BCE Inc.
Toronto symbol BCE, provides local and long distance telephone services in Ontario and Quebec. It also operates a nationwide wireless service.
TORSTAR CORP. $8.97 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.5 million; Market cap: $713.1 million; Price-to-sales ratio: 0.5; Dividend yield: 5.6%; TSINetwork Rating: Above Average; www.torstar.com) publishes The Toronto Star, which is Canada’s largest daily newspaper by circulation. The company also publishes three other daily newspapers and over 100 weeklies, mainly in southern Ontario. Torstar’s newspaper business accounts for about 70% of its revenue and 60% of its earnings. The company’s other main business is wholly owned Harlequin Enterprises Ltd., the world’s leading publisher of romance novels. Torstar recently received $291.6 million from the sale of its 20% stake in CTVglobemedia to BCE Inc. (Toronto symbol BCE). CTVglobemedia owns CTV Television and other broadcasting businesses....
ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $19.60 (Toronto symbol XDV; buy or sell through a broker; ca.ishares.com) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of its assets. The fund’s MER is 0.50%. Its yield is 2.7%. The fund’s top holdings are CIBC, 6.6%; Bank of Montreal, 5.3%; Bonterra Energy, 5.2%; National Bank, 4.9%; TD Bank, 4.9%; Telus, 4.8%; IGM Financial, 4.3%; Enbridge, 4.2%; BCE, 4.2%; Canadian Utilities, 3.7%; and Manitoba Telecom, 3.7%. The fund holds 50.2% of its assets in financial stocks. Utilities are next, at 26.4%. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector....
Media companies continue to face a number of challenges, including the slowing economy, which is hurting advertising revenue, and the explosion of free information available on the Internet. However, we feel high-quality information providers like these three will adapt and thrive. All three are market leaders, and they own some the industry’s best-known brands. What’s more, they are building strong Internet businesses of their own, and doing a good job of controlling their costs. These moves will help them increase their earnings, and give them more cash for dividends. THOMSON REUTERS CORP. $29 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 836.8 million; Market cap: $24.3 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.5%; TSINetwork Rating: Above Average; www.thomsonreuters.com) has two main divisions: Markets (which supplied 57% of Thomson Reuters’ 2010 revenue and 48% of its earnings), sells news and information products to banks and other financial institutions. Professional (43%, 52%) sells information to professionals in the legal, taxation, accounting and scientific research fields....
ISHARES S&P/TSX 60 INDEX FUND $16.56 (Toronto symbol XIU; buy or sell through a broker; ca.ishares.com) is a good, low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets. Most of the stocks in the index are high-quality companies. However, as it must ensure that all sectors are represented, it holds a few we wouldn’t include. The index’s top holdings are Royal Bank, 6.7%; TD Bank, 6.4%; Bank of Nova Scotia, 5.5%; Barrick Gold, 4.8%; Suncor Energy, 4.1%; Potash Corp., 3.9%; Goldcorp, 3.8%; Bank of Montreal, 3.7%; Canadian Natural Resources, 3.2%; CN Railway, 3.2%; BCE Inc., 3.0%, TransCanada Corp., 2.9%, CIBC, 2.9%; Enbridge, 2.6%; Cenovus Energy, 2.3% and Manulife Financial, 2.1%....
BCE INC. $38.22 (Toronto symbol BCE; Shares outstanding: 777.1 million; Market cap: $30.3 billion; TSINetwork Rating: Above Average; Dividend yield: 5.4%; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. It also sells wireless and satellite-TV services across Canada. In the three months ended June 30, 2011, BCE’s earnings per share rose 10.3%, to $0.86 from $0.78. Revenue rose 11.6%, to $5.0 billion from $4.4 billion a year earlier. Revenue fell 2.0% at the wireline division, which accounts for 53% of total revenue. This division, which includes BCE’s traditional land-line business, faces rising competition. As well, many customers are cancelling their land lines and switching to wireless devices. Revenue from wireless services (26% of total revenue) rose 6.1%. The company’s recent network upgrades continue to attract new subscribers and prompt existing customers to upgrade their mobile-phone plans. BCE is also benefiting from rising use of smartphones, which generate higher monthly fees....
Many investors are concerned about today’s market outlook. However, a strong point over the past few years has been the reliability of Canadian dividend stocks. A good example of this is BCE, a utility stock that has grown its dividend and continues to provide capital gains to patient investors.
BCE faces challenges and opportunities
BCE Inc. (Toronto symbol BCE; www.bce.ca) earned $663 million in the three months ended June 30, 2011. That’s up 11.4% from $595 million a year earlier. Earnings per share rose 10.3%, to $0.86 from $0.78, on more shares outstanding. The latest earnings beat the consensus estimate of $0.81 a share....
We still think safety-conscious investors should focus on well-established stocks with strong businesses. The best of these stocks offer an attractive combination of low p/e ratios, steady or rising dividend yields and promising growth prospects. BCE has raised its dividend six times since December 2008. The stock now yields a high 5.3%. The shares are also inexpensive in relation to earnings. BCE INC. $38.22 (Toronto symbol BCE; Shares outstanding: 777.1 million; Market cap: $30.3 billion; TSINetwork Rating: Above Average; Dividend yield: 5.4%; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. It also sells wireless and satellite-TV services across Canada. In the three months ended June 30, 2011, BCE’s earnings per share rose 10.3%, to $0.86 from $0.78. Revenue rose 11.6%, to $5.0 billion from $4.4 billion a year earlier. Revenue fell 2.0% at the wireline division, which accounts for 53% of total revenue. This division, which includes BCE’s traditional land-line business, faces rising competition. As well, many customers are cancelling their land lines and switching to wireless devices....
TELUS $48.57 (Toronto symbol T.A; Shares outstanding: 335.6 million; Market cap: $16.3 billion; TSINetwork Rating: Above Average; Dividend yield: 4.5%; www.telus.com) is Canada’s second-largest telephone and wireless provider after BCE Inc.. Telus has 7.1 million wireless subscribers across Canada, and gets twice as much of its revenue from wireless as BCE (52% compared to BCE’s 26%). The company continues to expand its wireless business. Telus gets the remaining 48% of its revenue from its traditional phone business, which has 3.7 million customers in B.C., Alberta and eastern Quebec. Telus also has 1.2 million Internet subscribers....
Exchange-traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees, or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You’ll have to pay brokerage commissions to buy and sell ETFs. However, ETFs’ low management fees still give them a cost advantage over most conventional mutual funds. As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital-gains bills generated by the yearly distributions most conventional mutual funds pay out to unitholders. Below, we update our advice on six ETFs — five buys and one we don’t recommend....
BCE INC. $39 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 777.5 million; Market cap: $30.3 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, Internet and wireless services. The company’s main subsidiary, Bell Canada, has 6.3 million residential and business customers in Ontario and Quebec. BCE sells wireless services to 7.3 million subscribers across Canada. As well, it has 2.1 million high-speed Internet customers and 2.0 million TV subscribers. Through Bell Media, the company owns the CTV Television Network (28 TV stations), 29 specialty channels and 33 radio stations. It also owns 45% of Bell Aliant....