BCE Inc.

IMPERIAL OIL $37.45 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $31.7 billion; TSINetwork Rating: Average; Dividend yield: 1.2%; www.imperialoil.com) owns 70% of the massive Kearl oil-sands project in Alberta. Imperial’s parent company, ExxonMobil Corp. owns the remaining 30%. It will cost a total of $8 billion to bring Kearl into operation. Imperial’s share is $5.6 billion. Imperial has made some changes to this project. That will add to Kearl’s initial costs, but will raise its expected production by 5%. Meanwhile, Imperial’s earnings fell 23.6% in the three months ended September 30, 2010, to $418 million, or $0.49 a share. A year earlier, it earned $547 million, or $0.64 a share. Planned maintenance at Imperial’s oil-sands operations pushed down production by 7.0% in the latest quarter. That was the main reason for the earnings drop....

In the past few years, Telus has invested heavily in its wireless networks. These upgrades have been costly, but they are paying off, particularly as more people use mobile devices to access the Internet. The shift to wireless has forced Telus to restructure its traditional phone business. One-time costs, including severance payments, have held back its earnings in the past two years. The company has completed most of these changes, so its earnings should start rising again. As well, its improving outlook is freeing up more cash for dividends. TELUS CORP. (Toronto symbols T $45 and T.A $43; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 320.7 million; Market cap: $14.4 billion; Price-to-sales ratio: 1.5; Dividend yield: 4.7%; TSINetwork Rating: Above Average; www.telus.com) is Canada’s second-largest telephone company after BCE Inc. (Toronto symbol BCE, see Updating BCE Inc., Royal Bank of Canada and Pengrowth Energy Trust)....

BCE INC. $33 (www.bce.ca) earned $621 million before unusual items in the three months ended September 30, 2010, down 4.3% from $649 million a year earlier. Because of fewer shares outstanding, earnings per share fell 2.4%, to $0.82 from $0.84. The company had a lower tax bill in the year-earlier period. This was the main reason behind the lower earnings. Best Buy. ROYAL BANK OF CANADA $54 (www.rbc.com) continues to expand in Asia. It recently paid an undisclosed sum for the Hong Kong-based wealth management business of Belgium bank BNP Paribus Fortis. This purchase will help Royal profit from China’s growing middle class, who are preparing for retirement. Buy. PENGROWTH ENERGY TRUST $12 (www.pengrowth.com) saw its cash flow per share fall 14.3% in the latest quarter, to $0.54 from $0.63 a year earlier. That’s because unusually wet weather cut its combined oil and natural-gas production by 3.7%. Buy.

BCE INC. $33.76 (Toronto symbol BCE; Shares outstanding: 755.6 million; Market cap: $25.5 billion; SI Rating: Above Average; Dividend yield: 5.4%; www.bce.ca) provides telephone and Internet services in Ontario and Quebec. It also sells wireless and satellite-TV services across Canada. In the three months ended June 30, 2010, BCE’s revenue rose 3.3%, to $4.4 billion from $4.3 billion in the prior year. Before one-time items, earnings rose 32.8%, to $0.77 from $0.58. Strong demand for wireless and television services offset falling revenue from the company’s traditional telephone operations. As well, the company bought “The Source” chain of electronics stores in 2009, as well as the remaining 50% of the Virgin Mobile Canada joint venture. BCE is buying full control of CTVglobemedia, the private company that owns the 27-station CTV Television Network. CTVglobemedia also owns 30 specialty channels, 34 radio stations and The Globe and Mail newspaper. Right now, BCE owns 15% of CTVglobemedia. It will pay $1.3 billion for the remaining 85%. Following the purchase, BCE will sell 85% of The Globe and Mail to Woodbridge Co....

BCE is using its strong cash flow of almost $6 billion a year to make acquisitions and add to its services. That will help fuel the company’s long-term growth. It will also let BCE keep expanding and improving its wireless and high-speed Internet networks, buying back shares and paying (and possibly raising) its dividend. BCE INC. $33.76 (Toronto symbol BCE; Shares outstanding: 755.6 million; Market cap: $25.5 billion; SI Rating: Above Average; Dividend yield: 5.4%; www.bce.ca) provides telephone and Internet services in Ontario and Quebec. It also sells wireless and satellite-TV services across Canada. In the three months ended June 30, 2010, BCE’s revenue rose 3.3%, to $4.4 billion from $4.3 billion in the prior year. Before one-time items, earnings rose 32.8%, to $0.77 from $0.58. Strong demand for wireless and television services offset falling revenue from the company’s traditional telephone operations. As well, the company bought “The Source” chain of electronics stores in 2009, as well as the remaining 50% of the Virgin Mobile Canada joint venture....

