price to sales ratio

NEWMONT MINING CORP. $61 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 493.1 million; Market cap: $30.1 billion; Price-to-sales ratio: 3.2; Dividend yield: 1.0%; TSINetwork Rating: Average; www.newmont.com) is one of the world’s largest gold-mining companies. Newmont has major mines in the U.S., Australia and Peru. Gold accounts for about 85% of Newmont’s revenue. The remaining 15% comes from copper, zinc and other metals. Most of Newmont’s copper comes from its 35.4% stake in the large Batu Hijau mining complex in Indonesia. Gold has jumped 35%, from $1,062 an ounce in February 2010 to a new all-time high of $1,433 in December 2010. Newmont prefers to sell its gold at the market price instead of through long-term hedging contracts that lock in prices. This policy has helped it take full advantage of rising gold prices....

BHP BILLITON LTD. ADRs $89 (New York symbol BHP; Conservative Growth Portfolio, Resources sector; ADRs outstanding: 2.8 billion; Market cap: $249.2 billion; Price-to-sales ratio: 4.7; Dividend yield: 2.0%; TSINetwork Rating: Average; www.bhpbilliton.com) is the world’s largest mining company, with major operations in Australia, South Africa, Chile and the U.K. It produces iron ore, coal, oil, aluminum, manganese, diamonds and titanium. Regulators in Australia and Canada have recently forced the company to cancel two big deals. In October 2010, BHP called off its plan to merge its iron-ore operations in Australia with those of Rio Tinto Ltd. (New York symbol RIO)....

BROADRIDGE FINANCIAL SOLUTIONS INC. $22 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 125.0 million; Market cap: $2.8 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.7%; TSINetwork Rating: Average; www.broadridge.com) provides communication, processing and other services to the investment industry. These services help its customers cut costs and focus on their core businesses. Broadridge’s clients include 250 banks, 500 mutual-fund families and over 5,000 publicly traded companies. The company gets roughly 75% of its revenue from its Investor Communication Solutions division, which distributes proxy materials, including ballots, to investors in stocks and mutual funds. It then counts the votes. Broadridge’s ProxyEdge software helps centralize and simplify shareholder voting, particularly if a meeting involves multiple ballots. Broadridge mails and processes two-thirds of all proxy votes in the U.S....

Broadridge began trading on April 2, 2007, after former parent Automatic Data Processing Inc. (ADP) distributed its shares to its own stockholders as a special dividend, or “spinoff.” Like many spinoffs, Broadridge struggled at first. That’s partly because many ADP shareholders quickly sold their new shares. As well, institutional investors often ignore companies with smaller market caps (or the total value of shares outstanding). Broadridge later went into a deep slump over fears of big losses at its securities-clearing division during the 2008 credit crisis. However, as we’ve often pointed out, most spinoffs go on to produce above-average results over a period of years. Broadridge has rebounded strongly, partly because it decided to focus on helping companies communicate with their shareholders, which is less risky than securities clearing. Plus, it is using its improving earnings to buy other related firms and assets that will pay off for years to come....

Commodities like gold and copper provide a hedge against inflation. But even if inflation stays low, commodity prices are likely to keep rising as rapid economic growth in Asia and South America spurs new construction and car sales. That will help BHP, Newmont and Alcoa. All three are high-quality, well-established resource stocks that have jumped lately. Still, we see only two as buys right now. BHP BILLITON LTD. ADRs $89 (New York symbol BHP; Conservative Growth Portfolio, Resources sector; ADRs outstanding: 2.8 billion; Market cap: $249.2 billion; Price-to-sales ratio: 4.7; Dividend yield: 2.0%; TSINetwork Rating: Average; www.bhpbilliton.com) is the world’s largest mining company, with major operations in Australia, South Africa, Chile and the U.K. It produces iron ore, coal, oil, aluminum, manganese, diamonds and titanium. Regulators in Australia and Canada have recently forced the company to cancel two big deals....

