Thomson Reuters Corp.

CANADIAN NATIONAL RAILWAY CO., $84.39, Toronto symbol CNR, operates Canada’s largest freight-rail network. The company also serves 16 U.S. states. CN earned $775 million in the three months ended March 31, 2012. That’s up 16.0% from $668 million a year earlier. Earnings per share rose 20.7%, to $1.75 from $1.45, on fewer shares outstanding. If you exclude one-time items in both years, such as gains on the sale of rail lines in Southern Ontario, earnings per share rose 31.1%, to $1.18 from $0.90. On this basis, CN’s earnings beat the consensus estimate of $1.03 a share....

CANADIAN TIRE CORP., $65.95, Toronto symbol CTC.A, rose 3% this week after the retailer reported better-than-expected earnings. In 2011, the company earned $467.0 million, or $5.71 a share. That beat the consensus estimate of $5.43 a share. The latest earnings are also up 5.2% from $444.2 million, or $5.42 a share, in 2010. Sales in 2011 rose 12.7%, to $10.4 billion from $9.2 billion in 2010. That’s largely due to the company’s August 2011 purchase of The Forzani Group Ltd., which sells sporting goods through over 500 stores in Canada, including SportChek and Athlete’s World. If you exclude the cash held by Forzani, Canadian Tire paid $739.9 million for this acquisition....

THOMSON REUTERS CORP. $28 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 827.5 million; Market cap: $23.2 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.5%; TSINetwork Rating: Above Average; www.thomsonreuters.com) has suspended its plan to sell its health-care business, which sells data and software that helps hospitals, clinics and medical professionals lower their costs and cut fraud. This division supplies 3% of Thomson Reuters’ total revenue.

The company put the health-care division up for sale in June 2011, but there was limited interest due to uncertainty over the global economy. Holding onto it until conditions improve makes sense.

Thomson Reuters is a buy.

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FINNING INTERNATIONAL INC. $23 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.6 million; Market cap: $3.9 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.finning.com) saw its sales jump 26% in the first nine months of 2011. That’s because higher commodity prices spurred demand for heavy equipment, such as bulldozers and trucks, from oil-exploration and mining companies. However, Finning expects its 2012 sales to rise by just 5%, as slower growth in China and India could dampen resource prices. However, based on its strong order backlog, the company expects its sales to rise by 10% in both 2013 and 2014. As well, Finning expects its earnings to rise faster than its sales as it continues to expand its repair and service businesses. In the third quarter of 2011, Finning got 39% of its revenue from selling product-support services. Finning is a buy....

THOMSON REUTERS CORP. $29 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 836.8 million; Market cap: $24.3 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.5%; TSINetwork Rating: Above Average; www.thomsonreuters.com) has two main divisions: Markets (which supplied 57% of Thomson Reuters’ 2010 revenue and 48% of its earnings), sells news and information products to banks and other financial institutions. Professional (43%, 52%) sells information to professionals in the legal, taxation, accounting and scientific research fields. Thomson Reuters recently said it plans to sell its healthcare business, which sells data and software that helps hospitals, clinics and health-care professionals cut costs and reduce fraud. In 2010, this division accounted for $450 million, or 3%, of the company’s revenue of $13.1 billion (all amounts except share price and market cap in U.S. dollars). Thomson Reuters may use proceeds from the sale to make more acquisitions, particularly in developing markets, where demand for reliable information is growing quickly....

Media companies continue to face a number of challenges, including the slowing economy, which is hurting advertising revenue, and the explosion of free information available on the Internet. However, we feel high-quality information providers like these three will adapt and thrive. All three are market leaders, and they own some the industry’s best-known brands. What’s more, they are building strong Internet businesses of their own, and doing a good job of controlling their costs. These moves will help them increase their earnings, and give them more cash for dividends. THOMSON REUTERS CORP. $29 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 836.8 million; Market cap: $24.3 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.5%; TSINetwork Rating: Above Average; www.thomsonreuters.com) has two main divisions: Markets (which supplied 57% of Thomson Reuters’ 2010 revenue and 48% of its earnings), sells news and information products to banks and other financial institutions. Professional (43%, 52%) sells information to professionals in the legal, taxation, accounting and scientific research fields....

PowerShares Canadian Dividend Index ETF, $18.44, symbol PDC on Toronto (Shares outstanding: 250,000; Market cap: $4.6 million; www.investco.ca), aims to replicate the performance of the Indxis Select Canadian Dividend Index. PowerShares Canadian Dividend Index ETF was launched on June 16, 2011. The units began trading at $20. However, the fund duplicates the PowerShares Canadian Dividend Index mutual fund, which started up in November 2009. The fund holds 35 stocks, eight real estate investment trusts (REITs) and two income trusts. It has an expense ratio of 0.50%, and yields 3.6%. Its top 10 holdings are Royal Bank, 10.0%; TD Bank, 10.0%, Bank of Nova Scotia, 9.7%; Bank of Montreal, 7.4%; CIBC, 5.6%; TransCanada Corp., 5.4%; Thomson Reuters, 5.2%; Enbridge, 4.6%; Great-West Lifeco, 4.4%; and Power Financial, 3.9%....

THOMSON REUTERS CORP. $35 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 835.6 million; Market cap: $29.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.thomsonreuters.com) has two main divisions: Markets (which supplied 57% of its 2010 revenue and 48% of its earnings) sells financialinformation products to banks and other financial institutions. Professional (43%, 52%) sells specialized information to professionals in the legal, accounting, scientific and health-care fields. Merger sent results soaring The company’s revenue rose 96.8%, from $6.6 billion in 2006 to $13.1 billion in 2010. That’s mainly because it bought the U.K.-based Reuters news agency for $16 billion in cash and shares in 2008 (all amounts except share price and market cap in U.S. dollars)....

TRANSCONTINENTAL INC., $14.65, Toronto symbol TCL.A, is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. It also publishes newspapers and magazines, and has over 300 web sites. The stock rose 3% after the company reported better-than-expected earnings this week. Transcontinental also raised its dividend for the second time in the past six months. In its 2011 second quarter, which ended April 30, 2011, Transcontinental’s revenue rose 0.9%, to $514.7 million from $510.0 a year earlier. Excluding unusual items, earnings rose 17.6%, to $40.1 million from $34.1 million a year earlier. Earnings per share rose 16.7%, to $0.49 from $0.42, on more shares outstanding. That beat the consensus estimate of $0.44 a share....

CGI GROUP INC., $20.70, Toronto symbol GIB.A, is Canada’s largest provider of computer-outsourcing services. The company’s services can automate certain routine functions, such as accounting and buying supplies. That makes its clients more efficient, and lets them focus on their main businesses. In its fiscal 2011 second quarter, which ended March 31, 2011, CGI earned $117.0 million. That’s up 43.4% from $81.6 million a year earlier. Due to fewer shares outstanding, earnings per share rose 50.0%, to $0.42 from $0.28. If you exclude a tax gain, the company would have earned $0.40 a share in the latest quarter. That beat the consensus earnings estimate of $0.38 a share. Revenue rose 24.5%, to $1.1 billion from $910.4 million a year earlier. If you exclude the negative impact of exchange rates, revenue would have risen 27.9%. Canadian revenue rose 4.3%, and U.S. revenue jumped 67.3%, mainly because the company won a number of new contracts from the U.S. federal government....