price to sales ratio

TUPPERWARE BRANDS CORP. $54 (New York symbol TUP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 55.9 million; Market cap: $3.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.tupperwarebrands.com) gets 70% of its sales by making high-quality products for the home, including plastic food and beverage containers and children’s educational toys. The remaining 30% comes from its beauty-products division, which makes a wide range of cosmetics, bath oils and fragrances.

Markets beyond the U.S. supply 90% of the company’s sales. Its main brands include Tupperware, Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare and Nuvo.

Tupperware prefers to sell its goods through independent dealers instead of retail stores. This helps keep its distribution and marketing costs down. As well, it pays its dealers commissions instead of salaries, so they have a greater incentive to promote Tupperware’s goods. That means the company rarely needs to use costly discounts to spur its sales.

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Canadian Pacific Railway is our #1 buy for 2012. However, we also have a high opinion of its larger rival, Canadian National Railway. CN has thrived since it became a public company in 1995, thanks to a series of acquisitions that greatly expanded its U.S. operations. That has helped CN profit from the North American Free Trade Agreement (NAFTA), which spurred a rapid rise in trade volumes between Canada, the U.S. and Mexico. CN is now in a strong position to gain from rising trade with Asia. Moreover, the company’s ongoing focus on improving its efficiency should keep fuelling its earnings growth and give it more cash for dividends....

CANADIAN PACIFIC RAILWAY LTD. $73 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 170.9 million; Market cap: $12.5 billion; Price-to-sales ratio: 2.4; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.cpr.ca) has attracted a lot of media attention lately. That’s mainly due to efforts by a U.S.-based investment firm that wants to improve its performance and possibly spark a takeover offer. In our three-part Successful Investor portfolio strategy, we advise investors to invest mainly in well-established companies, spread your money out across the five main economic sectors, and downplay stocks that are in the broker/media limelight, which can bloat investor expectations. Downturns can be brutal when stocks fail to live up to those inflated expectations. So, investors have asked why we chose a #1 stock that’s in what they see as ‘the limelight’. The difference is in the definition....

These three industrial stocks are more volatile than our more conservative picks, like CP Rail and CN Rail (see page 61). Even so, their rising sales, healthy balance sheets and strong reputations in niche markets help temper their risk. All three also trade at attractive multiples to earnings. Moreover, they all kept paying dividends during the recession. However, we only see two as buys right now. SNC-LAVALIN GROUP INC. $39 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 161.1 million; Market cap: $6.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.3%; TSINetwork Rating: Average; www.snclavalin.com) is a leading Canadian engineering and construction company. It specializes in large-scale public works projects, such as roads, bridges, transit systems and water-treatment plants....

BANK OF NOVA SCOTIA $52 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.1 billion; Market cap: $57.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.scotiabank.com) has agreed to sell Scotia Plaza, its 68-storey office building in downtown Toronto. Under the terms of the deal, Dundee REIT (Toronto symbol D.UN) and H&R REIT (Toronto symbol HR.UN) will pay Scotia $1.3 billion for the building when the sale closes, probably by June 30, 2012. Dundee will own two-thirds of the property, and H&R will own the remaining third. The bank will remain as the anchor tenant. Meanwhile, Bank of Nova Scotia earned $1.5 billion in the three months ended April 30, 2012. That’s up 16.1% from $1.3 billion a year earlier. Earnings per share rose 8.5%, to $1.15 from $1.06, on more shares outstanding. Revenue rose 1.4%, to $4.7 billion from $4.6 billion. Strong gains at its international operations offset slower growth at its Canadian retail banking division....

CENOVUS ENERGY INC. $32 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 755.6 million; Market cap: $24.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.8%; TSINetwork Rating: Extra Risk; www.cenovus.com) has received regulatory approval to develop its Narrows Lake oil sands project in northern Alberta; U.S.-based ConocoPhillips (New York symbol COP) owns 50% of this property. Narrows Lake could begin operating in 2017. When it reaches full capacity, it should produce 130,000 barrels per day (Cenovus’s share is 65,000 barrels). To put that in context, Cenovus produced an average of 156,850 barrels per day in the first quarter of 2012. Narrows Lake’s reserves should last 40 years. The company plans to use a new technique, called a solventaided process, to extract the oil from Narrows Lake. This approach will add to the project’s construction and development costs, but it should let the partners recover up to 15% more oil than current methods....

ANDREW PELLER LTD. $9.93 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $148.0 million; Price-to-sales ratio: 0.5; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest wine producer, after Vincor Canada. Peller operates wineries in B.C., Ontario and Nova Scotia. It also imports wines and sells home-winemaking kits. In its 2012 fiscal year, which ended March 31, 2012, Peller’s sales rose 4.3%, to $276.9 million from $265.4 million in fiscal 2011. That’s because the company continues to launch new wines, particularly higher-priced premium wines. Its sales also benefited from a new joint venture with Wayne Gretzky Estate Winery and a recently purchased home-winemaking business....

Great-West and IGM have moved down lately due to concerns over slowing economic growth and volatile stock markets. However, both companies are leaders in their fields, and both are cheap in relation to their earnings. They also have long histories of raising their dividends. GREAT-WEST LIFECO INC. $21 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 949.8 million; Market cap: $19.9 billion; Price-to-sales ratio: 0.7; Dividend Yield: 5.9%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is Canada’s largest insurance company, with $523.0 billion of assets under administration. It also sells mutual funds, as well as retirement-planning and wealthmanagement services. Canada accounts for 53% of the company’s earnings, followed by Europe (31%) and the U.S. (16%). In the three months ended March 31, 2012, Great-West’s earnings rose 8.7%, to $451 million, or $0.48 a share. A year earlier, it earned $415 million, or $0.44 a share. Revenue rose 3.9%, to $6.5 billion from $6.3 billion....

MOLSON COORS CANADA INC. (Toronto symbols TPX.A $40 and TPX.B $40; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 181.1 million; Market cap: $7.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.3%; TSINetwork Rating: Average; www.molsoncoors.com) hopes to spur sales this summer with Coors Light Iced T, a new beer mixed with tea and lemon. Innovative products like this should help the company compete with makers of flavoured vodka and wine drinks. Molson also aims to attract more consumers who don’t typically drink beer, particularly women. Molson Coors is a buy. The class B shares are the better choice.

CANADIAN IMPERIAL BANK OF COMMERCE $71 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 404.9 million; Market cap: $28.7 billion; Price-to-sales ratio: 1.8; Dividend yield: 5.1%; TSINetwork Rating: Above Average; www.cibc.com) continues to profit by focusing on retail banking, which accounts for 76% of its business. That cuts its reliance on its more-volatile corporate-lending and securities-trading divisions. In its fiscal 2012 second quarter, which ended April 30, 2012, the bank earned $766 million, or $1.90 a share. That’s up 6.1% from $722 million, or $1.80 a share, a year earlier. Without unusual items, such as losses on securities that CIBC holds, earnings per share would have risen 9.3%, to $2.00 from $1.83. Revenue rose 2.3%, to $3.1 billion from $3.0 billion. CIBC is a buy....