price to sales ratio
MANITOBA TELECOM SERVICES INC. $32 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 65.7 million; Market cap: $2.1 billion; Price-to-sales ratio: 1.2; Dividend yield: 5.3%; TSINetwork Rating: Average; www.mtsallstream.com) announced that its Allstream division has connected 2,388 buildings in Canada to its fibre optic network....
SNC-LAVALIN GROUP INC. $53 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 150.9 million; Market cap: $8.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.6%; TSINetwork Rating: Average; www.snclavalin.com) has won a contract to install new containment and ventilation equipment in a Romanian nuclear power plant. SNC will complete this project in 2013.
The contract is worth $48 million, which is less than 1% of the company’s annual revenue of $7 billion. However, this deal could lead to more contracts from nuclear power producers, particularly as they invest in new safety equipment after the Fukushima nuclear plant in Japan was damaged by the March 2011 earthquake and tsunami.
SNC-Lavalin is a buy.
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The contract is worth $48 million, which is less than 1% of the company’s annual revenue of $7 billion. However, this deal could lead to more contracts from nuclear power producers, particularly as they invest in new safety equipment after the Fukushima nuclear plant in Japan was damaged by the March 2011 earthquake and tsunami.
SNC-Lavalin is a buy.
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TELUS CORP. (Toronto symbols T $57 and T.A $54; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 324.5 million; Market cap: $18.5 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.telus.com) has paid an undisclosed sum for Wolf Medical Systems, which makes software that helps hospitals and clinics convert patient records to electronic form.
Doctors can also use Wolf’s products to access this information from a wide variety of devices, including smartphones and tablet computers.
Adding Wolf’s expertise enhances Telus’s current electronic health record services. There is also plenty of room for the company to grow in this market: right now, just 32% of Canada’s medical records are digital.
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Doctors can also use Wolf’s products to access this information from a wide variety of devices, including smartphones and tablet computers.
Adding Wolf’s expertise enhances Telus’s current electronic health record services. There is also plenty of room for the company to grow in this market: right now, just 32% of Canada’s medical records are digital.
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EMERA INC. $33 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 122.2 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 4.1%; TSINetwork Rating: Average; www.emera.com) will invest an extra $83 million U.S. in seven American wind-power projects after its partner, Algonquin Power & Utilities Corp. (Toronto symbol AQN), dropped out of the joint venture. As a result, Emera will pay $333 million U.S. for 49% of this venture; First Wind Holdings LLC owns the remaining 51%. That’s roughly equal to nine months’ cash flow.
Wind power relies heavily on politically sensitive government subsidies. However, wind projects represent just a small portion of Emera’s overall operations.
Emera is a buy.
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Wind power relies heavily on politically sensitive government subsidies. However, wind projects represent just a small portion of Emera’s overall operations.
Emera is a buy.
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CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $62 and CU.X [class B voting] $62; Income Portfolio, Utilities sector; Shares outstanding: 127.6 million; Market cap: $7.9 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.canadianutilities.com) distributes electricity and natural gas in Alberta. It also operates 19 power plants in Canada, Australia and the U.K.
The company has a higher p/e ratio than ATCO: the stock trades at 15.4 times Canadian Utilities’ likely 2012 earnings of $4.02 a share.
However, Canadian Utilities’ shares are more liquid. As well, its higher dividend makes it a better choice for income-seeking investors. Canadian Utilities recently raised its quarterly dividend by 9.9%, to $0.4425 a share from $0.4025. The new annual rate of $1.77 yields 2.9%.
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The company has a higher p/e ratio than ATCO: the stock trades at 15.4 times Canadian Utilities’ likely 2012 earnings of $4.02 a share.
However, Canadian Utilities’ shares are more liquid. As well, its higher dividend makes it a better choice for income-seeking investors. Canadian Utilities recently raised its quarterly dividend by 9.9%, to $0.4425 a share from $0.4025. The new annual rate of $1.77 yields 2.9%.
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ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $61 and ACO.Y [class II voting] $61; Income Portfolio, Utilities sector; Shares outstanding: 57.7 million; Market cap: $3.5 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.atco.com) is a holding company. Its main subsidiary is 52.7%-owned Canadian Utilities.
ATCO has four main divisions: Utilities (which distributes electricity and natural gas); Energy (which operates power plants); Structures & Logistics (which provides buildings and related services, such as fire protection, to construction and resource companies); and its Australian business (which operates power plants and distributes natural gas in Australia.) ATCO owns 75.5% of the Structures division; Canadian Utilities owns the remaining 24.5%.
