price to sales ratio

Telus is one of our top dividend-paying stocks. Meanwhile, it continues to grow due to its heavy investments in its wireless networks. Thanks to rising wireless revenue, the company has tripled its dividend since 2003. It now plans to raise its dividend twice a year to 2013, and increase the rate by 10% a year. Demand for wireless services should continue to rise. Right now, about 73% of Canadians use a wireless device. That should rise to around 80% in the next two years, as more people upgrade from standard cellphones to smartphones and tablet computers. TELUS CORP. (Toronto symbols T $52 and T.A $50; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 324 million; Market cap: $16.8 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.telus.com) is Canada’s second-largest telephone company after BCE Inc. (Toronto symbol BCE)....

CANADIAN TIRE CORP. $61 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.4 million; Market cap: $5.0 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.canadiantire.ca) is buying The Forzani Group Ltd. (Toronto symbol FGL), which sells sporting goods through over 500 stores in Canada, including SportChek and Athlete’s World. Forzani gets 70% of its sales by selling clothing and footwear. So there is little overlap with the sports equipment, such as skates and hockey sticks, that Canadian Tire stores mainly sell. The $771-million purchase price is equal to 1.7 times the $453.6 million, or $5.56 a share, that Canadian Tire earned in 2010. The deal should close in the third quarter of 2011....

We continue to advise against overindulging in oil stocks. That’s because the Resource sector (including oil) is highly volatile, and no one can accurately predict future oil prices. For instance, after rising to $115 U.S. a barrel, oil dropped 16% in the first week of May 2011, to $97 U.S., on fears that the global economic recovery may be stalling. That’s why investors should stick with well-established oil producers with high-quality reserves and rising production, such as these three. All three should also benefit from the election of the Conservative majority government, which has promised not to impose onerous new carbon taxes or environmental regulations on oil-sands operators....

BELL ALIANT INC. $27 (Toronto symbol BA, Conservative Growth Portfolio, Utilities sector; Shares outstanding: 227.8 million; Market cap: $6.2 billion; Price-to-sales ratio: 1.0; Dividend yield: 7.0%; TSINetwork Rating: Above Average; www.bellaliant.ca) spent $120 million on capital upgrades in the first three months of 2011, up 26.7% from $94 million a year earlier. It spent most of this cash on upgrades to its high-speed Internet networks in Atlantic Canada. These upgrades are helping the company attract new Internet customers, and offsetting lower revenues from its traditional phone operations. Bell Aliant’s revenue fell 1.0% in the quarter, to $681.6 million from $688.7 million a year earlier. Earnings per share fell 24.5%, to $0.37 from $0.49, due to higher pension costs. However, free cash flow (cash flow minus capital expenditures) rose 55.4%, to $88.1 million from $56.7 million. That should let it keep paying quarterly dividends of $0.475 a share (annualized yield of 7.0%). Bell Aliant is a buy.

TORONTO-DOMINION BANK $82 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 883.1 million; Market cap: $72.4 billion; Price-to-sales ratio: 2.8; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.td.com) has agreed to sell its 13.46% stake in Maple Leaf Sports & Entertainment (MLSE) to the Ontario Teachers’ Pension Plan. MLSE owns professional sports teams (Toronto Maple Leafs, Toronto Raptors and Toronto FC) plus the Air Canada Centre arena in downtown Toronto. The bank did not disclose the price, but it likely made a substantial return on this investment. TD Bank is a buy.

POTASH CORP. OF SASKATCHEWAN $50 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 854.3 million; Market cap: $42.7 billion; Price-to-sales ratio: 6.4; Dividend yield: 0.5%; TSINetwork Rating: Average; www.potashcorp.com) has risen 12% since the federal government blocked BHP Billiton Ltd.’s (New York symbol BHP) hostile, $43.33 U.S.-a-share takeover offer in November 2010 (all per-share amounts adjusted for a 3-for-1 split in February 2011). The gain is mainly due to rising fertilizer demand and prices. Potash Corp. is a leading producer of potash, phosphate and nitrogen for use in fertilizers. Most of the company’s mines are in Saskatchewan, which has the world’s largest potash deposits. The company sold 2.8 million tonnes of potash in the first quarter of 2011. That’s up 13.1% from 2.5 million tonnes a year earlier. The average potash price rose 14.0%, to $366 a tonne from $321 (all amounts expect share price and market cap in U.S. dollars)....

Canada’s two main railways face many unpredictable challenges, like bad weather and rising fuel costs. However, both have streamlined their operations. That helps them quickly respond to sudden setbacks. Both should continue to benefit as the improving economy pushes up freight volumes. We like both, but prefer CP for new buying. CANADIAN NATIONAL RAILWAY CO. $73 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 461.8 million; Market cap: $33.7 billion; Price-to-sales ratio: 4.1; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest freight-rail network, and serves 16 U.S. states. Microsoft co-founder Bill Gates is CN’s largest shareholder, with just over 10% of the shares. In the three months ended March 31, 2011, CN earned $668 million. That’s up 30.7% from $511 million a year earlier. The company spent $340 million on share buybacks in the latest quarter. Because of fewer shares outstanding, earnings per share rose 34.3%, to, $1.45 from $1.08....

ENCANA CORP. $31 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $22.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 2.4%; TSINetwork Rating: Average; www.encana.com) continues to use joint ventures to cut the cost of developing its unconventional natural-gas properties. Northwest Natural Gas Co. (New York symbol NWN) will invest $250 million U.S. over the next five years for an undisclosed stake in Encana’s Jonah field in Wyoming. The deal gives Northwest, which distributes gas to 674,000 customers in Oregon and Washington State, a portion of Jonah’s production at a set price. Encana is a buy.

BOMBARDIER INC. (Toronto symbols BBD.A $6.70 and BBD.B $6.69; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $11.4 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.5%; TSINetwork Rating: Average; www.bombardier.com) continues to win new railcar contracts. The company recently won a nine-year deal to build 200 diesel locomotives for DB Regio AG, which operates public-transit systems in Germany. This contract is worth $867 million, which is equal to 5% of Bombardier’s annual revenue of $17.7 billion (all amounts except share price and market cap in U.S. dollars). The company will start delivering these trains in 2013. Bombardier has also received a $186-million order for 50 electric locomotives from Italy’s state-owned railway company. The company will deliver these trains in 2012 and 2013....

PRECISION DRILLING CORP. $13 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 275.7 million; Market cap: $3.6 billion; Price-to-sales ratio: 2.5; No dividends paid since February 2009; TSINetwork Rating: Extra Risk; www.precisiondrilling.com) provides contract-drilling services to land-based oil and gas producers in Canada, the U.S. and Mexico. Precision owns 359 drilling rigs. The company earned $0.23 a share in the three months ended March 31, 2011. If you exclude a one-time charge related to the early repayment of certain notes, Precision would have earned $0.30 a share. That’s up 50.0% from $0.20 a share a year earlier. Revenue rose 40.8%, to $525.4 million from $373.1 million. The company continues to see strong demand for rigs that use horizontal drilling techniques to extract oil from hard-to-reach deposits....