price to sales ratio

GREAT-WEST LIFECO INC. $25 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 944.3 million; Market cap: $23.6 billion; Price-to-sales ratio: 1.0; SI Rating: Above Average) is Canada’s largest insurance company, with $441.9 billion of assets under administration. Great-West also provides retirement-planning and wealth-management services. It gets about 60% of its earnings from Canada, followed by Europe (25%) and the United States (15%). Power Financial Corp. (Toronto symbol PWF) owns 68.7% of Great-West’s shares. In August 2007, Great-West bought Putnam Investments Trust, a leading U.S. mutual-fund company. Great-West paid just $4.2 billion, even though Putnam had $182 billion U.S. in assets under administration. That’s because Putnam was coming off a mutual-fund trading scandal that spurred a wave of investor redemptions. Putnam’s assets have since dropped to $108 billion U.S., largely because of falling stock prices. Still, the purchase gave Great-West access to Putnam’s large client base. In the three months ended June 30, 2009, Great-West’s earnings fell 26.8%, to $413 million from $564 million a year earlier. In response to last year’s financial-market turmoil, the company sold $1 billion worth of common shares to shore up its already strong balance sheet. As a result, earnings per share in the latest quarter fell 30.2%, to $0.44 from $0.63....

HOME CAPITAL GROUP INC. $37 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.4 million; Market cap: $1.3 billion; Price-to-sales ratio: 2.5; SI Rating: Average) is the parent of Home Trust Company, a federally regulated trust company that specializes in issuing residential first mortgages and credit cards to borrowers who don’t meet the higher standards of larger, traditional lenders. Home Capital issued $1.3 billion worth of new residential mortgages in the three months ended June 30, 2009. That’s up 82.2% from the prior quarter. The gain is mainly because low interest rates helped improve housing markets in Ontario and Quebec. However, the company issued just $23.3 million of new non-residential mortgages, a 34.5% drop from the prior quarter. Because of the higher volumes, Home Capital’s revenue rose 7.8%, to $121.8 million from $113 million a year earlier. Earnings jumped 29.4%, to $34.4 million, or $0.99 a share, from $26.6 million, or $0.76 a share....

IGM FINANCIAL INC. $43 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 264.1 million; Market cap: $11.4 billion; Price-to-sales ratio: 4.7; SI Rating: Above Average) is Canada’s largest independent mutual-fund company, with $112.3 billion in assets under management. Power Financial owns 56.4% of IGM. IGM operates through two main divisions. Investors Group sells funds through its own network of 4,500 advisors. Mackenzie Financial sells its funds through independent brokers. In June, IGM purchased the 27.6% of Investment Planning Counsel (IPC) that it did not already own. IPC’s 700 advisors provide wealth-management services. IGM paid a total of $42.4 million, which consisted of $1.7 million in cash and $40.7 million in common shares. IGM will keep operating IPC separately, and will not merge it with Investors Group or Mackenzie....

TIM HORTONS INC. $32 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 180.7 million; Market cap: $5.8 billion; Price-to-sales ratio: 2.7; SI Rating: Average) will start selling ice cream at six more of its Canadian coffee-and-donut stores following strong initial demand at six test outlets in southern Ontario....

PENGROWTH ENERGY TRUST $9.27 (Toronto symbol PGF.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 258.4 million; Market cap: $2.4 billion; Price-to-sales ratio: 1.0; SI Rating: Average) saw its cash flow per unit fall 48.1% in the three months ended June 30, 2009, to $0.56 from $1.08 a year earlier. Despite hedging gains, Pengrowth’s average realized selling price for its oil and gas fell by 39%. This was the main reason for the lower cash flow per unit. The trust’s monthly distribution of $0.10 a unit (for an annual yield of 12.9%) accounted for just 54% of its cash flow, so it seems safe for now. Pengrowth is a buy.

