price to sales ratio
CANADIAN PACIFIC RAILWAY LTD. $86 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.3 million; Market cap: $14.7 billion; Price-to-sales ratio: 2.7; Dividend yield: 1.6%; TSINetwork Rating: Above Average; www.cpr.ca) earned $103 million, or $0.60 a share, in the three months ended June 30, 2012. That’s down 19.5% from $128 million, or $0.75 a share, a year earlier.
A nine-day strike by CP’s locomotive engineers, conductors and yard workers cut its earnings by around $0.30 a share in the latest quarter. In addition, CP paid severance costs to its previous chief executive and other expenses related to the hiring of its new CEO. Without these items, CP would have earned $1.20 a share.
CP is benefiting from a plan to improve its efficiency with new locomotives, upgraded tracks, and software that optimizes train loads and speeds. This was the main reason for the higher earnings.
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A nine-day strike by CP’s locomotive engineers, conductors and yard workers cut its earnings by around $0.30 a share in the latest quarter. In addition, CP paid severance costs to its previous chief executive and other expenses related to the hiring of its new CEO. Without these items, CP would have earned $1.20 a share.
CP is benefiting from a plan to improve its efficiency with new locomotives, upgraded tracks, and software that optimizes train loads and speeds. This was the main reason for the higher earnings.
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CANADIAN NATIONAL RAILWAY CO. $87 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 434.8 million; Market cap: $37.8 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.cn.ca) reported that its earnings rose 17.3% in the three months ended June 30, 2012, to $631 million from $538 million a year earlier. Earnings per share rose 22.0%, to $1.44 from $1.18, on fewer shares outstanding. If you exclude one-time items, such as gains on sales of rail lines, earnings per share rose 19.0%, to $1.50 from $1.26.
Revenue rose 12.5% to $2.5 billion from $2.3 billion. CN saw higher shipments of metals and minerals, coal, intermodal (containers that can be shipped by rail, ship or truck), petroleum and chemicals, and automotive and forest products. That offset lower shipments of grain and fertilizer.
CN’s operating ratio improved to 66.2% from 69.0% a year earlier. (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 12.5% to $2.5 billion from $2.3 billion. CN saw higher shipments of metals and minerals, coal, intermodal (containers that can be shipped by rail, ship or truck), petroleum and chemicals, and automotive and forest products. That offset lower shipments of grain and fertilizer.
CN’s operating ratio improved to 66.2% from 69.0% a year earlier. (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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MOLSON COORS CANADA INC. (Toronto symbols TPX.A $43 and TPX.B $43; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 180.9 million; Market cap: $7.8 billion; Price-to-sales ratio: 2.3; Dividend yield: 2.9%; TSINetwork Rating: Average; www. molsoncoors.com) has completed its $3.4-billion purchase of StarBev LP, which owns nine breweries in Central and Eastern Europe (all amounts except share prices and market cap in U.S. dollars).
In the three months ended June 30, 2012, this acquisition contributed $19.7 million to Molson Coors’s pre-tax earnings. That helped push up the company’s overall earnings by 8.0%, to $250.1 million from $231.6 million a year earlier. Earnings per share rose 12.2%, to $1.38 from $1.23, on fewer shares outstanding. Sales rose 7.0%, to $999.4 million from $933.6 million. StarBev contributed $57.3 million to the latest sales figure.
The company borrowed $2.9 billion to buy StarBev. As a result, its long-term debt has risen to $4.1 billion from $1.9 billion at the end of 2011. That’s a high 52% of its market cap. However, brewing is a stable business, and StarBev’s cash flows will help Molson Coors pay down this debt.
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In the three months ended June 30, 2012, this acquisition contributed $19.7 million to Molson Coors’s pre-tax earnings. That helped push up the company’s overall earnings by 8.0%, to $250.1 million from $231.6 million a year earlier. Earnings per share rose 12.2%, to $1.38 from $1.23, on fewer shares outstanding. Sales rose 7.0%, to $999.4 million from $933.6 million. StarBev contributed $57.3 million to the latest sales figure.
