price to sales ratio

FORD MOTOR CO. $13 (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 3.4 billion; Market cap: $44.2 billion; Price-to-sales ratio: 0.4; No dividends paid since June 2006; WSSF Rating: Speculative) earned $2.6 billion in the three months ended June 30, 2010. That’s up 14.9% from $2.3 billion a year earlier. However, earnings per share fell 11.6%, to $0.61 from $0.69, on more shares outstanding. Revenue rose 16.8%, to $31.3 billion from $26.8 billion. The company sold 1.4 million cars and trucks during the quarter, up 18.8% from 1.2 million a year earlier. However, high U.S. unemployment could slow Ford’s sales in the second half of 2010. Ford is a hold.

C.R. BARD INC. $78 (New York symbol BCR; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 95.1 million; Market cap: $7.4 billion; Price-to-sales ratio: 2.9; Dividend yield: 0.9%; WSSF Rating: Above Average) is seeing rising demand for its medical devices, particularly in emerging markets. The higher demand helped push up Bard’s earnings by 7.9% in the three months ended June 30, 2010, to $134.0 million from $124.2 million a year earlier. Earnings per share rose 13.0%, to $1.39 from $1.23, on fewer shares outstanding. These figures exclude unusual items, including a writedown of funds that Bard is owed by Greek public hospitals. Sales rose 7.9%, to $673.9 million from $624.6 million. The company has completed its $200-million purchase of California-based SenoRx Inc., which makes devices that help diagnose and treat breast cancer. The cost of integrating SenoRx will probably lower Bard’s 2010 earnings by $0.03 to $0.06 a share. However, SenoRx will add around $56 million to Bard’s annual revenue, and the purchase looks like a good fit with Bard’s current cancer-treatment products....

LIZ CLAIBORNE INC. $4.76 (New York symbol LIZ; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 94.5 million; Market cap: $449.8 million; Price-to-sales ratio: 0.2; No dividends paid since December 2008; WSSF Rating: Extra Risk) will close its 87 “Liz Claiborne” outlet stores over the next few months. These stores sell heavily discounted clothing and accessories. The company has sold many of its less-profitable brands over the past few years. As well, it has signed exclusive deals that let it sell its clothing through other retailers. These moves have left the Liz Claiborne outlet stores with less merchandise to sell. The company will likely record a $7-million non-cash charge for writedowns of goodwill and other intangible assets. It lost $35.9 million, or $0.38 a share, in the first quarter of 2010. The company also expects cash charges to terminate leases and pay severance to employees. It will finalize these charges in the next few weeks....

GENERAL MILLS INC. $35 (New York symbol GIS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 651.2 million; Market cap: $22.8 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.2%; WSSF Rating: Above Average) is the second-largest maker of breakfast cereals in the U.S., after Kellogg. Its major brands include Cheerios, Wheaties and Total. The company also makes Progresso soups, Betty Crocker baking mixes, Green Giant canned vegetables and Yoplait yogurt. Over the past few years, General Mills has been working on increasing its international sales. It now gets roughly 20% of its sales from overseas. The company is also successfully developing healthier products, such as low-salt soups. It typically spends around 2% of its sales on developing new products.

Strong history of rising sales, earnings

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BCE faces strong competition from cable companies and new wireless providers. However, a major cost-cutting drive has freed up cash for new investments in its networks. These savings also give BCE room for dividend increases, share buybacks and other moves that can pay off for investors. BCE INC. $32 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 763.0 million; Market cap: $24.4 billion; Price-to-sales ratio: 1.4; Dividend yield: 5.4%; SI Rating: Above Average) is Canada’s largest provider of telephone, Internet and wireless services. The company’s main subsidiary, Bell Canada, has 6.8 million residential and business customers in Ontario and Quebec. BCE sells wireless services to 6.9 million subscribers across Canada. As well, it has 2.1 million high-speed Internet customers and 2.0 million satellite-TV subscribers....

