price to sales ratio

Maple Leaf Foods and its subsidiary, Canada Bread, are in the middle of multi-year restructuring plan. A big part of this restructuring involves closing smaller plants and moving their operations into larger facilities with better machinery. The plan’s cost has held back Maple Leaf’s earnings and share price. However, these moves will cut its costs, and help it better deal with rising prices for raw materials, such as pork, wheat and corn, as well as the higher Canadian dollar, which has hurt exports. In addition, the resulting productivity improvements will help it compete with large multinational food producers. We like both companies, but Maple Leaf offers better value. At its current price, its stake in Canada Bread is worth roughly $7.20 per Maple Leaf share. That means you get Maple Leaf’s meat-processing operations, which account for nearly two-thirds of its revenue, for just $3.80 a share....

ENCANA CORP. $21 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $15.4 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.9%; TSINetwork Rating: Average; www.encana.com) is down 29% since the start of 2011. The company is partly a victim of its own success. Encana was an early pioneer in the development of unconventional gas reserves such as shale gas, which is natural gas that is trapped in rock formations. New technologies that Encana helped develop have cut the cost of extracting shale gas, which has let other companies expand their own shale gas production. This has greatly added to the supply of natural gas, and pushed down gas prices. However, like most commodities, gas prices are inherently volatile. In particular, one cold winter could quickly push up prices....

Media companies continue to face a number of challenges, including the slowing economy, which is hurting advertising revenue, and the explosion of free information available on the Internet. However, we feel high-quality information providers like these three will adapt and thrive. All three are market leaders, and they own some the industry’s best-known brands. What’s more, they are building strong Internet businesses of their own, and doing a good job of controlling their costs. These moves will help them increase their earnings, and give them more cash for dividends. THOMSON REUTERS CORP. $29 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 836.8 million; Market cap: $24.3 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.5%; TSINetwork Rating: Above Average; www.thomsonreuters.com) has two main divisions: Markets (which supplied 57% of Thomson Reuters’ 2010 revenue and 48% of its earnings), sells news and information products to banks and other financial institutions. Professional (43%, 52%) sells information to professionals in the legal, taxation, accounting and scientific research fields....

RESEARCH IN MOTION INC. $24 (Toronto symbol RIM; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.1 million; Market cap: $12.6 billion; Price-to-sales ratio: 0.6; No dividends paid; TSINetwork Rating: Above Average; www.rim.com) is paying an undisclosed sum for Dublin, Ireland-based NewBay. This privately held firm makes software that helps wireless network carriers deliver messages, video and appointment reminders to smartphones, tablet computers and other mobile devices. NewBay’s clients include AT&T, Verizon, T-Mobile and Deutsche Telekom. NewBay’s expertise should help RIM develop more Internet-based (or cloud) services, which let users store and access music, photos and other content a centralized server. For example, RIM recently launched BBM Music, a new cloud-based music-streaming service for the company’s BlackBerry smartphones. RIM is a buy.

ANDREW PELLER LTD. $8.99 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.3 million; Market cap: $128.6 million; Price-to-sales ratio: 0.5; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest wine producer, after Vincor Canada. In its 2012 first quarter, which ended June 30, 2011, Peller’s sales rose 7.7%, to $69.4 million from $64.5 million a year earlier. The company launched a number of new products, and is seeing rising demand for its more-profitable premium brands. That offset higher taxes on wines sold in its Ontario stores and slower sales of its home winemaking kits. Peller’s earnings fell 2.3%, to $3.9 million from $4.0 million. Earnings per share were unchanged at $0.28. The drop was mainly due to losses on hedging contracts that the company uses to lock in foreign-exchange rates. If you exclude all unusual items, earnings would have jumped 26.9%....

DUNDEE CORP. $23 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 64.8 million; Market cap: $1.5 billion; Price-to-sales ratio: 4.3; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) is a holding company with subsidiaries in three main areas: wealth management, real estate and resources. The Goodman family controls 83.3% of the company’s votes through multiple-voting shares. In February 2011, Dundee sold its 48% stake (60% voting interest) in DundeeWealth Inc. to Bank of Nova Scotia (Toronto symbol BNS). DundeeWealth owns the Dynamic family of mutual funds. Dundee Corp. still provides investment-management and brokerage services through 48%-owned Dundee Capital Markets Inc. (Toronto symbol DCM). Dundee Corp. received roughly $1.4 billion of Bank of Nova Scotia common and preferred shares for its DundeeWealth stake. As a result of this sale, Dundee Corp.’s revenue fell 20.2% in the three months ended June 30, 2011, to $123.6 million from $154.9 million a year earlier. Earnings fell 32.5%, to $24.3 million, or $0.27 a share, from $36.0 million, or $0.44 a share....

The slowing global economy will likely prompt airlines to spend less on new planes and simulators. However, both Bombardier and CAE operate other businesses that help diversify their operations and cut their exposure to the cyclical air-travel industry. BOMBARDIER INC. (Toronto symbols BBD.A $4.10 and BBD.B $4.01; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $6.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.bombardier.com) is the world’s third-largest commercial-aircraft maker, behind Boeing and Airbus. It is also the world’s largest passenger railcar manufacturer. In the three months ended July 31, 2011, Bombardier’s earnings rose 56.7%, to $210 million, or $0.12 a share (all amounts except share prices and market cap in U.S. dollars). A year earlier, it earned $134 million, or $0.07 a share. Sales rose 17.4% to $4.7 billion from $4.0 billion....

TECK RESOURCES LTD. $36 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 590.8 million; Market cap: $21.3 billion; Price-to-sales ratio: 1.9; Dividend yield: 1.7%; TSINetwork Rating: Average; www.teck.com) is spending $1 billion to increase production at its metallurgical coal mines in B.C., and reopen its Quintette coal mine in northern B.C....

EMERA INC. $33 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 121.8 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 4.1%; TSINetwork Rating: Average; www.emera.com) gets 70% of its revenue from Nova Scotia Power Inc., which is Nova Scotia’s main electrical-power supplier. It gets the rest comes from its interests in pipelines and power companies in the U.S. and Caribbean. Emera’s regulated businesses provide over 80% of its earnings. That gives it plenty of steady cash flows for dividends: Emera recently raised its quarterly dividend by 3.8%, to $0.3375 a share from $0.325. The new annual rate of $1.35 yields 4.1%. Emera is a buy....

CANADIAN TIRE CORP. $58 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.4 million; Market cap: $4.7 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.canadiantire.ca) will now install some of the household equipment it sells, such as garage-door openers, hot water tanks and central vacuum systems. Previously, customers had to install these items themselves, or hire professionals to do it for them. The company can now offer installation as a package deal with these products. That should attract more customers, and help it compete with retailers who already provide this service. Canadian Tire is a buy.