price to sales ratio

RIOCAN REAL ESTATE INVESTMENT TRUST $18 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 243.2 million; Market cap: $4.4 billion; Price-to-sales ratio: 5.7; Dividend yield: 7.7%; SI Rating: Average) continues to expand in the U.S. The trust recently formed a joint venture with Inland Western Retail Real Estate Trust, Inc. RioCan will own 80% of the new company, which will own eight malls in the Texas cities of Dallas, Houston and Austin. This investment will cost RioCan $138 million U.S., including $85.6 million U.S. of existing mortgages, which RioCan will assume. To put the price in context, RioCan earned $113.9 million (Canadian), or $0.49 a unit, in 2009. Like RioCan’s recent purchase of seven shopping centres in the northeastern U.S., grocery stores and pharmacies are the anchor tenants of these malls. That cuts the risk of this investment....

TIM HORTONS INC. $34 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 175.0 million; Market cap: $6.0 billion; Price-to-sales ratio: 2.7; Dividend yield: 1.5%; SI Rating: Average) has sold $200 million of seven-year notes. After commissions paid to underwriters, the company received $199.2 million. These new notes increased Tim Hortons’ total debt to around $611 million. Despite the increase, that’s still just 10% of its market cap. The company owns its main bakery through a joint venture with Swiss-based Aryzta AG. It is now negotiating to either sell its stake in this business to Aryzta, or buy out its partner. The cash from these new notes will help pay for this buyout, or help Tim Hortons build a new bakery....

LINAMAR CORP. $19 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.7 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.3%; SI Rating: Extra Risk) gets about 90% of its revenue by selling transmissions and other parts to carmakers. It also makes self-propelled, scissor-type elevating work platforms under the Skyjack name, plus consumer products, such as lawn mowers and cargo trailers. The company’s revenue rose 7.0%, from $2.2 billion in 2005 to $2.3 billion in 2007. However, its revenue fell 27.6%, to $1.7 billion, in 2009. That’s because the recession cut new-car demand. Linamar’s earnings rose 7.9%, from $101.0 million in 2005 to $109.0 million in 2007. Earnings per share rose 9.1%, from $1.43 in 2005 to $1.56 in 2007, on fewer shares outstanding. Earnings fell 48.6% to $56.0 million, or $0.84 a share, in 2008....

FPL GROUP INC. $48 (New York symbol FPL; Income Portfolio, Utilities sector; Shares outstanding: 414.7 million; Market cap: $19.9 billion; Price-to-sales ratio: 1.3; Dividend yield: 4.2%; WSSF Rating: Average) operates through two wholly owned subsidiaries. Florida Power and Light Company (which accounted for 73% of FPL Group’s 2009 revenue and 49% of its earnings) sells electricity to 4.5 million customers in eastern and southern Florida. This subsidiary’s power stations operate under some form of government regulation. That limits the prices Florida Power and Light can charge, but it also gives the company steady revenue streams. FPL Group also owns NextEra Energy Resources, which operates unregulated electrical-power projects in Canada and 26 U.S. states. NextEra mainly sells its power to other utilities, and is free to sell at the market price or under long-term contracts. In all, its projects generate 18,148 megawatts....

A number of “green” stocks have emerged in the past few years as concern over the environment has grown. However, most of these companies lose money. That’s because many green technologies are still in the concept or research stages. As well, many of these firms are heavily reliant on government subsidies, which could be cut as governments deal with their high deficits. FPL Group is an excellent example of a profitable, low-risk green stock. (To reflect its increasing focus on green power, it is assuming the name of its NextEra alternative-energy subsidiary.) Steady income from FPL’s regulated power operations in Florida helps offset its less-predictable wind and solar-power projects. As well, its expansion into other parts of North America cuts its reliance on a single region. To top it off, the company has a long history of raising its dividend....

NEWELL RUBBERMAID INC. $16 (New York symbol NWL; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 278.2 million; Market cap: $4.5 billion; Price-to-sales ratio: 0.8; Dividend yield: 1.3%; WSSF Rating: Average) makes plastic storage bins and other consumer items. Its top brands include Rubbermaid, Sharpie and Levolor. The company went through a deep setback in sales and earnings in 2008. In response, it closed plants, merged warehouses and sold low-margin businesses, particularly those whose products require large amounts of plastic resins. These resins come from oil, so selling these businesses cuts Newell’s sensitivity to volatile oil prices....

AMEREN CORP. $24 (New York symbol AEE; Income Portfolio, Utilities sector; Shares outstanding: 238.2 million; Market cap: $5.7 billion; Price-to-sales ratio: 0.8; Dividend yield: 6.4%; WSSF Rating: Average) sells electricity and natural gas to 3.4 million customers in Illinois and Missouri. In the three months ended March 31, 2010, Ameren’s earnings fell 16.7%, to $95 million from $114 million a year earlier. Earnings per share fell 25.9%, to $0.40 from $0.54, on more shares outstanding. These figures exclude unusual items, such as gains on fuel-hedging contracts. Revenue was unchanged at $1.9 billion. Colder-than-normal winter weather pushed up electricity demand. However, lower power prices at the company’s non-regulated plants offset gains at its regulated operations. That was the main reason for the lower earnings....

Consumer confidence is rising in the U.S., but the recovery remains fragile. To cut your risk, we look for consumer companies with well-known brands, like these three clothing retailers. Their strong brands should help them keep increasing sales, both in the U.S. and overseas. But only two are buys right now. LIMITED BRANDS INC. $24 (New York symbol LTD; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 323.4 million; Market cap: $7.8 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.5%; WSSF Rating: Average) operates two main retail chains: Victoria’s Secret (lingerie) and Bath & Body Works (soaps and bath oils). It also operates the La Senza lingerie chain in Canada and 30 other countries. Limited has introduced new products that are lifting its sales and increasing customer visits. As well, its Victoria’s Secret chain has introduced several low-priced items to attract cost-conscious shoppers....

NORDSTROM INC. $38 (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 218.9 million; Market cap: $8.3 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.1%; WSSF Rating: Average) earned $0.52 a share in its first quarter, which ended May 1, 2010. That’s up 40.5% from $0.37 a share a year earlier. The upscale retailer continues to do a good job of managing its inventory. That lowers the need for costly clearance sales. Sales rose 16.5%, to $2.1 billion from $1.8 billion. Same-store sales rose 12.0%. Nordstrom also raised its quarterly dividend by 25%, to $0.20 a share from $0.16. The new annual rate of $0.80 yields 2.1%. Nordstrom is a buy.

SONY CORP. ADRs $30 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.0 billion; Market cap: $30.0 billion; Price-to-sales ratio: 0.4; Dividend yield: 0.9%; WSSF Rating: Average) has teamed up with INTEL CORP. $21 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.6 billion; Market cap: $117.6 billion; Price-to-sales ratio: 3.1; Dividend yield: 3.0%; WSSF Rating: Above Average) and Internet search-engine provider Google Inc. (Nasdaq symbol GOOG). Under this new alliance, Sony will build television sets that use Intel’s chips and Google’s search and software expertise. The new sets will let viewers search and download videos from the Internet without an external computer. Sony will start selling the new sets in time for the 2010 Christmas shopping season. This alliance should give Sony a competitive advantage over other television makers. Sony is a buy....