Visa Inc.

HOME CAPITAL GROUP INC. $43 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 70.2 million; Market cap; $3.0 billion; Price-to-sales ratio: 5.2; Dividend yield: 2.0%; TSINetwork Rating: Average; www. homecapital.com) provides mortgages to borrowers who don’t meet the stricter standards of larger, traditional lenders, like banks. Clients include self-employed people and recent immigrants with limited credit histories. Low interest rates continue to fuel mortgage demand. As a result, Home Capital’s revenue rose 47.6%, from $687.2 million in 2010 to $1.01 billion in 2014. Earnings jumped 86.4%, from $154.8 million to $288.4 million, while per-share profits gained 84.2%, from $2.22 to $4.09. In the first quarter of 2015, the company’s revenue rose 0.5%, to $249.2 million from $247.9 million a year earlier. Earnings gained 3.7%, to $72.3 million, or $1.03 a share, from $69.7 million, or $1.00. Humans beat computers...

MCDONALD’S CORP., $98.74, New York symbol MCD, reported lower quarterly results this week. However, the stock rose 4% on news that the company will soon unveil a new plan to spur sales. That’s in addition to several already-announced initiatives, like a simpler menu and a phase-out of chicken raised with certain antibiotics. It’s also closing 700 less profitable outlets, or about 2% of its 36,000 locations. In the three months ended March 31, 2015, the company’s earnings per share fell 30.6%, to $0.84 from $1.21 a year earlier. Excluding restructuring costs, McDonald’s earned $1.01 a share in the latest quarter, missing the consensus estimate of $1.06. As well, 70% of its sales come from overseas, and the high U.S. dollar cut the latest earnings by $0.09 a share....

TORONTO-DOMINION BANK $54 (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $97.2 billion; Price-to-sales ratio: 3.4; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.td.com) gets 65% of its revenue and earnings from its Canadian retail banking division, which serves 15 million customers through 1,164 branches.

In the U.S., the bank operates 1,301 branches along the east coast from Maine to Florida. This business supplies 25% of its revenue and earnings. The remaining 10% comes from TD’s wholesale banking division, which offers securities trading and investmentbanking services, such as stock underwriting.

TD’s revenue jumped 53.1%, from $19.6 billion in 2010 to $30.0 billion in 2014 (fiscal years end October 31).

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Canada’s big five banks have fallen out of favour in the past few weeks, for two main reasons. First, the Bank of Canada unexpectedly cut its benchmark interest rate. While lower rates should spur loan demand, banks will earn less interest income on these new loans. Moreover, the banks may have to increase the rate they pay to attract depositors, which would squeeze their profit margins. In addition, investors fear that lower oil prices could force oil producers to default on their loans. Layoffs in the sector could also lead to higher credit losses in Alberta....

VISA INC., $269.34, New York symbol V, and Citigroup Inc. (New York symbol C) have won a contract with retailer Costco Wholesale Corp. (Nasdaq symbol COST). Under the deal, which takes effect April 1, 2016, Costco will only accept Visa credit cards at its 474 warehouse stores in the U.S. In addition, Citigroup will offer Costco members a new co-branded Visa card with an enhanced loyalty rewards program—though shoppers can also use Visa cards issued by other banks. This deal should increase Visa’s payment volumes and earnings. Moreover, the company’s risk is low, as Citigroup will issue the cards and collect the payments....

VISA INC. $273 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 616.0 million; Market cap: $168.2 billion; Price-to-sales ratio: 13.2; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.visa.com) operates the world’s largest electronic payments network, through which it processes credit, debit, prepaid and commercial transactions. In its fiscal 2015 first quarter, which ended December 31, 2014, Visa’s earnings rose 11.5%, to $1.6 billion from $1.4 billion a year earlier. Per-share earnings gained 15.0%, to $2.53 from $2.20, on fewer shares outstanding. Revenue rose 7.2%, to $3.4 billion from $3.2 billion. The company gets half of its revenue from outside the U.S. Without the negative impact of currency exchange rates, revenue gained 9%. Visa processed 17.6 billion transactions in the quarter, up 10.1% from a year earlier....

VISA INC. $273 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 616.0 million; Market cap: $168.2 billion; Price-to-sales ratio: 13.2; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.visa.com) operates the world’s largest electronic payments network, through which it processes credit, debit, prepaid and commercial transactions.

In its fiscal 2015 first quarter, which ended December 31, 2014, Visa’s earnings rose 11.5%, to $1.6 billion from $1.4 billion a year earlier. Per-share earnings gained 15.0%, to $2.53 from $2.20, on fewer shares outstanding.

Revenue rose 7.2%, to $3.4 billion from $3.2 billion. The company gets half of its revenue from outside the U.S. Without the negative impact of currency exchange rates, revenue gained 9%. Visa processed 17.6 billion transactions in the quarter, up 10.1% from a year earlier.

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Pennsylvania-based Vanguard Group is one of the world’s largest investment-management companies. The group administers over $2 trillion U.S. in 170 mutual funds. Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S., because they aren’t registered with provincial securities commissions. For that matter, some Canadian funds aren’t available in all provinces. Canadians can, however, buy Vanguard exchange traded funds (ETFs) that trade on stock exchanges. We don’t recommend all of Vanguard’s ETFs, but here are two we do see as low-fee buys....

VISA INC. $246 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 618.3 million; Market cap: $152.1 billion; Price-to-sales ratio: 12.5; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.visa.com) gets most of its revenue from fees it charges card issuers and merchants for using its network. It bases its fees on payment volume and transactions processed, among other factors. The banks that issue the cards are responsible for evaluating customer creditworthiness and collecting payments, not Visa. The company continues to profit as more people shop online, and debit cards are quickly replacing cash for smaller transactions. Meanwhile, the U.S. Supreme Court recently refused to hear an appeal of a class-action lawsuit by retailers seeking to lower the fees credit card companies charge. That cuts Visa’s risk....

SPDR S&P 500 ETF $202.31 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major U.S. companies that are chosen based on their market cap, liquidity and industry group.

The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, Chevron, General Electric, Berkshire Hathaway, and Wells Fargo & Co. The fund’s expenses are just 0.10% of its assets.

If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.

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