BELL ALIANT INC. $26.56 - Toronto symbol BA

BELL ALIANT INC. $26.56 (Toronto symbol BA; Shares outstanding: 227.8 million; Market cap: $6.1 billion; TSINetwork Rating: Average; Dividend yield: 7.2%; www.aliant.ca) continues to replace copper wires with fibre optic cable. It now has 944,914 high-speed Internet users, up 3.4% from a year ago, and 163,264 digital TV customers, up 52.0%.

In the three months ended September 30, 2013, Bell Aliant’s revenue fell 0.4%, to $694.9 million from $697.4 million a year earlier. Before one-time items, earnings fell 6.7%, to $0.42 a share from $0.45. However, cash flow (after capital expenditures) jumped 28.0%, to $0.64 a share from $0.50.

The stock trades at 16.6 times the company’s likely 2013 earnings of $1.60 a share. The $1.90 dividend still seems safe and yields 7.2%.

Bell Aliant is a buy.

A professional investment analyst for more than 30 years, Pat has developed a stock-selection technique that has proven reliable in both bull and bear markets. His proprietary ValuVesting System™ focuses on stocks that provide exceptional quality at relatively low prices. Many savvy investors and industry leaders consider it the most powerful stock-picking method ever created.