price to sales ratio
INTERNATIONAL FLAVORS & FRAGRANCES INC. $63 (New York symbol IFF; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 80.3 million; Market cap: $5.1 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.iff.com) makes over 34,000 unique compounds that improve the taste of foods and the smell of a wide variety of consumer products. It has 31 plants in 14 countries. Major clients include Procter & Gamble, Nestle, Kraft, Unilever and General Mills. In 2010, the company’s Fragrances business accounted for 54% of its sales, and 49% of its earnings. These products are found in such items soaps, detergents and air fresheners. The remaining 46% of IFF’s sales and 51% of its earnings came from its Flavors division. These products are used in soft drinks, candies, baked goods and alcoholic drinks....
TRANSCONTINENTAL INC. $15 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 81.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.9%; TSINetwork Rating: Average; www.transcontinental.com) is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. It also publishes newspapers and magazines. Transcontinental also has over 250 web sites. These web sites will become more important to its growth in the next few years, as advertisers spend more on the Internet than print products. In the first quarter of fiscal 2011, which ended January 31, 2011, Transcontinental earned $29.9 million, or $0.37 a share. That’s up 10.3% from $27.1 million, or $0.34 a share, a year earlier. These figures exclude writedowns and other non-recurring items. Revenue rose 3.6%, to $530.1 million from $511.6 million....
TORSTAR CORP. $15 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.1 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.torstar.com) publishes The Toronto Star, which is Canada’s largest daily newspaper by circulation. The company also publishes three other daily newspapers and over 100 weeklies, mainly in southern Ontario. Newspapers account for about 70% of Torstar’s revenue, and 60% of its earnings. The company’s other main business is wholly owned Harlequin Enterprises Ltd., the world’s leading publisher of romance novels. Torstar recently received $291.6 million from the sale of its 20% stake in CTVglobemedia to BCE Inc. (Toronto symbol BCE). This business owns CTV Television and other broadcasting businesses....
TRANSCANADA CORP. $39 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 699.5 million; Market cap: $27.3 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.transcanada.com) operates a 60,000-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. TransCanada also owns, or has interests in, over 10,900 megawatts of power generation. That includes Bruce Power LP, a nuclear facility in Ontario, and the Ravenswood facility, which serves New York City. TransCanada has spent about $10 billion of the $20 billion it has set aside for new growth projects. It will spend the remaining $10 billion over the next two years. Its biggest project is the Keystone pipeline, which it is building in three phases. Keystone’s first phase is now pumping crude oil from Alberta to refineries in Illinois. The second phase will extend to Oklahoma, and should be ready in 2011. The third phase, called Keystone XL, will pump oil to refineries in Texas. U.S. environmentalists and politicians have criticized this project. Even so, TransCanada aims to finish Keystone XL by the end of 2013....
Bombardier was a favourite of momentum traders in the 1990s, and the stock peaked at over $26 in 2000. However, 9/11 and two recessions cut the company’s share price to under $3 in 2009. In response, Bombardier aggressively cut its costs. It also expanded its railcar business. That lowered its exposure to the highly cyclical aircraft industry. These moves have significantly improved Bombardier’s earnings. That’s also helping the company develop new, more fuel-efficient airplanes and high-speed trains. These new products will help Bombardier increase its sales and market share, particularly in fast-growing countries like China and Brazil. BOMBARDIER INC. (Toronto symbols BBD.A $6.90 and...
CAE INC. $12 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 256.8 million; Market cap: $3.1 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.3%; TSINetwork Rating: Average; www.cae.com) was, like Bombardier (see left), a one-time favourite of momentum traders. But it fell out of the broker/media limelight after airlines cut their flight-simulator orders in the wake of 9/11. However, the company continues to benefit from its expansion into pilot training, which it began in 2000. This has cut CAE’s reliance on simulator sales, and given it more predictable revenue streams. CAE now trains over 50,000 pilots each year at its 24 training centres around the world....
These three utilities are using the steady cash flows from their regulated businesses to invest in new projects. That should spur their long-term earnings, and give them more cash to keep raising their dividends. TRANSCANADA CORP. $39 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 699.5 million; Market cap: $27.3 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.transcanada.com) operates a 60,000-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. TransCanada also owns, or has interests in, over 10,900 megawatts of power generation. That includes Bruce Power LP, a nuclear facility in Ontario, and the Ravenswood facility, which serves New York City. TransCanada has spent about $10 billion of the $20 billion it has set aside for new growth projects. It will spend the remaining $10 billion over the next two years. Its biggest project is the Keystone pipeline, which it is building in three phases....
FORTIS INC. $32 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 174.4 million; Market cap: $5.6 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.fortis.ca) continues to benefit from its 2007 purchase of Terasen Inc., which distributes natural gas to 939,600 customers in B.C. Terasen’s profits rose 11.1% in 2010, and provided 46% of Fortis’s record earnings of $285.0 million, or $1.65 a share. That’s up 8.8% from $262.0 million, or $1.54 a share, in 2009. The stock now trades at 18.4 times the $1.74 a share that Fortis will probably earn in 2011. That’s a high p/e ratio for a utility that gets 93% of its revenue from slow-growing regulated businesses....
SHAWCOR LTD. $35 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.6 million; Market cap: $2.5 billion; Price-to-sales ratio: 2.4; Dividend yield: 0.9%; TSINetwork Rating: Average; www.shawcor.com) is buying the pipeline-coating operations of privately held Altus Energy Services. The company did not reveal the price. This Nisku, Alberta-based business coats the inside and outside of pipelines to prevent rust. The company specializes in coating bends, fittings and elbows. The Altus operations will let ShawCor sell a wider range of coating services to western Canadian natural-gas and oil pipeline operators. ShawCor is a buy.
Torstar and Transcontinental should continue to benefit from rising advertising revenue as the economy improves. As well, both companies have bought new, efficient presses that have lowered their operating costs. Moreover, both are cheap in relation to their earnings. TORSTAR CORP. $15 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.1 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.torstar.com) publishes The Toronto Star, which is Canada’s largest daily newspaper by circulation. The company also publishes three other daily newspapers and over 100 weeklies, mainly in southern Ontario. Newspapers account for about 70% of Torstar’s revenue, and 60% of its earnings. The company’s other main business is wholly owned Harlequin Enterprises Ltd., the world’s leading publisher of romance novels....