price to sales ratio

These two leading makers of automated teller machines (ATMs) continue to diversify their businesses and develop innovative new products. These moves strengthen their long-term prospects. As well, both stocks trade at attractive multiples to their earnings. NCR CORP. $18 (New York symbol NCR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 157.4 million; Market cap: $2.8 billion; Price-to-sales ratio: 0.5; No dividends paid; TSINetwork Rating: Average; www.ncr.com) is a leading maker of ATMs, checkout scanners, cash registers and self-serve kiosks. In August 2011, NCR paid $1.2 billion for Radiant Systems Inc., which makes point-of-sale terminals and self-serve kiosks for hotels, restaurants and gas stations. This purchase will cut NCR’s reliance on ATMs, which account for 55% of its overall revenue....

AGILENT TECHNOLOGIES INC. $44 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 348.1 million; Market cap: $15.3 billion; Price-to-sales ratio: 2.2; Dividend yield: 0.9%; TSINetwork Rating: Average; www.agilent.com) makes testing systems that help improve electronic devices, such as cellphones. It also makes medical and drug-testing equipment. The company will pay its first-ever quarterly dividend of $0.10 a share in April 2012. The annual rate of $0.40 yields 0.9%....

These two companies mainly serve banks and other financial firms. Bank profits remain weak, as high unemployment has dampened loan demand. Even so, Broadridge and Fair Isaac will likely continue to increase their sales to banks. That’s because both firms sell products and services that help their clients save money and cut fraud. BROADRIDGE FINANCIAL SERVICES INC. $24 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 124.1 million; Market cap: $3.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.7%; TSINetwork Rating: Average; www.broadridge.com) serves the investment industry in three areas: investor communications, securities processing and transaction clearing. In its fiscal 2012 first quarter, Broadridge earned $19 million. That’s up 46.2% from $13 million a year earlier. Earnings per share rose 50.0%, to $0.15 from $0.10, on fewer shares outstanding. Revenue rose 13.1%, to $476.4 million from $421.4 million....

CEDAR FAIR L.P. $25 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 55.4 million; Market cap: $1.4 billion; Price-to-sales ratio: 1.4; Dividend yield: 6.4%; TSINetwork Rating: Average; www.cedarfair.com) had a record 23.4 million visitors at its amusement parks, water parks and hotels in 2011. That’s up 2.6% from 22.8 million in 2010. As a result, the partnership estimates that its revenue increased 5.4% in 2011, to $1.03 billion from $977.6 million in 2010. Thanks to its improving outlook, the partnership expects to pay distributions of $1.60 a unit in 2012 (for a 6.4% yield). That’s up 60.0% from $1.00 in 2011. Cedar Fair is a buy.

WELLS FARGO & CO. $30 (New York symbol WFC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 5.3 billion; Market cap: $159.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.6%; TSINetwork Rating: Average; www.wellsfargo.com) earned $15.0 billion in 2011. That’s up 29.2% from $11.6 billion in 2010. Earnings per share rose 27.6%, to $2.82 from $2.21, on more shares outstanding. More clients are repaying their loans on time. As a result, loan-loss provisions fell 49.9%, to $7.9 billion from $15.8 billion. This was the main reason for earnings gain. Revenue fell 5.0%, to $80.9 billion from $85.2 billion. Demand for mortgages and credit cards is rising. However, the bank is getting less interest income from borrowers due to today’s low interest rates. Wells Fargo is still a hold....

NEWMONT MINING CORP. $60 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 493.1 million; Market cap: $29.6 billion; Price-to-sales ratio: 2.8; Dividend yield: 2.3%; TSINetwork Rating: Average; www.newmont.com) expects its overall copper production will fall to around 160 million pounds in 2012 from 206 million pounds in 2011. That’s because the operators of its 44.56%-owned Batu Hijau open-pit copper mine in Indonesia need time to clear out waste material so they can reach lower depths with higher grades of copper. As well, Newmont expects its copper production costs to jump to between $1.80 and $2.20 per ounce in 2012 from $1.26 in 2011. The company also expects to produce 5.0 million to 5.2 million ounces of gold in 2012, which is comparable to the 5.2 million ounces it produced in 2011. However, due to rising power and labour costs at its Australian mines, its gold-production costs will jump to between $625 and $675 an ounce from $592 in 2011. Newmont’s long-term outlook remains bright. Concerns over European sovereign debt should continue to spur gold prices. Copper prices should also rebound in 2012, as global consumption will probably exceed production....

CAMPBELL SOUP CO. $32 (New York symbol CPB; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 318.7 million; Market cap: $10.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.campbellsoupcompany.com) is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices. The company’s sales rose 1.7%, from $7.9 billion in 2007 to $8.0 billion in 2008 (fiscal years end July 31). Sales fell to $7.6 billion in 2009, but rose to $7.7 billion in 2011.

Erratic earnings set to stabilize

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SARA LEE CORP. $18 (New York symbol SLE; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 590.7 million; Market cap: $10.6 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.saralee.com) announced in January 2011 that it would break itself into two separate, publicly traded companies. One firm will consist of Sara Lee’s international coffee and tea businesses. The other will focus on its North American packaged meat operations. The company aims to complete the breakup by the end of fiscal 2012 (fiscal years end June 30). It will also pay a special dividend of $3.00 a share before the split....

MANITOBA TELECOM SERVICES INC. $30 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 65.7 million; Market cap: $2.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 5.7%; TSINetwork Rating: Average; www.mtsallstream.com) has 1.3 million telephone and wireless customers in Manitoba. This business now accounts for 55% of the company’s revenue. The remaining 45% comes from its Allstream division, which provides integrated telephone, Internet and other communication services to businesses across Canada.

Revenue fell from $1.9 billion in 2006 to $1.8 billion in 2010, largely because the Allstream division lost a big client. Strong competition from cable companies has also hurt demand for the company’s traditional phone services.

Earnings rose 17.9%, from $2.57 a share (or a total of $174.9 million) in 2006 to $3.03 a share (or $195.8 million) in 2008. Earnings then fell 33.3%, to $2.02 a share (or $130.5 million) in 2010.

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TORSTAR CORP. $9.43 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.2 million; Market cap: $746.9 million; Price-to-sales ratio: 0.5; Dividend yield: 5.3%; TSINetwork Rating: Above Average; www.torstar.com) has agreed to buy 25% of privately held Blue Ant Media Inc., which owns three specialty TV channels that focus on music, comedy and travel.

Blue Ant is also in the process of buying High Fidelity HDTV Inc., which owns four high-definition specialty channels, including Oasis HD (nature programming) and HIFI (music and arts programming).

Blue Ant’s purchase of High Fidelity requires regulatory approval. After the deal closes, Torstar will invest $22.7 million in Blue Ant. To put that in context, Torstar earned $25.2 million, or $0.32 a share, in the three months ended September 30, 2011.

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