BCE Inc.

Most stock markets are down lately due to investor worries about a potential eurozone breakup, sluggish U.S. growth and a slowdown in China. Still, the long-term outlook is positive. One way to profit from a rebound is to add exchange traded funds (ETFs) that track major stock market indexes to your portfolio. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You must pay brokerage commissions to buy and sell ETFs, but their low management fees still give them a cost advantage over most mutual funds....

BCE INC. $41.54 (Toronto symbol BCE; Shares outstanding: 773.6 million; Market cap: $32.1 billion; TSINetwork Rating: Above Average; Dividend yield: 5.2%; www.bce.ca) is teaming up with a group of other investors, including the Ontario Teachers’ Pension Plan, to buy privately held Q9 networks Inc. Toronto-based Q9 provides data-storage and web-hosting services to businesses across Canada. It has 11 data centres in Ontario, Alberta and B.C. This investment will help BCE take advantage of growing demand from business clients for reliable cloud-computing services (the general term for shifting software and data off of users’ machines and onto service providers’ machines via the Internet). The company already operates six data centres. It will open a seventh later this year....

BELL ALIANT INC. $27.50 (Toronto symbol BA; Shares outstanding: 227.8 million; Market cap: $6.3 billion; TSINetwork Rating: Above Average; Dividend yield: 6.9%; www.aliant.ca) sells telephone and Internet services to 2.8 million customers in Atlantic Canada, as well as rural parts of Ontario and Quebec. The company also sells wireless services through an alliance with BCE, which owns 43.8% of Bell Aliant.

The company faces strong competition from cable providers. In addition, many of its phone customers are switching to wireless devices. However, Bell Aliant’s wireless agreement with BCE plus upgrades to its high-speed Internet network, are helping it hold on to clients and attract new ones.

Bell Aliant’s high-speed fibre optic systems now reach 458,000 homes. The company plans to expand this to 650,000 homes by the end of 2012.

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BCE INC. $40.21 (Toronto symbol BCE; Shares outstanding: 775.6 million; Market cap: $31.2 billion; TSINetwork Rating: Above Average; Dividend yield: 5.4%; www.bce.ca) is buying Astral Media Inc. (Toronto symbols ACM.A and ACM.B). The move follows BCE’s recent $533 million purchase of 37.5% of Maple Leaf Sports and Entertainment.

Montreal-based Astral owns 22 TV stations, 84 radio stations and several pay TV and specialty channels, such as The Movie Network, Family Channel and Teletoon. It also owns billboards and sells other outdoor advertising services in Quebec, Ontario and B.C.

The purchase price is $3.4 billion, including $380 million of Astral’s debt. BCE will pay roughly 75% of this cost in cash and 25% in common shares. To put this purchase in context, BCE earned $2.4 billion, or $3.13 a share, in 2011.

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Last week in this space, I said that if you want to add value to your investing, one of the least productive things to do is to try to “time” the market. By that, I meant attempting to sell good stocks at what looks to you like a price peak, in hopes of buying them back at lower prices. Investors do sometimes sell an IBM or a BCE or a CP or an Apple at a peak in the market, then buy it back 20% cheaper. But a neat outcome like that is extremely rare. It’s more common for something to go wrong with a market-timing plan. The stock may keep rising and not drop at all—or it may only begin dropping after you’ve bought it back at a higher price. Or, it may drop just 5% or 10%, then quickly turn around and rise 50% or 100%. It may never get back into your buyback range, in other words. Or, the replacement stock you buy may drop even more than the one you sold....

BCE INC. $40.21 (Toronto symbol BCE; Shares outstanding: 775.6 million; Market cap: $31.2 billion; TSINetwork Rating: Above Average; Dividend yield: 5.4%; www.bce.ca) is buying Astral Media Inc. (Toronto symbols ACM.A and ACM.B). The move follows BCE’s recent $533 million purchase of 37.5% of Maple Leaf Sports and Entertainment. Montreal-based Astral owns 22 TV stations, 84 radio stations and several pay TV and specialty channels, such as The Movie Network, Family Channel and Teletoon. It also owns billboards and sells other outdoor advertising services in Quebec, Ontario and B.C. The purchase price is $3.4 billion, including $380 million of Astral’s debt. BCE will pay roughly 75% of this cost in cash and 25% in common shares. To put this purchase in context, BCE earned $2.4 billion, or $3.13 a share, in 2011....

BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. $26.32 (Toronto symbol BEP.UN; Units outstanding: 104.7 million; Market cap: $2.8 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.2%; www.brpfund.com) has finished merging its assets with the extensive hydroelectric and wind power holdings of Brookfield Asset Management (symbol BAM on Toronto). Brookfield Renewable now owns 170 hydroelectric generating stations, three wind farms and two natural-gas-fired plants. It has 4,536 megawatts of generating capacity in total. Roughly 40% of Brookfield Renewable’s generating capacity is in Canada, with another 40% in the U.S. and 20% in Brazil. The company sells virtually all of its power under agreements that are an average of 24 years in length....

MANITOBA TELECOM SERVICES INC. $33 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 66.2 million; Market cap: $2.2 billion; Price-to-sales ratio: 1.2; Dividend yield: 5.2%; TSINetwork Rating: Average; www.mtsallstream.com) has 1.3 million telephone and wireless customers in Manitoba. This business now accounts for 55% of the company’s revenue. The remaining 45% comes from its Allstream division, which provides integrated telephone, Internet and other communication services to businesses across Canada.

Like BCE and Telus, Manitoba Telecom continues to profit from fast-growing demand for smartphones and wireless service. It ended 2011 with 496,432 wireless subscribers, up 2.6% from a year earlier. About 41% of users under long-term contracts had data plans, up from 27% in 2010.

The company is also seeing strong demand for its fibre-optic Internet and TV services. It now has 188,946 high-speed Internet customers (up 2.9% from 2010) and 95,456 TV subscribers (up 6.1%).

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BELL ALIANT INC. $28 (Toronto symbol BA, Conservative Growth Portfolio, Utilities sector; Shares outstanding: 227.8 million; Market cap: $6.4 billion; Price-to-sales ratio: 2.3; Dividend yield: 6.8%; TSINetwork Rating: Average; www.bellaliant.ca) sells telephone and Internet services to 2.6 million customers in Atlantic Canada, as well as rural parts of Ontario and Quebec. It also sells wireless services through an alliance with BCE; BCE owns 45% of the company.

The company continues to replace its copper-wire cables with fibre-optic lines. This lets its sell more high-speed Internet and digital TV services, and offset declining demand for its regular phone services, which still account for 60% of its revenue.

Bell Aliant’s fibre-optic systems now reach 458,000 homes. The company plans to expand this to 650,000 homes by the end of 2012.

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BCE INC. $41 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 774.0 million; Market cap: $31.7 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.3%; TSINetwork Rating: Above Average; www.bce.ca) is
Canada’s largest provider of telephone services.

BCE’s main subsidiary, Bell Canada, has 6.1 million telephone customers in Ontario and Quebec, as well as 2.1 million high-speed Internet customers and 2.1 million TV subscribers. Bell Canada supplied 53% of BCE’s 2011 revenue.

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