TORSTAR CORP. $13 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.1 million; Market cap: $1.0 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.8%; SI Rating: Above Average) will get $345 million for its 20% of CTVglobemedia, which BCE is acquiring. That’s roughly a third of Torstar’s market cap. Torstar may use some of this cash to reduce its long-term debt of $519.2 million. That would cut its interest costs, and free up cash for expanded Internet growth. Torstar recently paid an undisclosed sum for the 86% of travelalerts.ca that it did not already own. This site offers travel information and links to airfares....

BCE INC. $34 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 758.8 million; Market cap: $25.8 billion; Price-to-sales ratio: 1.4; Dividend yield: 5.4%; SI Rating: Above Average) is buying the 85% of CTVglobemedia that it does not already own. This private company owns the 27-station CTV Television Network. CTVglobemedia also owns 30 speciality channels, 34 radio stations and The Globe and Mail newspaper. This is the second time that BCE has bought CTV Television. In 2000, it paid $2.3 billion for 100% of CTV. It later merged CTV with The Globe and Mail into a new company called Bell Globemedia. BCE held 70% of this new company, and Woodbridge Co. (a private company owned by the Thomson family) held the remaining 30%. BCE felt that combining media content with its satellite TV, Internet and phone networks would help it compete with larger, international media/telecom companies....

BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $26 (Toronto symbol BA.UN, Conservative Growth Portfolio, Utilities sector; Units outstanding: 127.4 million; Market cap: $3.3 billion; Price-to-sales ratio: 1.1; Dividend yield: 11.2%; SI Rating: Above Average) provides telephone services in Atlantic Canada, as well as rural parts of Ontario and Quebec. BCE owns about 45% of Bell Aliant. At current prices, it would cost BCE $1.8 billion to buy the remaining units. In the first half of 2010, BCE’s cash flow was $1.4 billion, or $1.81 a share, so it could easily afford to buy both CTV and Bell Aliant. However, there’s little overlap between BCE and Bell Aliant, so there would be few cost savings from a merger. Still, the possibility of a takeover adds to Bell Aliant’s appeal....

BCE INC. $33.80 (Toronto symbol BCE; Shares outstanding: 756.5 million; Market cap: $25.6 billion; SI Rating: Above Average; Dividend yield: 5.4%) is buying full control of CTVglobemedia, the private company that owns the 27-station CTV Television Network. CTVglobemedia also owns 30 speciality channels, 34 radio stations and The Globe and Mail newspaper. Right now, BCE owns 15% of CTVglobemedia. It will pay $1.3 billion for the remaining 85%. The company will also assume $1.7 billion of CTVglobemedia’s debt. Following the purchase, BCE will sell 85% of The Globe and Mail to Woodbridge Co. These deals still need regulatory approval, but BCE expects to complete them in mid-2011. Buying full control will make it easier for BCE to lower CTVglobemedia’s costs and improve its profitability. As well, adding CTVglobemedia will help BCE profit as more people watch TV programs over the Internet and on wireless devices. Moreover, the cost of the purchase shouldn’t hinder BCE’s plan to keep raising its dividend; the current annual rate of $1.83 a share yields 5.4%....

BCE INC., $32.99, Toronto symbol BCE, is buying full control of CTVglobemedia, the private company that owns the CTV Television Network, which consists of 27 TV stations. CTVglobemedia also owns 30 speciality channels, 34 radio stations and The Globe and Mail newspaper. BCE has controlled the CTV television network before: in 2000, the company bought a majority interest in CTV as part of a “convergence” strategy to combine media content with its satellite TV, Internet and phone networks. The plan did not work out as well as BCE had hoped. So, in 2005, BCE sold most of its CTV stake to Woodbridge Co., the Ontario Teachers’ Pension Plan and Torstar Corp. (see below). Right now, BCE owns 15% of CTVglobemedia. It will pay $1.3 billion for the remaining 85%. The company will also assume $1.7 billion of CTVglobemedia’s debt. Following the purchase, BCE will sell 85% of The Globe and Mail to Woodbridge. These deals still need regulatory approval, but BCE expects to complete them in mid-2011....