MANITOBA TELECOM SERVICES INC. $30 - Toronto symbol MBT

MANITOBA TELECOM SERVICES INC. $30 (Toronto symbol MBT; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 77.1 million; Market cap: $2.3 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.7%; TSINetwork Rating: Average; www.mts.ca) get 60% of its revenue from its 501,388 wireless, 486,833 telephone, 208,331 highspeed Internet and 109,085 TV customers in Manitoba. The remaining 40% comes from Allstream, which sells integrated telephone, Internet and other communication services to businesses across Canada.

The company paid $8.8 million for new spectrum in Manitoba. To put that in context, it lost $84.4 million, or $1.24 a share, in 2013. However, that loss was mainly due to a $130.4-million writedown of Allstream after the federal government blocked the sale of this business. Excluding all unusual items, Manitoba Telecom earned $1.69 a share. In 2012, it earned $144.5 million, or $2.17 a share.

Revenue fell 4.1% in 2013, to $1.6 billion from $1.7 billion. That’s mainly because declining demand for local and long-distance service cut Allstream’s revenue by 11.2%.

The company will probably earn $1.75 a share in 2014, and the stock trades at 17.1 times that figure. The $1.70 dividend yields 5.7%.

Manitoba Telecom is a hold.

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