price to sales ratio
PEPSICO INC. $64 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.6 billion; Market cap: $102.4 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.pepsico.com) is the world’s second-largest soft-drink maker after Coca-Cola. It also makes other products, such as Frito-Lay snack foods, Tropicana fruit juices and Quaker Oats.
PepsiCo recently raised its selling prices in response to rising ingredient costs. That’s the main reason why its sales rose 13.3% in the quarter ended September 3, 2011, to $17.6 billion from $15.5 billion a year earlier. In June 2011, PepsiCo paid $3.8 billion for Wimm-Bill-Dann, Russia’s largest dairy and juice company. This accounted for a third of the sales gain. Without unusual items, mainly costs to integrate recent acquisitions, earnings per share rose rose 7.4%, to $1.31 from $1.22.
PepsiCo continues to expand internationally. In November 2011, it paid an undisclosed sum for privately held Grupo Mabel, Brazil’s second-largest maker of cookies, crackers and snack foods. This business complements the foods that PepsiCo already sells in Brazil, including Frito-Lay chips (sold under the Elma Chips brand) and Quaker Oats snacks.
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PepsiCo recently raised its selling prices in response to rising ingredient costs. That’s the main reason why its sales rose 13.3% in the quarter ended September 3, 2011, to $17.6 billion from $15.5 billion a year earlier. In June 2011, PepsiCo paid $3.8 billion for Wimm-Bill-Dann, Russia’s largest dairy and juice company. This accounted for a third of the sales gain. Without unusual items, mainly costs to integrate recent acquisitions, earnings per share rose rose 7.4%, to $1.31 from $1.22.
PepsiCo continues to expand internationally. In November 2011, it paid an undisclosed sum for privately held Grupo Mabel, Brazil’s second-largest maker of cookies, crackers and snack foods. This business complements the foods that PepsiCo already sells in Brazil, including Frito-Lay chips (sold under the Elma Chips brand) and Quaker Oats snacks.
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TEXAS INSTRUMENTS INC. $28 (New York symbol TXN [Switches to Nasdaq on January 1, 2012, symbol TXN]; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $30.8 billion; Price-to-sales ratio: 2.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.ti.com) is seeing weaker demand for its analog chips, which convert sound and images into digital signals that computers can understand.
As a result, earnings per share will probably fall to $1.85 in 2011 from $2.62 in 2010. The stock trades at 15.1 times the new estimate. That’s still a reasonable p/e, particularly as chip sales should rebound in 2012 as manufacturers use up their inventories.
Texas Instruments is a buy.
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As a result, earnings per share will probably fall to $1.85 in 2011 from $2.62 in 2010. The stock trades at 15.1 times the new estimate. That’s still a reasonable p/e, particularly as chip sales should rebound in 2012 as manufacturers use up their inventories.
Texas Instruments is a buy.
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DUN & BRADSTREET CORP. $70 (New York symbol DNB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 48.6 million; Market cap: $3.4 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.1%; TSINetwork Rating: Average; www.dnb.com) is the world’s largest provider of credit reports on individual companies.
Dun & Bradstreet continues to launch new online services. Demand for these products is strong, because they give investors better access to the most current data. In addition, the company’s expanding online business cuts its printing and postage costs.
These new products helped push up earnings by 15.2% in the quarter ended September 30, 2011, to $69.9 million from $60.7 million a year earlier. Earnings per share rose 17.4%, to $1.42 from $1.21, on fewer shares outstanding. Revenue rose 11.0%, to $439.4 million from $396.0 million.
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Dun & Bradstreet continues to launch new online services. Demand for these products is strong, because they give investors better access to the most current data. In addition, the company’s expanding online business cuts its printing and postage costs.
These new products helped push up earnings by 15.2% in the quarter ended September 30, 2011, to $69.9 million from $60.7 million a year earlier. Earnings per share rose 17.4%, to $1.42 from $1.21, on fewer shares outstanding. Revenue rose 11.0%, to $439.4 million from $396.0 million.
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MOODY’S CORP. $32 (New York symbol MCO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 222.0 million; Market cap: $7.1 billion; Price-to-sales ratio: 3.2; Dividend yield: 2.0%; TSINetwork Rating: Average; www.moodys.com) provides credit ratings and other information on bonds and other securities. The company gets two-thirds of its revenue from credit ratings. The remaining third comes from its analytics businesses, which mainly sell credit-assessment software.
There have been fewer issues of speculative-grade bonds and bonds backed by mortgages due to concerns over high European debt levels. That has hurt demand for the company’s credit ratings.
That’s why Moody’s is continuing to expand beyond credit ratings. To that end, it recently bought a majority stake in Copal Partners, a private firm that sells research and other services to institutional investors. Moody’s did not say how much it paid, but Copal has about $50 million of annual revenue.
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There have been fewer issues of speculative-grade bonds and bonds backed by mortgages due to concerns over high European debt levels. That has hurt demand for the company’s credit ratings.
That’s why Moody’s is continuing to expand beyond credit ratings. To that end, it recently bought a majority stake in Copal Partners, a private firm that sells research and other services to institutional investors. Moody’s did not say how much it paid, but Copal has about $50 million of annual revenue.
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BAXTER INTERNATIONAL INC. $48 (New York symbol BAX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 563.9 million; Market cap: $27.1 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.8%; TSINetwork Rating: Average; www.baxter.com) has purchased Baxa Corp., which makes products that improve the safety and effectiveness of oral and intravenous drugs. This company’s expertise will Baxter’s drug-delivery devices work better.