PHILIPS ELECTRONICS N.V. ADRs $30 (New York symbol PHG; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 946.0 million; Market cap: $28.4 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.0%; TSINetwork Rating: Average; www.philips.com) earned 0.55 euros per ADR in the three months ended September 30, 2010 (1 euro = $1.32 U.S.; each American Depositary Receipt represents one Philips common share.) That’s up 189.5% from 0.19 euros per ADR a year earlier. Sales rose 9.6%, to 6.2 billion euros from 5.6 billion euros. Philips had fewer restructuring and other unusual costs in the latest quarter. As well, all three of its businesses reported strong earnings gains: lighting (up 173.4%), health-care equipment (up 61.1%) and consumer products, such as TV sets (up 15.5%). Philips is a buy.

WAL-MART STORES INC. $54 (New York symbol WMT; Conservative Growth Portfolio: Consumer sector; Shares outstanding: 3.6 billion; Market cap: $194.4 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.walmart.com) is buying 51% of South Africa’s Massmart Holdings Ltd., which operates 288 department stores in 14 African countries. In September 2010, the company made a non-binding offer to buy all of Massmart. That gave Wal-Mart a chance to examine Massmart’s accounts before making a formal offer. Based on current exchange rates, Wal-Mart’s offer is worth roughly $2 billion. Wal-Mart held cash of $10.6 billion, or $2.96 a share, on October 31, 2010, so it can easily afford this purchase. Expanding internationally helps Wal-Mart offset slowing growth in the U.S. As well, the company’s retail expertise will make Massmart more profitable, and expand its market share as the South African economy recovers from the recession....

It has been a year since the old EnCana split itself into two new companies: the new Encana focuses on unconventional natural gas, and Cenovus Energy specializes in oil-sands projects. Encana is down slightly since the breakup, due to low natural-gas prices. However, Cenovus has gained 20%. We continue to see both stocks as buys for long-term gains. ENCANA CORP. $28 (New York symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $20.6 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.9%; TSINetwork Rating: Average; www.encana.com) is a leading North American natural-gas producer. It focuses on unconventional reserves, such as shale-gas deposits. (Shale gas is natural gas that is trapped in rock formations.)...

WEYERHAEUSER CO. $18 (New York symbol WY; Conservative Growth Portfolio, Resources sector; Shares outstanding: 535.9 million; Market cap: $9.6 billion; Price-to-sales ratio: 1.7; Dividend yield: 3.3%; TSINetwork Rating: Extra Risk; www.weyerhaeuser.com) will convert to a real estate investment trust in 2011. That will lower the tax it must pay on its six million acres of timberland. Following the conversion, Weyerhaeuser will pay a quarterly dividend of $0.15 a share, for a 3.3% annual yield. However, weak demand for new houses will continue to hurt lumber sales. Weyerhaeuser is a hold.

AT&T will probably lose its exclusive right to carry Apple’s popular iPhone when the contract expires in 2011. However, in countries where there is more than one iPhone carrier, the original carrier usually hangs on to most of its customers. We feel that rising demand for smartphones, including the iPhone, will continue to benefit both AT&T and Verizon. AT&T INC. $29 (New York symbol T; Income Portfolio, Utilities sector; Shares outstanding: 5.9 billion; Market cap: $171.1 billion; Price-to-sales ratio: 1.4; Dividend yield: 5.8%; TSINetwork Rating: Average; www.att.com) gets 48% of its revenue from its wireless division, which has 92.8 million customers nationwide. The company’s traditional telephone operations, which serve 43.7 million consumers and businesses in 22 states, account for 47% of its revenue and earnings. The remaining 5% comes from other operations, such as selling ads in telephone directories. AT&T sold a record 5.2 million iPhones in the third quarter of 2010. That’s up 61.6% from the second quarter. About 24% of these users are new customers for AT&T....