The company borrowed $2.9 billion to buy StarBev. As a result, its long-term debt has risen to $4.1 billion from $1.9 billion at the end of 2011. That’s a high 52% of its market cap. However, brewing is a stable business, and StarBev’s cash flows will help Molson Coors pay down this debt.
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IMPERIAL OIL LTD. $45 (Toronto symbol IMO; Conservative Growth Portfolio; Resources sector; Shares outstanding: 847.6 million; Market cap: $38.1 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.1%; TSINetwork Rating: Average; www.imperialoil.ca) is getting a lot of inquiries about an oil refinery it is selling in Dartmouth, Nova Scotia. Imperial is selling this facility because it uses higher priced oil from the North Sea instead of cheaper crude from western Canada. After the sale, it will still own three refineries.
The company aims to complete the sale in early 2013. If it can’t, it will probably convert the refinery into a storage terminal.
Imperial Oil is a buy.
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The company aims to complete the sale in early 2013. If it can’t, it will probably convert the refinery into a storage terminal.
Imperial Oil is a buy.
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EMERA INC. $35 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 123.9 million; Market cap: $4.3 billion; Price-to-sales ratio: 2.0; Dividend yield: 4.0%; TSINetwork Rating: Average; www.emera.com) owns Nova Scotia Power, which is that province’s main electricity supplier. It also owns electrical utilities in the U.S. and the Caribbean.
In the three months ended June 30, 2012, revenue fell 0.1%, to $501.3 million from $501.7 million a year earlier. Two large industrial customers in Nova Scotia closed their operations, which cut electricity sales in the province by 19.8%. That offset the positive impact of higher power rates.
However, earnings jumped 44.7%, to $46.3 million from $32.0 million a year earlier. Because it had slightly more shares outstanding, earnings per share rose 42.3%, to $0.37 from $0.26. If you exclude a gain on an investment, Emera would have earned $0.28 a share in the latest quarter.
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In the three months ended June 30, 2012, revenue fell 0.1%, to $501.3 million from $501.7 million a year earlier. Two large industrial customers in Nova Scotia closed their operations, which cut electricity sales in the province by 19.8%. That offset the positive impact of higher power rates.
However, earnings jumped 44.7%, to $46.3 million from $32.0 million a year earlier. Because it had slightly more shares outstanding, earnings per share rose 42.3%, to $0.37 from $0.26. If you exclude a gain on an investment, Emera would have earned $0.28 a share in the latest quarter.
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FORTIS INC. $33 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 186.9 million; Market cap: $6.2 billion; Price-to-sales ratio: 1.7; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.fortis.ca) is the main electricity supplier in Newfoundland and Prince Edward Island. It also operates power plants in other parts of Canada, the U.S. and the Cayman Islands. In addition, wholly owned FortisBC Energy distributes natural gas in British Columbia.
Fortis recently agreed to buy CH Energy Group (New York symbol CHG), which supplies electricity to 300,000 customers in New York State. This company does not own power plants; instead, it buys electricity from other producers. It also distributes natural gas to 75,000 users.
Regulators must still approve the deal, but Fortis should close it in early 2013. It will pay $1.5 billion U.S., including $500 million U.S. of CH’s debt.
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Fortis recently agreed to buy CH Energy Group (New York symbol CHG), which supplies electricity to 300,000 customers in New York State. This company does not own power plants; instead, it buys electricity from other producers. It also distributes natural gas to 75,000 users.
Regulators must still approve the deal, but Fortis should close it in early 2013. It will pay $1.5 billion U.S., including $500 million U.S. of CH’s debt.
