price to sales ratio

FPL GROUP INC. $52 (New York symbol FPL; Income Portfolio, Utilities sector; Shares outstanding: 408.9 million; Market cap: $21.3 billion; Price-to-sales ratio: 1.3; WSSF Rating: Average) operates through two wholly owned subsidiaries. Florida Power and Light Company (which accounted for 71% of FPL Group’s 2008 revenue and 46% of its earnings) is a regulated utility with 4.5 million electricity customers in eastern and southern Florida. This subsidiary’s power stations operate under some form of government regulation. This limits the prices Florida Power and Light can charge, but it also provides steady revenue streams. FPL Group also owns NextEra Energy Resources, which operates unregulated electrical-power projects in Canada and 16 U.S. states. NextEra is the leading producer of wind power in the U.S., with 25% of the country’s total wind-power capacity....

MOLSON COORS CANADA INC. (Toronto symbols TPX.A $44 and TPX.B $43; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 183.8 million; Market cap: $8.1 billion; Price-to-sales ratio: 1.3; SI Rating: Average) is the world’s fifth-largest brewer by volume. Top brands include Coors Light, Molson Canadian and Carling. Molson Coors Canada took its present form in February 2005 when Molson Inc. and Adolph Coors Co. merged. Canadian shareholders received exchangeable shares of Molson Coors Canada for their Molson shares. These shares carry the same voting and dividend rights as the U.S.-based parent company’s common shares....

CAE INC. $7.00 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 254.9 million; Market cap: $1.8 billion; Price-to-sales ratio: 1.1; SI Rating: Average) is slowly expanding its sales outside the cyclical airline industry. It has won a 20-year, $329.5-million contract to build helicopter simulators and train pilots for Canada’s Department of National Defence. To put the contract in context, CAE’s annual revenue is about $1.4 billion. CAE has also teamed up with the Michener Institute for Applied Health Sciences in Toronto, the Universite de Montreal and the Winnipeg Regional Health Authority to develop medical simulators that will help train doctors to perform surgical procedures. CAE stands to make just $5 million from the deal, but the company feels that medical simulators could soon account for 10% of its sales. CAE is a buy....

SNC-LAVALIN GROUP INC. $31 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151 million; Market cap: $4.7 billion; Price-to-sales ratio: 0.6; SI Rating: Average) reported much higher earnings in 2008: $2.05 a share (or a total of $312.5 million), compared to $0.45 a share (or $69.1 million) in 2007. The gain was mostly because of a $267.3-million, pre-tax operating loss at the engineering firm’s electrical-power division that depressed SNC’s 2007 earnings. The loss was caused by delays in building a new power plant in Brampton, Ontario. SNC’s revenue rose 5.6%, to $7.1 billion from $6.7 billion. Its order backlog stands at $9.6 billion, down 9.4% from $10.6 billion a year earlier. Thanks to the improved earnings, SNC raised its quarterly dividend by 25%, to $0.15 a share from $0.12. The new annual rate of $0.60 yields 1.9%. SNC expects its 2009 earnings will grow to $2.25 a share, and the shares now trade at 13.8 times this estimate. However, SNC’s projection may be overly optimistic. Oil and mining companies account for 30% of SNC’s revenue, and many could cancel their contracts if resource prices remain low....

FINNING INTERNATIONAL INC. $11 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 170.5 million; Market cap: $1.9 billion; Price-to-sales ratio: 0.3; SI Rating: Above Average) sells, rents and repairs heavy equipment made by Caterpillar Inc. It has major customers in the mining, forest products and construction industries. Finning’s revenue rose 5.8% in 2008, to $6 billion from $5.7 billion in 2007. Finning’s clients ordered more heavy equipment in the first half of the year as a result of high commodity prices. Finning’s operations in the U.K. and South America account for roughly 45% of its sales, and the drop in the Canadian dollar in the last quarter of 2008 increased the contribution from these divisions. Finning is responding to the global recession by cutting jobs. If you exclude costs related to this, and a writedown of goodwill, earnings fell 11.7%, to $247.4 million from $280.1 million. Earnings per share fell 7.7%, to $1.43 from $1.55 on fewer shares outstanding....

