recent acquisitions

Parkland Fuel Corp., $16.97, symbol PKI on Toronto (Shares outstanding: 66.6 million; Market cap: $1.1 billion, www.parkland.ca), operates gas stations, convenience stores and a fuel distribution business, mostly in Western Canada and Ontario. The company was called Parkland Income Fund prior to its conversion to a dividend-paying corporation on December 31, 2010. Parkland owns 163 rural gas stations and convenience stores. Its brands include Fas Gas Plus, Race Trac Gas and Short Stop (convenience stores). Many stations sell propane in addition to gasoline and diesel fuel. The company also operates Esso gas stations in western Canada and Ontario under a licensing deal with Imperial Oil Ltd. (symbol IMO on Toronto)....

BCE INC., $45.04, Toronto symbol BCE, rose 6% this week after it reported much-higher-than-expected earnings. The company also raised its dividend for the eighth time since the fourth quarter of 2008. In the three months ended June 30, 2012, BCE earned $788 million, or $1.02 a share. That’s up 18.9% from $663 million, or $0.86 a share, a year earlier. These figures exclude costs to integrate recent acquisitions and gains on investment sales. On that basis, the latest earnings easily beat the consensus estimate of $0.81 a share. Overall revenue fell 0.6%, to $4.9 billion from $5.0 billion. Revenue at the company’s traditional telephone business (which supplies 57% of BCE’s overall revenue) fell 3.9%, partly due to strong competition from cable companies....

Walgreen Co., $34.03, symbol WAG on New York (Shares outstanding: 858.5 million; Market cap: $29.2 billion; www.walgreens.com), is the largest retail drug chain in the U.S., with over 8,359 outlets across the country. It also sells a wide variety of general merchandise. In addition, the company sells its goods online through its own website and Beauty.com, SkinStore.com and VisionDirect.com. In early 2011, Walgreen paid $409 million for Drugstore.com Inc., which sells over 60,000 health and personal care items. The purchase further strengthened Walgreen’s Internet presence and lets it compete with other online drug sellers....

Pat McKeough responds to many personal questions on specific stocks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. As the population ages, many consider medical and biotech firms to be a promising stock market investment. This past week, an Inner Circle member asked Pat about one of the giants in the field, the world’s biggest maker of implantable biomedical devices....

Medtronic Inc., $39.17, symbol MDT on New York (Shares outstanding: 1.0 billion; Market cap: $39.2 billion; www.medtronic.com), is the world’s largest maker of implantable biomedical devices. The company sells its products in over 120 countries. Markets outside the U.S. account for 45% of its sales. Medtronic gets 48% of its sales by making and selling neurological, spinal, ENT (ear, nose and throat) and diabetes products. It also makes devices that help manage heart rhythm (31% of sales) and cardiovascular products, such as heart valves and stents (21% of sales). In its 2012 fiscal year, which ended April 27, 2012, Medtronic’s sales rose 4.4%, to $16.2 billion from $15.5 billion in fiscal 2011. Earnings rose 11.8%, to $3.4 billion from $3.1 billion. The company spent $1.4 billion on share buybacks in fiscal 2012. Because of fewer shares outstanding, earnings per share rose 14.2%, to $3.22 from $2.87....

CONAGRA FOODS INC. $25 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 415.4 million; Market cap: $10.4 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.conagrafoods.com) makes a wide variety of packaged foods, including Chef Boyardee canned pasta, Hunt’s tomato sauce, Peter Pan peanut butter and Orville Redenbacher popcorn. In ConAgra’s 2012 fiscal year, which ended May 27, 2012, sales rose 7.8%, to $13.3 billion from $12.3 billion in fiscal 2011. That’s partly due to several recent acquisitions. The company also raised its prices to offset higher ingredient costs. Earnings per share rose 5.1%, to $1.84 from $1.75. These figures exclude several unusual items, such as losses on commodity-hedging contracts and costs related to changes in the way the company accounts for contributions to employee pension plans. ConAgra expects its earnings to rise to $1.97 a share in fiscal 2013. The stock trades at 12.7 times that estimate. The annual dividend rate of $0.96 yields 3.8%....

CONAGRA FOODS INC. $25 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 415.4 million; Market cap: $10.4 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.conagrafoods.com) makes a wide variety of packaged foods, including Chef Boyardee canned pasta, Hunt’s tomato sauce, Peter Pan peanut butter and Orville Redenbacher popcorn.

In ConAgra’s 2012 fiscal year, which ended May 27, 2012, sales rose 7.8%, to $13.3 billion from $12.3 billion in fiscal 2011. That’s partly due to several recent acquisitions. The company also raised its prices to offset higher ingredient costs. Earnings per share rose 5.1%, to $1.84 from $1.75. These figures exclude several unusual items, such as losses on commodity-hedging contracts and costs related to changes in the way the company accounts for contributions to employee pension plans.

ConAgra expects its earnings to rise to $1.97 a share in fiscal 2013. The stock trades at 12.7 times that estimate. The annual dividend rate of $0.96 yields 3.8%.

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Pat McKeough responds to many personal questions on specific stocks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. This past week, an Inner Circle member asked about one of the Canadian dividend stocks that was an income fund before the trust tax of 2011. This company raises revenue in a variety of ways, including the franchising of its company-owned gas stations, which allows it to collect commissions without high overhead. ...

Parkland Fuel Corp., $13.88, symbol PKI on Toronto (Shares outstanding: 65.7 million; Market cap: $911.9 million, www.parkland.ca), operates gas stations, convenience stores and a fuel distribution business, mostly in western Canada and Ontario. The company was called Parkland Income Fund prior to its conversion to a dividend-paying corporation on December 31, 2010. Parkland owns 163 rural gas stations and convenience stores. Its brands include Fas Gas Plus, Race Trac Gas and Short Stop (convenience stores). Many stations sell propane in addition to gasoline and diesel fuel. The company also operates Esso gas stations in western Canada and Ontario under a licensing deal with Imperial Oil Ltd. (symbol IMO on Toronto)....

TORSTAR CORP. $9.95 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.5 million; Market cap: $791.0 million; Price-to-sales ratio: 0.5; Dividend yield: 5.3%; TSINetwork Rating: Above Average; www.torstar.com) publishes The Toronto Star, Canada’s largest daily newspaper by circulation. It also publishes three other daily newspapers and over 110 weeklies, mainly in Southern Ontario. Torstar’s newspapers and related websites provide about 70% of its revenue and 60% of its earnings.

The company’s other main business is wholly owned Harlequin Enterprises Ltd., the world’s leading romance novel publisher. Harlequin publishes over 110 titles a month in 34 languages in 114 countries. It gets 95% of its revenue from outside of Canada.

Torstar continues to expand its websites. That’s helping it offset weaker advertising revenue at its newspapers.

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