TORONTO-DOMINION BANK $72 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 868.2 million; Market cap: $62.5 billion; Price-to-sales ratio: 2.5; Dividend yield: 3.4%; SI Rating: Above Average) is expanding its commodity-related operations. This puts it in a position to profit from the rise in commodity prices that’s likely as the economy recovers. TD recently paid an undisclosed sum for Ross Smith Sousa Advisors Ltd., a Calgary-based firm that advises oil and gas producers on asset purchases and sales. Canada is likely to attract more foreign investment of all kinds in the next few years, due to our (relatively) strong national finances and the strength of the Canadian dollar. That’s especially likely in oil and gas, now that the BP oil spill has spurred demands for a stronger regulatory climate in the U.S....

BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $26 (Toronto symbol BA.UN, Conservative Growth Portfolio, Utilities sector; Units outstanding: 127.3 million; Market cap: $3.3 billion; Price-to-sales ratio: 1.0; Dividend yield: 11.2%; SI Rating: Above Average) will convert to a dividend-paying corporation on January 1, 2011. That’s when Ottawa will start taxing income-trust distributions. Investors will receive one common share of the company for each trust unit they hold. As part of the conversion, the trust will change its name to “Bell Aliant Inc.” It will also change its trading symbol to “BA”. The trust will continue to pay monthly distributions of $0.2417 a unit until just after its conversion. The current annual rate of $2.90 yields 11.2%. Starting in March 2011, Bell Aliant will change the rate and frequency of its payout: It will switch to quarterly dividends of $0.475 a share. The new annual rate of $1.90 would yield a high 7.3%, based on today’s price. As well, investors who hold Bell Aliant outside an RRSP will benefit from the dividend tax credit. Bell Aliant is a buy.

The BP oil spill in the Gulf of Mexico will probably lead to greater regulation of offshore drilling. Because of the extra costs, energy-exploration firms may turn their attention to safer onshore oil and natural-gas deposits, like Canada’s oil sands. That would help these three companies, which supply equipment and services to oil-sands producers. However, only two are buys right now. SNC-LAVALIN GROUP INC. $45 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $6.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.5%; SI Rating: Average) is a leading Canadian engineering and construction company. SNC designs and builds large public-works projects, such as roads, bridges, transit systems and water-treatment plants. It also builds mines, chemical plants and electrical power systems. Petroleum and chemical projects accounted for 14% of SNC’s 2009 revenue. Last year, the company designed a new steam-assisted gravity-drainage system for Husky Energy Inc.’s Sunrise oil-sands project. This technology injects steam into a well to loosen the heavy oil and make it easier to pump to the surface. SNC is working on similar systems for oil-sands projects jointly owned by Teck Resources Ltd. and UTS Energy Corp....

PRECISION DRILLING CORP. $7.33 (Toronto symbol PD; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 275.6 million; Market cap: $2.0 billion; Price-to-sales ratio: 1.8; No dividends paid since February 2009; SI Rating: Extra Risk) provides contract-drilling services, so it should also benefit from more onshore exploration in the wake of the BP oil spill. It owns 352 land-based rigs in Canada, the U.S. and Mexico. The company also recently renegotiated some of the loans it used to buy U.S.-based contract driller Grey Wolf Inc. in 2008. That will cut its annual interest costs by $15 million. Precision earned $62.0 million, or $0.22 a share, in the first three months of 2010. Precision Drilling is a buy.

TRANSALTA CORP. $21 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 218.6 million; Market cap: $4.6 billion; Price-to-sales: ratio: 1.7; Dividend yield: 5.5%; SI Rating: Average) is working on Project Pioneer, which will capture and store carbon emissions from its coal-fired power plants in Alberta. The company plans to sell the reclaimed carbon to oil producers, who would use it to extract more oil. Enbridge Inc. (Toronto symbol ENB) recently agreed to participate in Project Pioneer. Enbridge’s pipeline and carbon-sequestration expertise should help ensure the project’s success. TransAlta is a buy.