price to sales ratio

SYMANTEC CORP. $18 (Nasdaq symbol SYMC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 763.2 million; Market cap: $13.7 billion; Price-to-sales ratio: 2.3; No dividends paid; TSINetwork Rating: Average; www.symantec.com) makes software that protects computers from viruses and electronic attacks. The popular Norton anti-virus program is the company’s best-known product. In the past few years, Symantec has expanded its corporate-security operations by purchasing other software companies. That has cut its exposure to cyclical home-computer sales. Big purchases fuelled growth ...

Prices for oil, copper and other commodities continue to rise as the global economy recovers. That has pushed up the share prices of most resource companies, including the three oil producers we analyze in this issue. Another way to profit from surging commodity prices is by investing in companies that sell equipment and services to the resources industry. Finning is a top example. The stock has nearly doubled from its recent low of $16 in June 2010. Even so, it still trades at a reasonable multiple to earnings. FINNING INTERNATIONAL INC. $29 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.2 million; Market cap: $5.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.finning.com) sells, rents and repairs heavy equipment, such as tractors, bulldozers and trucks, made by Caterpillar Inc....

TECK RESOURCES LTD. $58 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 590.6 million; Market cap: $34.3 billion; Price-to-sales ratio: 3.5; Dividend yield: 1.0%; TSINetwork Rating: Average; www.teck.com) sold 23.2 million tonnes of coal in 2010, up 17.2% from 19.8 million tonnes in 2009. Coal prices rose 15.3% in 2010, to $181 U.S. a tonne from $157 U.S. Teck is also seeing stronger demand and rising prices for its other commodities, including copper, zinc and lead. As a result, its earnings rose 61.3% in 2010, to $1.5 billion from $924 million in 2009. Earnings per share rose 51.4%, to $2.62 from $1.73. These figures exclude unusual items, such as gains on asset sales. Revenue rose 21.7% in 2010, to a record $9.3 billion from $7.7 billion. In 2011, Teck will probably sell 24.5 million to 25.5 million tonnes of coal. That’s up around 8% from 2010, but down from its earlier prediction of 26.0 million tonnes....

Canada’s oil sands still face strong opposition from environmentalists. However, new technology has sharply lowered the oil sands’ greenhouse-gas emissions. As well, turmoil in Egypt and other Middle Eastern countries highlights the oil sands’ strategic importance to the U.S. and Canada. These factors make it less likely that Ottawa will introduce regulations that would slow oil-sands development. These three oil-sands producers have all moved up lately, but they still have plenty of room to grow. SUNCOR ENERGY INC. $40 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $64.0 billion; Price-to-sales ratio: 1.7; Dividend yield: 1.0%; TSINetwork Rating: Average; www.suncor.com) became Canada’s largest oil company when it merged with Petro-Canada in August 2009. About 50% of Suncor’s production is conventional oil and natural gas. The remaining 50% comes from oil sands, including the company’s 12% stake in the massive Syncrude development. Suncor aims to expand its oil-sands operations until they account for about 70% of its production....

SAPUTO INC. $40 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 204.6 million; Market cap: $8.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.saputo.com) earned $0.54 a share in its third quarter, which ended December 31, 2010. That’s up 8.0% from $0.50 a year earlier. Revenue rose 3.0%, to $1.54 billion from $1.48 billion. The improved results were mainly due to higher cheese sales and prices in the U.S. As well, the company raised its selling price for milk in Argentina. However, a third of Saputo’s revenue comes from outside Canada. The Canadian dollar’s strength against the U.S. dollar and the Argentinian peso hurt the contribution of Saputo’s international sales. Saputo is a buy.

INDIGO BOOKS & MUSIC INC. $15 (Toronto symbol IDG; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 24.7 million; Market cap: $370.5 million; Price-to-sales ratio: 0.4; Dividend yield: 2.9%; TSINetwork Rating: Average; www.chapters.indigo.ca) is now selling its Kobo e-book reader through Future Shop and Best Buy stores across Canada. Selling the Kobo through other retailers should spur greater demand for Indigo’s e-book downloads. However, the device faces rising price competition from other e-book readers, and from Apple’s iPad tablet computer. Indigo is a hold.

These two former income trusts recently converted to corporations in response to Ottawa’s tax on income-trust distributions. That means they must now pay corporate taxes. Even so, their high payouts (which are now dividends) seem secure. PENGROWTH ENERGY CORP. $12 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 326.0 million; Market cap: $3.9 billion; Price-to-sales ratio: 2.4; Dividend yield: 7.0%; TSINetwork Rating: Average; www.pengrowth.com) is the new name of Pengrowth Energy Trust. It produces oil and natural gas from properties in Alberta, B.C. and Saskatchewan. Pengrowth also holds interests in other energy projects, such as its 8.4% stake in the Sable Offshore Energy Project, which operates three offshore-drilling platforms south of Nova Scotia. Roughly 60% of the company’s production is natural gas. The remaining 40% is oil. Low gas prices have hurt Pengrowth’s earnings and held back its cash flow. However, it has locked in prices for 23% of its 2011 daily production at $5.72 per thousand cubic feet. That’s higher than today’s price of $4.30. Pengrowth focuses on proven properties with large reserves and predictable production. That helps cut its risk....

FORTIS INC. $34 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 173.6 million; Market cap: $5.9 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.fortisinc.com) has formed a joint venture with a company controlled by Native bands in Ontario. Fortis will own 51% of this new company, which will build and operate power-transmission projects. Teaming up with these Native groups gives Fortis exclusive access to certain areas near Lake Huron. That should give it an edge over competing power-transmission proposals. Fortis is a buy.

Nordion and Gennum both face challenges that could hold back their short-term growth. However, both are leaders in their niche markets. That enhances their long-term prospects. NORDION INC. $11 (Toronto symbol NDN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 67.2 million; Market cap: $739.2 million; Price-to-sales ratio: 4.1; Dividend yield: 3.6%; TSINetwork Rating: Extra Risk; www.nordion.com) supplies medical isotopes for cancer detection and research. It also makes products that sterilize surgical tools and food. Nordion gets most of its isotopes from the aging Chalk River nuclear reactor near Ottawa. Atomic Energy of Canada Ltd., which operates the reactor, had to shut it down in May 2009 to fix a water leak. Atomic Energy restarted the reactor in August 2010. The shutdown cut Nordion’s gross earnings by $4 million a month (all amounts except share price and market cap in U.S. dollars)....

TIM HORTONS INC. $41 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 173.0 million; Market cap: $7.1 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.3%; TSINetwork Rating: Average; www.timhortons.com) will make its first expansion outside North America under a new deal with Dubai-based Apparel Group. Under the terms, Apparel will open up to 120 Tim Hortons coffee-and-donut shops in the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman in the next five years. Apparel will also operate the outlets. Teaming up with well-established local companies like Apparel Group cuts the risk of expanding internationally. Tim Hortons is a buy.