Topic: Growth Stocks

TIM HORTONS $45.75 – Toronto symbol THI

TIM HORTONS $45.75 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 154.4 million; Market cap: $7.1 billion; Dividend yield: 1.8%) operates 3,365 coffee and donut stores in Canada and 755 in the U.S. It also has 16 outlets in the Persian Gulf.

New menu items, such as lattes and panini sandwiches, are selling well. In addition, the company now offers free Wi-Fi Internet at its Canadian outlets. That’s helping it compete with fast-food chains like McDonald’s, which is aggressively expanding its coffee sales in Canada. Sales of Tim Hortons singleserve cups for Tassimo coffee machines are also rising.

These factors pushed up Tim Hortons sales by 10.3% in the three months ended September 30, 2012, to $802.0 million from $726.9 million a year earlier. Same-store sales rose 2.3% at its U.S. outlets and 1.9% in Canada. Earnings per share rose 4.6%, to $0.68 from $0.65.

Tim Hortons is a buy.

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