BCE Inc.

EMERA INC., $24.56, Toronto symbol EMA, owns Nova Scotia Power Inc., which is Nova Scotia’s main electrical-power supplier. Nova Scotia Power supplies 94% of Emera’s revenue. The remaining 6% comes from investments in power companies in the U.S. and the Caribbean. This week, Nova Scotia Power and U.S.-based NewPage Corp. agreed to build a new biomass power plant at NewPage’s Port Hawkesbury paper mill in northern Nova Scotia. Biomass power plants generate electricity by burning plant materials and wood waste. This new facility should start operating by the end of 2012. It will then supply 3% of Nova Scotia’s power needs. Under the deal, Nova Scotia Power will invest $200 million in the new plant, including $80 million to buy an existing wood-burning generator. Most of the remaining $120 million will go toward building a second generator. NewPage will build and operate the biomass plant. It will also supply the fuel....

BCE INC. $30.07 (Toronto symbol BCE; Shares outstanding: 765.2 million; Market cap: $23.0 billion; SI Rating: Above Average; Dividend yield: 5.8%) provides telephone and Internet services in Ontario and Quebec. It also sells wireless and satellite-TV services across Canada. In 2009, BCE’s revenue rose 0.4%, to $17.74 billion from $17.66 billion in the prior year. Earnings before one-time items rose 6.5%, to $1.9 billion from $1.8 billion in the prior year. Per-share earnings rose 11.1%, to $2.50 from $2.25, on fewer shares outstanding. The Canadian wireless market is highly competitive. However, last year BCE bought the “The Source,” a 756-store home-electronics chain. That gives BCE a ready outlet to sell its products and services. As well, the company’s Virgin Mobile discount cellphone service is helping it attract younger, more cost-conscious users....

BCE is using its strong cash flow to expand and improve its wireless and high-speed Internet networks. That will fuel the company’s long-term growth. It will also let BCE keep adding services, buying back shares and paying (and possibly raising) its high dividend. BCE INC. $30.07 (Toronto symbol BCE; Shares outstanding: 765.2 million; Market cap: $23.0 billion; SI Rating: Above Average; Dividend yield: 5.8%) provides telephone and Internet services in Ontario and Quebec. It also sells wireless and satellite-TV services across Canada. In 2009, BCE’s revenue rose 0.4%, to $17.74 billion from $17.66 billion in the prior year. Earnings before one-time items rose 6.5%, to $1.9 billion from $1.8 billion in the prior year. Per-share earnings rose 11.1%, to $2.50 from $2.25, on fewer shares outstanding....

BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $25.47 (Toronto symbol BA.UN: Units outstanding: 127.3 million; Market cap: $3.2 billion; SI Rating: Above Average; Yield: 11.4%) provides traditional land-line phone service in Atlantic Canada and rural parts of Ontario and Quebec. The trust will revert to regular corporate status before January 1, 2011. This will force it to pay income taxes, so its yield of 11.4% will shrink, even after allowing for the dividend tax credit. But its yield will stay well above BCE’s. As part of the 2006 deal that created the trust, Bell Aliant transferred its wireless operations to BCE (which owns 45% of Bell Aliant). This cut into Bell Aliant’s growth....

Brookfield Asset Management, $26.37, symbol BAM.A on Toronto (Shares outstanding: 572.9 million; Market cap: $15.1 billion), is a holding company that mainly focuses on real estate, infrastructure and power generation. Its holdings include interests in Brookfield Renewable Power Fund and BPO Properties, which owns, develops and manages office buildings. Brookfield Asset Management also holds resource investments, including Norbord. Brookfield Asset Management has a complex holding company structure that could make it difficult to spot problems, should they arise. We see the stock as okay to hold, but don’t recommend it for new buying. RioCan, $18.56, symbol REI.UN on Toronto (Units outstanding: 242.0 million; Market cap: $4.5 billion) – see above – is a buy for income and growth....

BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $25.30 (Toronto symbol BA.UN: Units outstanding: 127.3 million; Market cap: $3.2 billion; SI Rating: Above Average; Dividend yield: 11.4%) will convert to a regular, dividend-paying corporation before Ottawa starts taxing income trusts on January 1, 2011. The conversion will force Bell Aliant to pay income taxes. To offset this cost, the trust will cut its current monthly distributions of $0.2417 a unit, which now yield 11.4%. Still, it’s likely that the payout will remain high compared to similar telephone utilities. As well, the conversion may prompt BCE, which owns 45% of Bell Aliant, to buy the remaining units. While that’s not reason enough to buy, the possibility of a takeover adds to Bell Aliant’s appeal. Meanwhile, Bell Aliant earned $373.0 million in 2009. That’s up 10.8% from $336.6 million in 2008. Earnings per unit rose 11.5%, to $2.33 from $2.09, on more units outstanding. Cash flow per unit rose 8.0%, to $3.39 from $3.14. Revenue fell 2.2%, to $3.17 billion from $3.25 billion. Cost savings offset lower revenue from a 5% drop in local telephone subscribers....

We think investors will profit most — and with the least risk — by buying shares of well-established, dividend-paying stocks with strong business prospects. These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace. Here are 3 ways dividend paying stocks can help improve your portfolio’s long-term returns:...

BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $25 (Toronto symbol BA.UN; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 228.4 million; Market cap: $5.7 billion; Price-to-sales ratio: 1.8; Dividend yield: 11.6%; SI Rating: Above Average) provides telephone services in Atlantic Canada, as well as rural parts of Ontario and Quebec. As part of the deal that created the trust in 2006, Bell Aliant transferred its wireless operations to BCE, which owns 45% of the trust. Bell Aliant earned $373.0 million in 2009. That’s up 10.8% from $336.6 million in 2008. Earnings per unit rose 11.5%, to $2.33 from $2.09, on more units outstanding....

BCE INC. $29 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 767.2 million; Market cap: $22.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 6.0%; SI Rating: Above Average) provides telephone and Internet services in Ontario and Quebec. It also sells wireless and satellite TV services across Canada. BCE is starting to see the benefits of a restructuring plan that it began in July 2008. Under the plan, the company cut jobs, relocated employees and sold extra real estate. These moves should save BCE $400 million annually by the end of this year. In 2009, BCE’s earnings rose 6.5%, to $1.9 billion from $1.8 billion in the prior year. Per-share earnings rose 11.1%, to $2.50 from $2.25, on fewer shares outstanding. These figures exclude restructuring costs and other unusual items. Revenue rose 0.4%, to $17.74 billion from $17.66 billion....

Canada’s big telephone companies have faced strong competition from cable companies for years. This experience will help them deal with three new entrants in the wireless field. One of these new competitors, Wind Mobile, is already operating. Two more, Mobilicity and Public Mobile, should launch later this year. Meanwhile, all four major phone companies are using their steady cash flows to expand and improve their wireless and high-speed Internet networks. That will fuel their long-term growth, and let them keep paying or raise their current dividends. BCE INC. $29 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 767.2 million; Market cap: $22.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 6.0%; SI Rating: Above Average) provides telephone and Internet services in Ontario and Quebec. It also sells wireless and satellite TV services across Canada....