price to sales ratio

TENNANT CORP. $43 (New York symbol TNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 18.6 million; Market cap: $799.8 million; Price-to-sales ratio: 1.1; Dividend yield: 1.6%; TSINetwork Rating: Average; www.tennantco.com) makes industrial floor-cleaning equipment, including scrubbers, sweepers and polishers. It also manufactures cleaning gear for garages, stadiums, parking lots and city streets.

The company continues to see strong demand for its ec-H2O floor-scrubbing machine, which uses electricity to make tap water act like a detergent. That eliminates the need for soaps and cleaning agents, and lowers the machine’s operating costs.

Tennant has also developed other environmentally friendly equipment. For example, the Orbio 5000-sc creates a cleaning liquid using water, salt and electricity. Users can pour this solution into spray bottles and floor scrubbers.

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SNAP-ON INC. $70 (New York symbol SNA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 58.2 million; Market cap: $4.1 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.9%; TSINetwork Rating: Average; www.snapon.com) makes tools for auto mechanics and sells them directly through its fleet of franchised vans that visit garages. This unique sales model puts it in a great position to gain from rising car sales.

Right now, Snap-On is focused on expanding in Asia and other fast-growing regions, where rising prosperity is fuelling car demand. The company now gets roughly 40% of its revenue from overseas markets.

At the same time, Snap-On is investing heavily in other businesses that will cut its exposure to the cyclical car market. For example, it now makes specialized tools for mining companies, electrical power generators and aerospace companies.

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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.

Genuine also distributes industrial parts (34% of sales, 33% of earnings), office furniture (12%, 10%) and electrical equipment (4%, 4%).

In January 2012, the company paid $165.6 million for 30% of Exego Group, a privately held firm that sells auto parts through 430 stores in Australia and New Zealand. As part of the deal, Genuine acquired an option to buy the remaining 70%.

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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.

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These three leading oil producers are aggressively expanding their oil sands operations. These projects are more expensive to develop than conventional deposits, and the recent drop in oil prices could hurt their profitability. However, their reserves should last for decades, and their operating costs tend to fall after they start up. Moreover, these companies’ refineries, which convert oil into gasoline and other fuels, help shield them from volatile oil and gas prices. That’s because refineries pay less for crude when oil prices decline; this enhances their profits. 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....

SNC-LAVALIN GROUP INC. $37 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $5.6 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.4%; TSINetwork Rating: Average; www.snclavalin.com) earned $32.5 million, or $0.21 a share, in the three months ended June 30, 2012. That’s down 68.2%, from $102.2 million, or $0.67 a share, a year earlier. The company spent $50 million more than it expected on a power plant in Tunisia and a petrochemical plant in Russia. That was the main reason for the lower earnings. The stock has also come under pressure in the past few months over $56 million U.S. in unusual payments that the company made to agents it hired to secure certain construction contracts. However, this matter has had little impact on SNC’s ability to win new engineering deals: revenue rose 14.2% in the quarter, to $1.9 billion from $1.7 billion. SNC-Lavalin is a buy.

ENBRIDGE INC. $39 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 797.0 million; Market cap: $31.1 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.enbridge.com) recently repaired a leaking oil pipeline in Wisconsin. The company has faced criticism over leaks like this. That could hurt its proposed $5.5-billion Northern Gateway project, which would pump oil from Edmonton to Kitimat, B.C. However, Enbridge still has a strong safety record, and it has pledged to spend an extra $500 million on thicker steel and extra monitoring for leaks. Enbridge is a buy.

HOME CAPITAL GROUP INC. $48 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.7 million; Market cap; $1.7 billion; Price-to-sales ratio: 2.2; Dividend yield: 1.8%; TSINetwork Rating: Average; www.homecapital.com) is a mortgage lender that serves borrowers who don’t meet the stricter standards of larger, traditional lenders, like banks. Even though Home Capital caters to riskier borrowers, it avoids huge credit losses by identifying problem loans early. It then uses this information to restructure a borrower’s repayment terms and adjust its lending policies. In the three months ended June 30, 2012, Home Capital’s earnings rose 10.4%, to $53.2 million, or $1.54 a share. That’s despite a higher corporate tax rate in Ontario, which cut Home Capital’s earnings by $2.0 million. A year earlier, the company earned $48.2 million, or $1.38 a share....

Both CAE and Nordion are developing new products that help them tap into profitable new markets. That makes both companies less reliant on their core businesses—and enhances their long-term prospects. CAE INC. $10 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 258.3 million; Market cap: $2.6 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.cae.com) spends around 10% of its annual revenue of $1.8 billion on research. That helps it develop simulators for new planes, like the Boeing 787 Dreamliner and Airbus A380. The company is also using these funds to apply its expertise to new fields. For example, CAE is now making simulators and other products, including lifelike mannequins, to train paramedics and medical students. It is also focusing on the mining industry: Right now, mining firms are using software that CAE developed to plan new mines and measure reserves. These new businesses, which both have strong growth potential, now supply 5% of CAE’s revenue....

TIM HORTONS INC. $52 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 157.4 million; Market cap: $8.2 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.6%; TSINetwork Rating: Average; www.timhortons.com) has raised the prices of muffins, sandwiches and other items at its coffee-and-donut stores in Canada and the U.S. That’s because the drought in North America is pushing up its costs for wheat, canola oil and other ingredients. The increases are unlikely to hurt customer traffic or sales, particularly because the company did not increase coffee prices. Tim Hortons is a buy.