTERN UNION CO. $14 (New York symbol WU; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 596.6 million; Market cap: $8.4 billion; Price-to-sales ratio: 1.4; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.westernunion.com) provides money-transfer and foreign-exchange services in over 200 countries.
In the three months ended September 30, 2012, the company’s earnings rose 12.4%, to $269.5 million from $239.7 million a year earlier. Western Union is an aggressive buyer of its own shares. Because of fewer shares outstanding, earnings per share rose at a faster pace of 18.4%, to $0.45 from $0.38.
If you exclude the cost of integrating the businesspayments division of U.K.-based Travelex Holdings, which Western Union bought in 2011, per-share earnings would have risen 15.0%, to $0.46 from $0.40.
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In the three months ended September 30, 2012, the company’s earnings rose 12.4%, to $269.5 million from $239.7 million a year earlier. Western Union is an aggressive buyer of its own shares. Because of fewer shares outstanding, earnings per share rose at a faster pace of 18.4%, to $0.45 from $0.38.
If you exclude the cost of integrating the businesspayments division of U.K.-based Travelex Holdings, which Western Union bought in 2011, per-share earnings would have risen 15.0%, to $0.46 from $0.40.
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ENCANA CORP. $20 (New York symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $16.2 billion; Price-to-sales ratio: 2.5; Dividend yield: 3.6%; TSINetwork Rating: Average; www.encana.com) has formed a joint venture with PetroChina International Investment Company Ltd., which is controlled by the Chinese government, to develop its Duvernay property in central Alberta. This field mainly contains natural gas liquids, such as butane.
Under the terms of the deal, Encana sold a 49.9% stake in Duvernay to PetroChina for $2.2 billion (Canadian). Encana will own the remaining 50.1% and will operate the project. PetroChina has already paid Encana $1.2 billion. It will pay the remaining $1.0 billion over the next four years.
Joint ventures like this help speed up the development of promising new fields. Moreover, as PetroChina is buying only a minority interest in this project, the deal complies with the federal government’s new foreign investment guidelines. Ottawa brought in these new rules in response to the takeover of oil-sands operator Nexen Inc. by another state-owned Chinese oil company.
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Under the terms of the deal, Encana sold a 49.9% stake in Duvernay to PetroChina for $2.2 billion (Canadian). Encana will own the remaining 50.1% and will operate the project. PetroChina has already paid Encana $1.2 billion. It will pay the remaining $1.0 billion over the next four years.
Joint ventures like this help speed up the development of promising new fields. Moreover, as PetroChina is buying only a minority interest in this project, the deal complies with the federal government’s new foreign investment guidelines. Ottawa brought in these new rules in response to the takeover of oil-sands operator Nexen Inc. by another state-owned Chinese oil company.
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FAIR ISAAC CORP. $42 (New York symbol FICO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 34.9 million; Market cap: $1.5 billion; Price-to-sales ratio: 2.2; Dividend yield: 0.2%; TSINetwork Rating: Average; www.fico.com) makes FICO Scores, a computer program that helps businesses make better decisions about customer creditworthiness. It is also profiting by selling software that helps credit card issuers control fraud and analyze cardholders’ spending patterns.
The company is benefiting from the recovery of the U.S. banking industry and rising demand for mortgages. In addition, Fair Isaac is expanding internationally. It is now working with China’s central bank to develop a standard credit score. This has big potential, particularly as the country’s banking system matures.
In addition, Fair Isaac recently paid $113.0 million for Adeptra, a U.K.-based company whose systems let businesses communicate with customers through a range of channels, including voice, instant messaging, mobile applications and email.
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The company is benefiting from the recovery of the U.S. banking industry and rising demand for mortgages. In addition, Fair Isaac is expanding internationally. It is now working with China’s central bank to develop a standard credit score. This has big potential, particularly as the country’s banking system matures.
In addition, Fair Isaac recently paid $113.0 million for Adeptra, a U.K.-based company whose systems let businesses communicate with customers through a range of channels, including voice, instant messaging, mobile applications and email.
