The Investor 500 references the 500 largest businesses on the TSX and TSX Venture Exchange (by market capitalization) as of our April 1, 2010 cut-off date. Qualifying companies also have a head office in Canada or the U.S. and at least a year of trading history.
Companies are organized by market cap size. The biggest 50 go into the large-cap group, the next 150 into the mid-cap group and the remaining 300 into the small-cap group. Each company is ranked within its group by 1-year total return, a measure that takes into account share price change and dividends or cash distributions. Five-year returns are also totaled.
The price-to-earnings, price-to-book and price-to-sales ratios are trailing 12-month measures. The P/E ratio uses trailing 12-month diluted earnings-per-share from continuing operations. Operating margin, profit margin, return-on-common-equity and return-on-asset figures are based on the most recent fiscal year. All dollar amounts are in Canadian currency; when possible, net revenue is used for banks and other financial institutions to enable better comparisons with industrial companies.
Our annual Investor 500 is more than just a ranking of which stocks soared or tanked over the past year; it’s a source of investing ideas. As in years past, we screened our 500 companies for stocks that matched sets of potentially profitable characteristics. You’ll find groups of businesses that passed over various financial benchmarks, along with the criteria we used to flag them.
Sometimes our screening process resulted in an excessive number of stocks. When this was the case, we turned to other sources, such as analyst recommendations, to trim the number on our list.
The Investor 500 relies on financial data supplied by Bloomberg, the information choice of many investment professionals. While we strive for accuracy, errors can occasionally occur. To avoid disappointment, verify numbers before investing.
The rankings were compiled by data manager Phil Froats using Bloomberg.