spin off

KRAFT FOODS GROUP INC. (Nasdaq symbol KRFT; www.kraftfoodsgroup.com) makes a variety of grocery products, including Kraft macaroni and cheese, Oscar Mayer meats, Philadelphia cream cheese, Maxwell House coffee, Jell-O desserts and Miracle Whip salad dressing. In October 2012 Kraft broke itself up into two companies, spinning off Mondelez (Nasdaq symbol MDLZ), which makes cookies, biscuits, gum and beverages and does over 80% of its business outside North America....

DOMINO’S PIZZA INC., $55.98, symbol DPZ on New York, is the world’s largest chain of pizza stores that offer takeout and delivery. It operates10,040 outlets in the U.S. and over 70 other countries. Franchisees run most of these stores. Excluding one-time items, the company’s earnings per share rose 25.5% in the quarter ended March 24, 2013, to $0.59 from $0.47 a year earlier. Sales rose 8.6%, to $417.6 million from $384.6 million. Same-store sales rose 6.5% internationally and 6.2% in the U.S. Domino’s continues to boost its sales by aggressively promoting its new pizza recipes. It’s also profiting by moving into ordering online and through software applications, or apps, on smartphones. In addition, Domino’s still has lots of growth potential overseas....

CGI GROUP INC., $31.31, Toronto symbol GIB.A, jumped 15% this week after the company reported much better-than-expected quarterly results. CGI is Canada’s largest provider of computer outsourcing services. The company helps its clients automate certain routine functions, like accounting and buying supplies. That makes companies more efficient and lets them focus on their main businesses. In August 2012, CGI completed its $2.7-billion purchase of Logica plc, a U.K.-based firm that provides computer-outsourcing services in 36 countries....

AGRIUM INC., $94.59, Toronto symbol AGU, plans to continue expanding its retail operations after shareholders decided not to elect five nominees from activist investment firm Jana Partners to Agrium’s 12-member board of directors. The retail division has 1,220 stores in North America, South America and Australia that sell seed, fertilizer and other products to farmers. These outlets supply about 70% of Agrium’s revenue. The remaining 30% mainly comes from making fertilizers from natural gas. Jana, which owns 7.5% of Agrium’s shares, wants Agrium to spin off its retail division as a separate company. However, steady revenue streams from these stores help offset the cyclical nature of Agrium’s fertilizer operations....

AGRIUM INC. $114 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 149.4 million; Market cap: $17.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.8%; TSINetwork Rating: Average; www.agrium.com) has soared 60% in the past year. That’s mainly because activist investment firm Jana Partners wants Agrium to spin off its retail business as a separate company. Jana owns 6% of Agrium’s shares.

The retail division has 1,250 stores in North America, South America and Australia that sell seed, fertilizer and other products to farmers. These outlets supply 60% of Agrium’s revenue. The remaining 40% mainly comes from making fertilizers from natural gas.

Retail stores add stability

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AGRIUM INC. $114 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 149.4 million; Market cap: $17.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.8%; TSINetwork Rating: Average; www.agrium.com) has soared 60% in the past year....

Picking stocks whose share prices will rise is not the only goal that successful investors set for themselves. You also add a great deal of value to your portfolio when you select stocks that are prepared to distribute their profits to the shareholders. A company can share the wealth in two main ways—it can buy back its own shares, or it can pay dividends. Both pay off for investors, which is why a number of the best stocks we recommend have a history of doing both....

AGRIUM INC., $115.36, Toronto symbol AGU, jumped 8% this week after the company increased its earnings forecast for the fourth quarter of 2012. Higher prices for grains and other crops are prompting farmers to apply more fertilizer. As a result, the company now expects to report fourth quarter earnings of slightly more than $2.00 a share (all amounts except share price in U.S. dollars). That’s well above its earlier forecast of $1.50 to $1.90 a share. Activist investment firm Jana Partners LLC continues to pressure Agrium to spin off its retail business as a separate company. Jana owns 6% of Agrium’s shares....

YUM! BRANDS INC., $67.08, New York symbol YUM, fell 10% today due to weaker-than-expected sales in China. The company’s KFC, Pizza Hut and other restaurants in China account for 50% of its total sales, and 45% of its earnings. In the fourth quarter of 2012, Yum expects same-store sales in China will fall 4%. However, same-store sales should rise 4% at its other international outlets, and 3% in the U.S. Yum still expects to earn $3.24 a share in 2012, which is a 13% gain over 2011. However, this forecast fell short of the consensus forecast of $3.28. The stock trades at 20.7 times the new estimate. That’s still a reasonable p/e ratio in light of its long-term growth prospects: Yum expects earnings to grow by at least 10% in 2013....

BCE INC., $42.15, Toronto symbol BCE, recently failed to win regulatory approval for its $3.4-billion deal to buy Astral Media (Toronto symbols ACM.A and ACM.B). Montreal-based Astral owns 22 TV stations, 84 radio stations and several pay TV and specialty channels, such as the Movie Network, Family Channel and Teletoon. It also owns billboards and sells other outdoor advertising in Quebec, Ontario and B.C. Regulators felt the purchase would give BCE an overwhelming share of Canada’s English-language TV broadcast market, which would hurt competition....