The Structures business continues to win new contracts. For example, in January 2012, it signed a deal with Husky Energy to provide housing and related services to workers at the Sunrise Energy oil sands project in Alberta.
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ATCO has four main divisions: Utilities (which distributes electricity and natural gas); Energy (which operates power plants); Structures & Logistics (which provides buildings and related services, such as fire protection, to construction and resource companies); and its Australian business (which operates power plants and distributes natural gas in Australia.) ATCO owns 75.5% of the Structures division; Canadian Utilities owns the remaining 24.5%.
The Structures business continues to win new contracts. For example, in January 2012, it signed a deal with Husky Energy to provide housing and related services to workers at the Sunrise Energy oil sands project in Alberta.
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ENCANA CORP. $19 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $14.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.0%; TSINetwork Rating: Average; www.encana.com) is one of North America’s largest natural gas producers. The company prefers to focus on large unconventional reserves, including shale gas, which is natural gas that is trapped in rock formations. To extract it, companies must pump water and chemicals into the rock. This fractures the rock and releases the natural gas. Encana’s proven and probable reserves could last 23 years.
In 2011, the company agreed to sell $3.5 billion of non-essential assets (all amounts except share price and market cap in U.S. dollars).
The sales are part of Encana’s plan to focus on its main gas-producing properties in Alberta, B.C., Wyoming, Michigan, Colorado and Louisiana. The company will also use the proceeds to maintain its quarterly dividend of $0.20 U.S. a share, for a 4.0% annualized yield.
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In 2011, the company agreed to sell $3.5 billion of non-essential assets (all amounts except share price and market cap in U.S. dollars).
The sales are part of Encana’s plan to focus on its main gas-producing properties in Alberta, B.C., Wyoming, Michigan, Colorado and Louisiana. The company will also use the proceeds to maintain its quarterly dividend of $0.20 U.S. a share, for a 4.0% annualized yield.
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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: 4.0%; TSINetwork Rating: Above Average; www.scotiabank.com) is raising $1.7 billion by selling up to 33 million common shares for $50.25 each. The bank is also thinking about selling Scotia Plaza, its 68-storey office tower in downtown Toronto. Bank of Nova Scotia could get up to $1 billion for this building.
The cash from these sales will help Bank of Nova Scotia comply with new international regulations that require banks to maintain more capital to cover potential loan losses.
A stronger balance sheet will also help the bank pursue more acquisitions, particularly in fast-growing markets in Asia and Latin America.
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The cash from these sales will help Bank of Nova Scotia comply with new international regulations that require banks to maintain more capital to cover potential loan losses.
A stronger balance sheet will also help the bank pursue more acquisitions, particularly in fast-growing markets in Asia and Latin America.
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BELL ALIANT INC. $28 (Toronto symbol BA, Conservative Growth Portfolio, Utilities sector; Shares outstanding: 229.1 million; Market cap: $6.4 billion; Price-to-sales ratio: 2.3; Dividend yield: 6.8%; TSINetwork Rating: Average; www.bellaliant.ca) sells telephone and Internet services to 2.6 million customers in Atlantic Canada, as well as rural parts of Ontario and Quebec. The company also sells wireless services through an alliance with BCE Inc., which owns 43.8% of Bell Aliant.
We’ve lowered Bell Aliant’s TSINetwork Rating to Average from Above Average. It’s still prominent in its industry, with a record of steady profits and dividends, and its balance sheet remains strong. However, it faces rising competition across all of its businesses. In addition, many of its phone customers are giving up their land lines and switching to wireless devices.
Bell Aliant is still a buy.
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We’ve lowered Bell Aliant’s TSINetwork Rating to Average from Above Average. It’s still prominent in its industry, with a record of steady profits and dividends, and its balance sheet remains strong. However, it faces rising competition across all of its businesses. In addition, many of its phone customers are giving up their land lines and switching to wireless devices.
Bell Aliant is still a buy.
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CENOVUS ENERGY INC. $38 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 754.3 million; Market cap: $28.7 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.1%; TSINetwork Rating: Extra Risk; www.cenovus.com) operates three oil sands projects in Alberta and one in Saskatchewan.
Cenovus ships the heavy bitumen from these properties to refineries in Illinois and Texas. U.S.-based ConocoPhillips (New York symbol COP) owns 50% of the refineries, as well as 50% of Cenovus’s main Foster Creek and Christina Lake oil sands projects in Alberta.
Cenovus gets about half of its output from the oil sands. Conventional oil and natural gas wells supply the other half.
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