price to sales ratio

SUNCOR ENERGY INC. $32 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $48.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.6%; TSINetwork Rating: Average; www.suncor.com) became Canada’s largest integrated oil company in 2009, when it merged with Petro- Canada.

Suncor gets 60% of its production from its Alberta oil sands projects. The rest comes from conventional oil and natural gas properties. Suncor also operates four refineries and 1,500 Petro- Canada gas stations.

The company aims to increase its oil sands production by 10% per year to 2020. However, it may slow its expansion because rising North American shale oil production is weighing on prices. As well, labour shortages and a lack of pipeline capacity are creating further uncertainty.

...

MCCORMICK & CO. INC. $60 (New York symbol MKC; Income Portfolio, Consumer sector; Shares outstanding: 120.2 million; Market cap: $7.2 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.1%; TSINetwork Rating: Average; www.mccormick.com) is buying Wuhan Asia-Pacific Condiments Co., Ltd., a leading maker of bouillon products in China. The company will pay $141 million for this business when the deal closes in mid-2013. To put that price in context, McCormick earned $80.4 million, or $0.60 a share, in its fiscal 2012 second quarter, which ended May 31. 2012. The new operations will add $115 million to McCormick’s annual sales of $3.9 billion....

These small industrial companies face a number of challenges, including rising costs and falling sales in Europe and other overseas markets. However, all four are leaders in their niche industries. That should continue to spur their long-term growth. They also have long histories of raising their dividends. Still, we see only two as buys right now. GENUINE PARTS CO. $64 (New York symbol GPC; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 155.1 million; Market cap: $9.9 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.1%; TSINetwork Rating: Average; www.genpt.com) gets 50% of its sales and 53% of its earnings by selling auto parts. The company operates 1,300 of its own outlets under the NAPA banner, and its distribution business serves 4,750 independent stores across North America....

INTERNATIONAL BUSINESS MACHINES CORP. $197 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $216.7 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.ibm.com) is paying an undisclosed sum for Texas Memory Systems. The deal should close by the end of 2012. Privately held Texas Memory specializes in solid-state computer storage drives. Unlike regular hard drives, these are flash-memory drives with no moving parts. As a result, they use less energy and let computers access data quicker. This technology should speed up IBM’s mainframes and enhance its analytics software, which helps businesses and governments quickly gather and analyze huge amounts of data. IBM is our #1 buy for 2012.

NVIDIA CORP. $15 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 618.8 million; Market cap: $9.3 billion; Price-to-sales ratio: 2.3; No dividends paid; TSINetwork Rating: Average; www.nvidia.com) continues to see strong demand for its Tegra chips from makers of smartphones and tablet computers. In its 2013 second quarter, which ended July 29, 2012, Nvidia’s sales rose 2.7%, to $1.04 billion from $1.02 billion a year earlier. However, earnings fell 11.9%, to $170.5 million from $193.5 million. Earnings per share fell 15.6%, to $0.27 from $0.32, on more shares outstanding. Research spending rose 13.5%, to $281.2 million, or a high 26.9% of its revenue. This was the main reason for the lower earnings. However, new chips from these outlays should spur sales....

J.C. PENNEY CO. INC. $24 (New York symbol JCP; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 218.8 million; Market cap: $5.3 billion; Price-to-sales ratio: 0.3; Dividend suspended in May 2012; TSINetwork Rating: Extra Risk; www.jcpenney.com) operates more than 1,100 department stores in the U.S. and Puerto Rico. It also sells goods over the Internet. In response to strong competition from discount retailers, Penney is shifting to an everyday pricing strategy. The company feels that predictable prices will spur customers to visit more often instead of waiting for items to go on sale. Penney is also remodelling its stores to feature more in-store boutiques devoted to single brands, such as its Sephora beauty and fragrance shops. As well, the company is investing in new computer systems and simplifying its purchasing....

Oil prices will likely stay volatile, particularly as slowing Asian economies cut their consumption. We feel the best way for investors to lower their risk is to stick with well-established producers like these two. Both have high-quality reserves that should last decades. CHEVRON CORP. $112 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.0 billion; Market cap: $224.0 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.chevron.com) is the second-largest integrated oil company in the U.S. after ExxonMobil. Chevron is still assessing the damage caused by a fire at its oil refinery in Richmond, California. This facility processes 245,000 barrels of crude oil a day and accounts for 10% of the refining capacity on the U.S. west coast. It will likely be several months before it resumes normal operations....

SONY CORP. ADRs $12 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.0 billion; Market cap: $12.0 billion; Price-to-sales ratio: 0.2; Dividend yield: 2.7%; TSINetwork Rating: Average; www.sony.com) is buying California-based Gaikai Inc., whose technology makes it easier to play online video games. The purchase will help Sony sell more video games to users of its mobile phones and handheld gaming devices. The company will pay $380 million for Gaikai when the deal closes later this year. To put that in context, it lost $312 million, or $0.31 per ADR, in the three months ended June 30, 2012. Sony is a hold.

WINDSTREAM CORP. $9.59 (Nasdaq symbol WIN; Income Portfolio, Utilities sector; Shares outstanding: 588.0 million; Market cap: $5.6 billion; Price-to-sales ratio: 1.1; Dividend yield: 10.4%; TSINetwork Rating: Average; www.windstream.com) reported revenue of $1.5 billion in the quarter ended June 30, 2012, up 49.3% from $1.0 billion a year earlier. The gain is mainly due to its December 2011 purchase of PAETEC Holding Corp., which sells telecommunication services to businesses. Integration costs cut its earnings by 43.4%, to $54.7 million, or $0.09 a share, from $96.7 million, or $0.19 a share. As a result of this purchase, Windstream now gets 68% of its revenue from broadband services, up 2.5% from a year earlier. That’s helping it offset declining traditional phone revenue. The company feels that closing overlapping functions will save it $50 million in 2012 and $100 million by the end of 2014. That should let it keep paying quarterly dividends of $0.25 a share, for a 10.4% annualized yield....

BROADRIDGE FINANCIAL SERVICES INC. $24 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 124.9 million; Market cap: $3.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.0%; TSINetwork Rating: Average; www.broadridge.com) gets 70% of its revenue from its Investor Communication Solutions division, which distributes proxy materials, including ballots, to investors in stocks and mutual funds. It also counts the votes. Broadridge’s ProxyEdge software helps centralize and simplify shareholder voting, particularly if a meeting involves multiple ballots. Broadridge mails and processes 60% of all proxy votes worldwide. The remaining 30% of its revenue comes from its Securities Processing Solutions division, which provides transaction-processing services that automate many functions, including taking and executing orders, confirming trades, settlement and accounting. Big changes since spinoff ...