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p>ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $76 and ACO.Y [class II voting] $76; Income Portfolio, Utilities sector; Shares outstanding: 57.6 million; Market cap: $4.4 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.atco.com) is a holding company. Its main subsidiary is 52.7%-owned Canadian Utilities (see page 103). It also owns 75.5% of ATCO Structures & Logistics, which builds temporary buildings for construction companies and energy exploration firms; Canadian Utilities owns the remaining 24.5%. In the three months ended June 30, 2012, ATCO’s revenue rose 11.9% to $987 million from $882 million a year earlier. That’s because its structures division won a number of new contracts, and it recently purchased a gas-distribution business in Australia. Earnings rose 21.3%, to $74 million, or $1.28 a share, from $61 million, or $1.07.
Companies like ATCO sometimes trade for less than the value of their assets. Investors call this a “holding company discount.” That’s why you can buy a share of ATCO for $76 and get roughly $79 worth of Canadian Utilities. That means you get ATCO’s non-utility businesses, which provide a third of its earnings, for free.
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Companies like ATCO sometimes trade for less than the value of their assets. Investors call this a “holding company discount.” That’s why you can buy a share of ATCO for $76 and get roughly $79 worth of Canadian Utilities. That means you get ATCO’s non-utility businesses, which provide a third of its earnings, for free.
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CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $67 and CU.X [class B voting] $67; Income Portfolio, Utilities sector; Shares outstanding: 127.6 million; Market cap: $8.5 billion; Price-to-sales ratio: 2.8; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.canadianutilities.com) distributes electricity and natural gas in Alberta. It also operates 18 power plants in Canada, Australia and the U.K. ATCO Ltd. (see page 104) owns 52.7% of the company.
Canadian Utilities continues to benefit from last year’s $1.1-billion purchase of a company that distributes natural gas in Perth, Australia. That helped offset lower revenues from its Alberta power plants due to planned maintenance shutdowns.
As a result, the company’s earnings rose 5.6% in the second quarter of 2012, to $95 million, or $0.74 a share. The new Australian business added $16 million to that total. A year earlier, Canadian Utilities earned $90 million, or $0.70 a share. Revenue rose 6.0%, to $706 million from $666 million.
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Canadian Utilities continues to benefit from last year’s $1.1-billion purchase of a company that distributes natural gas in Perth, Australia. That helped offset lower revenues from its Alberta power plants due to planned maintenance shutdowns.
As a result, the company’s earnings rose 5.6% in the second quarter of 2012, to $95 million, or $0.74 a share. The new Australian business added $16 million to that total. A year earlier, Canadian Utilities earned $90 million, or $0.70 a share. Revenue rose 6.0%, to $706 million from $666 million.
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TRANSCANADA CORP. $44 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 704.0 million; Market cap: $31.0 billion; Price-to-sales ratio: 3.6; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.transcanada.com) is mainly known for its natural gas and oil pipelines. However, the company continues to expand its electrical-power business. TransCanada’s 19 power plants in Canada and the U.S. now supply 30% of its revenue.
The company has agreed to build a new gas-fired power plant near Napanee, Ontario, as part of a deal with the Ontario Power Authority (OPA), which regulates the province’s power producers. This new plant will replace a plant that TransCanada previously agreed to build in Oakville, Ontario.
The OPA will pay TransCanada $210 million for the turbines and other equipment originally earmarked for the Oakville plant. The company will also receive $40 million to cover the costs of equipment that it can’t move to the new site. However, the OPA will pay TransCanada lower rates for the new plant’s power when it starts up in 2017.
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The company has agreed to build a new gas-fired power plant near Napanee, Ontario, as part of a deal with the Ontario Power Authority (OPA), which regulates the province’s power producers. This new plant will replace a plant that TransCanada previously agreed to build in Oakville, Ontario.
The OPA will pay TransCanada $210 million for the turbines and other equipment originally earmarked for the Oakville plant. The company will also receive $40 million to cover the costs of equipment that it can’t move to the new site. However, the OPA will pay TransCanada lower rates for the new plant’s power when it starts up in 2017.
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AGRIUM INC. $102 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 158.0 million; Market cap: $16.1 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.0%; TSINetwork Rating: Average; www.agrium.com) has gained 30% since May 2012....