SHAWCOR LTD. $24 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.4 million; Market cap: $1.7 billion; Price-to-sales ratio: 1.2; SI Rating: Average) makes sealants and coatings that protect onshore and offshore oil and natural-gas pipelines from corrosion. This business supplies 90% of its revenue. The remaining 10% comes from making industrial equipment, such as electrical wire and protective sheaths. In the three months ended June 30, 2009, ShawCor’s revenue rose 6.0%, to $312.8 million from $295.1 million a year earlier. Overseas customers account for 75% of its revenue, so the company benefitted from a lower Canadian dollar. As well, it prices most of its contracts in U.S. dollars. As a result of these two factors, favourable foreign-exchange rates added $25.1 million to ShawCor’s revenue in the latest quarter. Earnings in the quarter jumped 92.7%, to $34.3 million, or $0.49 a share, from $17.8 million, or $0.25 a share, a year earlier. ShawCor has upgraded its plants over the past few years, and these improvements have lowered its operating costs. Falling prices for raw materials, such as plastic resins, steel and copper, have also helped ShawCor increase its earnings....

EMERA INC. $21 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 112.4 million; Market cap: $2.4 billion; Price-to-sales ratio: 1.7; SI Rating: Average) has expanded beyond Nova Scotia in the past few years. The company supplies 95% of that province’s electrical power. For example, Emera will pay $27.6 million for 9.9% of Algonquin Power Income Fund (Toronto symbol APF.UN). Algonquin owns or has interests in 41 hydroelectric facilities in Canada and the U.S. Separately, Emera and Algonquin have formed a 50/50 joint venture that will pay $116 million U.S. for a power generation and distribution business in Lake Tahoe, California. After these transactions close in 2010, they should add $6 million to $7 million to Emera’s annual earnings. Meanwhile, Emera earned $38.1 million, or $0.33 a share, in the second quarter of 2009. That’s down 11.2% from $42.9 million, or $0.37 a share, a year earlier. Under a new arrangement with Nova Scotia power regulators, Emera incurred an extra $16.3 million of fuel expenses in the quarter. However, the deal also let it increase power rates, which will help it recover most of these extra costs. Revenue by 5.2%, to $334.2 million from $317.6 million....

FORTIS INC. $25 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 170.3 million; Market cap: $4.3 billion; Price-to-sales ratio: 1.1; SI Rating: Above Average) gets just 15% of its revenue from Newfoundland Power, its original business. In the past few years, the company has bought electrical utilities in four other Canadian provinces, as well as the U.S. and Caribbean. However, about half of its revenue now comes from Terasen Inc., which distributes natural gas in British Columbia. The company paid $3.7 billion for Terasen in May 2007. In the three months ended June 30, 2009, Fortis’s earnings jumped 82.8%, to $53 million, or $0.31 a share, from $29 million, or $0.18 a share, a year earlier. If you exclude one-time charges in the year-earlier quarter, earnings would have risen 20.5%. Terasen contributed $14 million to the latest earnings. Revenue fell 11.1%, to $754 million from $848 million. The drop was largely because of warmer-than-usual spring weather, which hurt natural-gas demand at Terasen. The stock trades at 16.7 times Fortis’s projected 2009 earnings of $1.50 a share. That’s a higher p/e ratio than other utilities, but still reasonable in light of Fortis’s high-quality operations and geographic diversity. The $1.04 dividend yields 4.2%....

Fortis and Emera have used the steady cash flow from their power utilities in Atlantic Canada to fund new investments in other businesses. These have helped expand their operations beyond a single region, and enhanced their growth prospects. FORTIS INC. $25 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 170.3 million; Market cap: $4.3 billion; Price-to-sales ratio: 1.1; SI Rating: Above Average) gets just 15% of its revenue from Newfoundland Power, its original business. In the past few years, the company has bought electrical utilities in four other Canadian provinces, as well as the U.S. and Caribbean. However, about half of its revenue now comes from Terasen Inc., which distributes natural gas in British Columbia. The company paid $3.7 billion for Terasen in May 2007. In the three months ended June 30, 2009, Fortis’s earnings jumped 82.8%, to $53 million, or $0.31 a share, from $29 million, or $0.18 a share, a year earlier. If you exclude one-time charges in the year-earlier quarter, earnings would have risen 20.5%. Terasen contributed $14 million to the latest earnings. Revenue fell 11.1%, to $754 million from $848 million. The drop was largely because of warmer-than-usual spring weather, which hurt natural-gas demand at Terasen....

ANDREW PELLER LTD. $7.90 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $117.7 million; Price-to-sales ratio: 0.4; SI Rating: Above Average) reported that its sales in its first fiscal quarter, which ended June 30, 2009, rose 13.8%, to $70.2 million from $61.6 million a year earlier....