Finning and SNC-Lavalin sell equipment and services to clients in the resource industry. Both companies have seen their shares fall over the past few months in light of dropping oil and metals prices. Both also stand to gain from increasing government spending on infrastructure. We continue to have a high opinion of both, but we prefer Finning because of its lower p/e ratio and higher dividend yield. FINNING INTERNATIONAL INC. $11 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 170.5 million; Market cap: $1.9 billion; Price-to-sales ratio: 0.3; SI Rating: Above Average) sells, rents and repairs heavy equipment made by Caterpillar Inc. It has major customers in the mining, forest products and construction industries. Finning’s revenue rose 5.8% in 2008, to $6 billion from $5.7 billion in 2007. Finning’s clients ordered more heavy equipment in the first half of the year as a result of high commodity prices. Finning’s operations in the U.K. and South America account for roughly 45% of its sales, and the drop in the Canadian dollar in the last quarter of 2008 increased the contribution from these divisions....

RIOCAN REAL ESTATE INVESTMENT TRUST $12 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 222 million; Market cap: $2.7 billion; Price-to-sales ratio: 3.7; SI Rating: Average) is Canada’s largest real estate investment trust (REIT). It owns 241 retail properties, including 16 under development. RioCan specializes in “Big Box” outdoor malls. Most are in suburban areas where land costs are generally lower than in more developed towns and cities. RioCan’s exposure to the retail industry increases its risk, particularly during a recession. However, its anchor tenants, like Wal-Mart, Cineplex and Metro, tend to do well when the economy is slow. In 2008, RioCan’s revenue rose 6.1%, to $763.8 million from $719.9 million in 2007. Earnings soared 354%, to $146.9 million from $32.4 million. However, this was mainly because RioCan’s 2007 earnings included a $144-million, non-cash charge related to a change in the way Ottawa taxes REITs. In April 2008, RioCan also issued $144 million of new units to pay down debt. As a result, earnings per unit rose 318.8%, to $0.67 from $0.16. Cash flow per unit fell 2%, to $1.48 from $1.51....

IMPERIAL OIL LTD. $42 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; Shares outstanding: 859.4 million; Market cap: $36.1 billion; Price-to-sales ratio: 1.2; SI Rating: Average) had proven oil reserves of roughly 2.3 billion barrels at the end of 2008. This is a 50% increase over 2007. Imperial’s new Kearl Lake oil-sands project, which added 800,000 barrels to the total, is the main reason for the rise. Kearl Lake should begin operating in 2012. At its current production rates, Imperial’s reserves should last 25 years. This cuts its risk. Another hidden asset is Imperial’s refinery operations, which accounted for 23% of its 2008 earnings. They need oil to make gasoline, so they profit from cheap oil prices. Imperial Oil is a buy.

GENNUM CORP. $3.65 (Toronto symbol GND; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.4 million; Market cap: $129.2 million; Price-to-sales ratio: 0.8; SI Rating: Above Average) continues to spend a high 25% of its revenue on research. This hurts its earnings, but often leads to breakthroughs that help Gennum keep its lead in the niche video-storage and transmission market. For example, Gennum has developed a new way to transmit high-definition video signals over standard coaxial television cable. Most closed-circuit video surveillance systems use these cables, so Gennum’s technology will let businesses improve the quality of these signals without buying special high-definition video cables. Gennum is a buy.

MANITOBA TELECOM SERVICES INC. $33 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 64.6 million; Market cap: $2.1 billion; Price-to-sales ratio: 1.1; SI Rating: Average) has over 1.2 million telephone and wireless customers in Manitoba. It also owns Allstream, which provides integrated telephone, Internet and other communication services to businesses across Canada. Allstream accounted for 57% of Manitoba Telecom’s 2008 revenue, but just 37% of its profit. Manitoba Telecom is launching new services, which are helping it hang on to its telephone customers. For example, its TV service, which uses high-speed Internet technology to send signals over regular phone lines, now has 34% of the Winnipeg market, up from 32% a year earlier. Manitoba Telecom’s 2008 revenue rose 0.8%, to $1.92 billion from $1.9 billion in 2007. Strong demand for wireless, Internet and TV services was entirely responsible for the gain; Allstream’s revenues were flat. Manitoba Telecom’s earnings per share dropped 14.2%, to $2.23 from $2.60. If you disregard unusual items, including a $0.28 per share charge related to last year’s purchase of new wireless frequencies, per-share earnings rose 3.1%, to $2.98 from $2.89....