Baxter paid $380 million for Baxa. That’s equal to 61% of the $624 million that Baxter earned before unusual items in the third quarter of 2011. The latest earnings are up 4.9% from $595 million a year earlier. Earnings per share rose 7.9%, to $1.09 from $1.01, on fewer shares outstanding.
In addition, the company raised its quarterly dividend by 8.1%, to $0.335 from $0.31 a share. The new annual rate of $1.34 yields 2.8%.
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Baxter paid $380 million for Baxa. That’s equal to 61% of the $624 million that Baxter earned before unusual items in the third quarter of 2011. The latest earnings are up 4.9% from $595 million a year earlier. Earnings per share rose 7.9%, to $1.09 from $1.01, on fewer shares outstanding.
In addition, the company raised its quarterly dividend by 8.1%, to $0.335 from $0.31 a share. The new annual rate of $1.34 yields 2.8%.
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FORD MOTOR CO. $10 (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 3.8 billion; Market cap: $38.0 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.0%; TSINetwork Rating: Extra Risk; www.ford.com) stopped paying dividends in June 2006 to conserve cash for a major restructuring plan.
This plan helped turn the company around, and it is now seeing stronger vehicle sales. As a result, it will resume quarterly dividend payments of $0.05 a share. The $0.20 annual rate yields 2.0%.
In light of the new dividend, we’ve upgraded Ford’s TSINetwork Rating from Speculative to Extra Risk.
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This plan helped turn the company around, and it is now seeing stronger vehicle sales. As a result, it will resume quarterly dividend payments of $0.05 a share. The $0.20 annual rate yields 2.0%.
In light of the new dividend, we’ve upgraded Ford’s TSINetwork Rating from Speculative to Extra Risk.
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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.
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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.
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MCGRAW-HILL COMPANIES INC. $42 (New York symbol MHP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 293.4 million; Market cap: $12.3 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.4%; TSINetwork Rating: Average; www.mcgraw-hill.com) announced in September 2011 that it will split into two separate, publicly traded companies.
One of these new firms, McGraw-Hill Markets, will sell a variety of financial-information products. This business will include Standard & Poor’s, which provides credit ratings on bonds, and McGraw-Hill’s J.D. Power market-research firm. McGraw-Hill Markets will have annual revenue of $4 billion. International sales will account for 40% of that total.
The other company, McGraw-Hill Education, will publish textbooks for schools and colleges. This business will have $2.4 billion of annual revenue.
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One of these new firms, McGraw-Hill Markets, will sell a variety of financial-information products. This business will include Standard & Poor’s, which provides credit ratings on bonds, and McGraw-Hill’s J.D. Power market-research firm. McGraw-Hill Markets will have annual revenue of $4 billion. International sales will account for 40% of that total.
The other company, McGraw-Hill Education, will publish textbooks for schools and colleges. This business will have $2.4 billion of annual revenue.
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KRAFT FOODS INC. $36 (New York symbol KFT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.8 billion; Market cap: $64.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.kraft.com) plans to break itself into two separate, publicly traded companies by the end of 2012.
One company will sell snack foods, such as Oreo cookies, Cadbury chocolates, Trident gum and Tang powdered beverages. This business will have annual sales of $32 billion, with 42% of that coming from developing markets, such as China, Brazil and India.
The other company will consist of Kraft’s slower-growing grocery-products business, which mainly sells its foods in North American supermarkets. These products include Kraft macaroni and cheese, Oscar Mayer meats, Philadelphia cream cheese, Maxwell House coffee, Jell-O desserts and Miracle Whip salad dressing. This company will have $16 billion of annual sales.
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One company will sell snack foods, such as Oreo cookies, Cadbury chocolates, Trident gum and Tang powdered beverages. This business will have annual sales of $32 billion, with 42% of that coming from developing markets, such as China, Brazil and India.
The other company will consist of Kraft’s slower-growing grocery-products business, which mainly sells its foods in North American supermarkets. These products include Kraft macaroni and cheese, Oscar Mayer meats, Philadelphia cream cheese, Maxwell House coffee, Jell-O desserts and Miracle Whip salad dressing. This company will have $16 billion of annual sales.
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INTEL CORP. $23 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.1 billion; Market cap: $117.3 billion; Price-to-sales ratio: 2.3; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.intel.com) warned that its revenue in the fourth quarter of 2011 will fall to $13.7 billion, down from its earlier forecast of $14.7 billion.
Factories in Thailand produce half of the world’s computer hard drives, and flooding in that country has led to shortages. As a result, computer makers have cut production and are ordering fewer chips from Intel.
Chip sales should rise over the next few months as hard-drive production returns to normal. As well, the shortage will not affect demand for Intel’s more-profitable server chips. Moreover, Intel gets 57% of its revenue from fast-growing markets in Asia, and just 13% from Europe.
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Factories in Thailand produce half of the world’s computer hard drives, and flooding in that country has led to shortages. As a result, computer makers have cut production and are ordering fewer chips from Intel.
Chip sales should rise over the next few months as hard-drive production returns to normal. As well, the shortage will not affect demand for Intel’s more-profitable server chips. Moreover, Intel gets 57% of its revenue from fast-growing markets in Asia, and just 13% from Europe.
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