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T. ROWE PRICE GROUP INC. $66 (Nasdaq symbol TROW; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 254.9 million; Market cap: $16.8 billion; Price-to-sales ratio: 5.8; Dividend yield: 2.1%; TSINetwork Rating: Average; www.troweprice.com) sells mutual funds and wealth management services.
On September 30, 2012, the company had a record $574.4 billion of assets under management, up 17.3% from $489.5 billion at the end of 2011.
The company continues to see strong demand for its “Retirement Funds,” which invest in other Price Group mutual funds and automatically adjust the buyer’s portfolio balance according to their age. Retirement Funds accounted for 47% of the company’s fund sales in the latest quarter.
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On September 30, 2012, the company had a record $574.4 billion of assets under management, up 17.3% from $489.5 billion at the end of 2011.
The company continues to see strong demand for its “Retirement Funds,” which invest in other Price Group mutual funds and automatically adjust the buyer’s portfolio balance according to their age. Retirement Funds accounted for 47% of the company’s fund sales in the latest quarter.
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GENERAL ELECTRIC CO. $21 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.5 billion; Market cap: $220.5 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.ge.com) is benefiting from its recent purchases of companies that supply equipment to oil and natural gas producers. It’s also cutting credit losses at its finance subsidiary.
As a result, GE has raised its quarterly dividend by 11.8%, to $0.19 a share from $0.17. The new annual rate of $0.76 yields 3.6%. This is its fifth dividend hike in the past three years. GE also plans to buy back up to $14.9 billion of its shares by 2015.
GE is a buy.
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As a result, GE has raised its quarterly dividend by 11.8%, to $0.19 a share from $0.17. The new annual rate of $0.76 yields 3.6%. This is its fifth dividend hike in the past three years. GE also plans to buy back up to $14.9 billion of its shares by 2015.
GE is a buy.
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UNITED TECHNOLOGIES CORP. $83 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 916.5 million; Market cap: $76.1 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.utc.com) recently purchased Goodrich Corp., a North Carolina-based company that makes aircraft parts, including landing gear, wheels and brakes. United Technologies paid $18.4 billion, including $1.9 billion of assumed debt.
To win regulatory approval, United Technologies agreed to sell some of its smaller businesses. For example, it recently sold three subsidiaries in its aerospace division for a total of $3.5 billion.
United Technologies now expects overall revenue of between $64 billion and $65 billion in 2013, up 10% to 12% from $58 billion in 2012. Goodrich will supply about half of this growth. The rest will come from improving sales at its other businesses, including Pratt & Whitney jet engines and Otis elevators.
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To win regulatory approval, United Technologies agreed to sell some of its smaller businesses. For example, it recently sold three subsidiaries in its aerospace division for a total of $3.5 billion.
United Technologies now expects overall revenue of between $64 billion and $65 billion in 2013, up 10% to 12% from $58 billion in 2012. Goodrich will supply about half of this growth. The rest will come from improving sales at its other businesses, including Pratt & Whitney jet engines and Otis elevators.
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FEDEX CORP. $93 (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 314.1 million; Market cap: $29.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 0.6%; TSI Network Rating: Average; www.fedex.com) reported that its earnings in the three months ended November 30, 2012 fell 11.9%, to $438 million, or $1.39 a share. That’s mainly because Hurricane Sandy forced the company to suspend parcel deliveries on the U.S. eastern seaboard. A year earlier, it earned $497 million, or $1.57 a share.
Revenue in the quarter rose 4.9%, to $11.1 billion from $10.6 billion. Strong demand for its lower-priced ground transportation services offset weaker demand for overnight deliveries.
FedEx continues to restructure its operations, mainly by cutting workers at its international air delivery division. It is also replacing older planes with more fuel-efficient models. These moves should save it $1.7 billion a year starting in 2014.
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Revenue in the quarter rose 4.9%, to $11.1 billion from $10.6 billion. Strong demand for its lower-priced ground transportation services offset weaker demand for overnight deliveries.
FedEx continues to restructure its operations, mainly by cutting workers at its international air delivery division. It is also replacing older planes with more fuel-efficient models. These moves should save it $1.7 billion a year starting in 2014.
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