price to sales ratio
FINNING INTERNATIONAL INC. $19 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 168.0 million; Market cap: $3.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.finning.com) sells and services Caterpillar-brand heavy equipment in Canada, South America and the U.K. Its main customers are in the oil, mining, forest-products and construction industries. The company continues to cut costs as low commodity prices hurt equipment demand. Finning recently announced plans to eliminate about 500 jobs by mid-2016. That’s in addition to the 1,900 workers, or 13% of its global workforce, laid off last year. Because of the moves, Finning has already reduced its annual expenses by $150 million, and expects higher savings this year....
POTASH CORP. OF SASKATCHEWAN $25 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 836.6 million; Market cap: $20.9 billion; Price-to-sales ratio: 3.5; Dividend yield: 5.6%; TSINetwork Rating: Average; www.potashcorp.com) continues to see weak demand and prices for its potash and other fertilizers. In response, the company will suspend production at two of its Saskatchewan mines for one month. That will reduce its 2016 output by 400,000 tonnes; in 2015, it sold 8.8 million tonnes. These latest closures are in addition to the company’s recent decision to shut down its potash mine in Picadilly, New Brunswick. Potash Corp. is still a hold.
These two leading food makers continue to benefit from the recent drop in the Canadian dollar, which enhances the value of their overseas sales. However, both trade at high multiples to their projected earnings. That could hurt their share prices if the dollar rebounds. SAPUTO INC. $40 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 392.9 million; Market cap: $15.7 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.4%; TSINetwork Rating: Average; www.saputo.com) is Canada’s largest producer of dairy products, including milk, butter and cheese. It also operates dairies in the U.S., Australia and Argentina. The company’s sales rose 2.8% in its fiscal 2016 third quarter, which ended December 31, 2015, to $2.9 billion from $2.8 billion a year earlier. It gets 65% of its sales from outside Canada, and the lower Canadian dollar added $261 million to the latest quarter’s sales. Lower selling prices for cheese and butter cut sales by $191 million....
SHAWCOR LTD. $28 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.5 million; Market cap: $1.8 billion; Price-to-sales ratio: 1.0; Dividend yield: 2.1%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and gas pipelines from rusting. It also makes electrical wire and protective sheaths. In 2015, its revenue fell 4.2%, to $1.8 billion from the $1.9 billion in 2014. That’s because weaker demand for its pipeline coating services offset the benefit of the low Canadian dollar. Favourable exchange rates added $106.5 million to ShawCor’s revenue in 2015. Earnings rose 3.6%, to $98.2 million from $94.9 million, thanks to fewer losses from its joint ventures. Due to more shares outstanding, per-share profits fell 0.7%, to $1.52 from $1.53. ShawCor’s backlog was $452 million at the end of 2015. Currently, it has $900 million worth of bids outstanding on new jobs. It also expects to bid on an additional $500 million worth of contracts. ShawCor’s strong reputation should continue to help it win bids....
TRANSCANADA CORP. $49 (Toronto symbol TRP; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 702.3 million; Market cap: $34.4 billion; Price-to-sales ratio: 3.1; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.transcanada.com) has cancelled its contracts to buy electricity from three coal-fired power plants in Alberta. That’s because higher costs to comply with the province’s new carbon taxes and emission controls have hurt the profitability of these deals. As a result, TransCanada will record a non-cash, after-tax charge of $175 million. That’s equal to 10% of its 2015 earnings of $1.8 billion, or $2.48 a share. However, cancelling these deals will improve its cash flow and earnings. TransCanada is a buy.
LOBLAW COMPANIES LTD. $71 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 410.1 million; Market cap: $29.1 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.4%; TSINetwork Rating: Above Average; www.loblaw.ca) purchased the Shoppers Drug Mart chain in March 2014 for $12.3 billion in cash and shares. The company now operates over 1,100 supermarkets and 1,300 drug stores across Canada. Thanks to its purchase of Shoppers, Loblaw’s sales have jumped 45.3%, from $31.3 billion in 2011 to $45.4 billion in 2015. Earnings fell 13.9%, from $2.88 a share (or a total of $811 million) in 2011 to $2.48 a share (or $696 million) in 2013. With the addition of Shoppers, earnings rose to $3.06 a share (or $1.2 billion) in 2014 and $3.46 a share (or $1.4 billion) in 2015....
SUNCOR ENERGY INC. $35 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $52.5 billion; Price-to-sales ratio: 1.8; Dividend yield: 3.3%; TSINetwork Rating: Average; www. suncor.com) has now acquired 84.2% of Canadian Oil Sands (Toronto symbol COS). That firm owns 36.74% of the Syncrude oil sands project in northern Alberta. The takeover gives Suncor 48.74% of Syncrude, and allows it to improve the project’s efficiency and profits. Under the terms of its takeover offer, Canadian Oil Sands investors each received 0.28 of a Suncor share for every share they own. If you include Canadian Oil Sands’ debt, the deal is worth $6.6 billion. Suncor expects to acquire the remaining shares in the next few weeks. Suncor is a buy....
SHAWCOR LTD. $28 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.5 million; Market cap: $1.8 billion; Price-to-sales ratio: 1.0; Dividend yield: 2.1%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and gas pipelines from rusting. It also makes electrical wire and protective sheaths. In 2015, its revenue fell 4.2%, to $1.8 billion from the $1.9 billion in 2014. That’s because weaker demand for its pipeline coating services offset the benefit of the low Canadian dollar. Favourable exchange rates added $106.5 million to ShawCor’s revenue in 2015. Earnings rose 3.6%, to $98.2 million from $94.9 million, thanks to fewer losses from its joint ventures. Due to more shares outstanding, per-share profits fell 0.7%, to $1.52 from $1.53. ShawCor’s backlog was $452 million at the end of 2015. Currently, it has $900 million worth of bids outstanding on new jobs. It also expects to bid on an additional $500 million worth of contracts. ShawCor’s strong reputation should continue to help it win bids....
LOBLAW COMPANIES LTD. $71 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 410.1 million; Market cap: $29.1 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.4%; TSINetwork Rating: Above Average; www.loblaw.ca) purchased the Shoppers Drug Mart chain in March 2014 for $12.3 billion in cash and shares. The company now operates over 1,100 supermarkets and 1,300 drug stores across Canada. Thanks to its purchase of Shoppers, Loblaw’s sales have jumped 45.3%, from $31.3 billion in 2011 to $45.4 billion in 2015. Earnings fell 13.9%, from $2.88 a share (or a total of $811 million) in 2011 to $2.48 a share (or $696 million) in 2013. With the addition of Shoppers, earnings rose to $3.06 a share (or $1.2 billion) in 2014 and $3.46 a share (or $1.4 billion) in 2015....
NEWELL RUBBERMAID INC. $38 (New York symbol NWL; Aggressive Growth and Income Portfolios, Consumer sector; Shares outstanding: 267.1 million; Market cap: $10.1 billion; Price-to-sales ratio: 1.7; Dividend yield: 2.0%; TSINetwork Rating: Average; www.newellrubbermaid.com) makes plastic storage bins, tools, pens and many other household goods. Its main brands include Sharpie markers, Parker and Paper Mate pens, Calphalon cookware, Irwin tools and Graco car seats and strollers. Newell is up 26.7% since we named it our Stock of the Year for 2014 at $30. That’s mainly because of its successful multi-year cost-cutting plan, which included closing plants and merging distribution centres. Since it began the plan in October 2011, these moves have reduced its annual expenses by $360 million. The company is also selling less-important businesses and using the proceeds to buy smaller firms with more-profitable products, such as baby strollers and reusable water bottles....