BCE Inc.

BCE, $24.99, symbol BCE on Toronto (Shares outstanding: 767.8 million; Market cap: $19.2 billion), has over 7.5 million telephone and Internet customers in Ontario and Quebec. It also has 6.5 million wireless subscribers across Canada. BCE continues to lose traditional phone customers, but these losses are slowing. Meanwhile, BCE’s cellphone business is growing strongly. BCE shares yield 6.2%. Bell Aliant Regional Communications Income Fund, $26.50, symbol BA.UN on Toronto (Units outstanding: 127.2 million; Market cap: $3.4 billion), has 3.1 million traditional phone customers in Atlantic Canada and rural parts of Ontario and Quebec. As part of the deal that created the trust in 2006, Bell Aliant transferred most of its wireless business to BCE, which owns 44% of Bell Aliant. Like BCE, Bell Aliant is losing traditional phone customers, but strong demand for high-speed Internet service is helping it offset those losses. Bell Aliant yields 10.9%. Under Ottawa’s new tax rules for income trusts, Bell Aliant will have to start paying income taxes at the same rate as a regular corporation in 2011. It has tax losses from prior years that it can use to reduce or defer its tax bill until 2012, but it will probably convert into a corporation after these expire. BCE may try to buy the trust before this point. On its own, that’s not reason enough to invest, but the possibility of a takeover adds appeal....

BCE INC. $24.87 (Toronto symbol BCE; Shares outstanding: 767.8 million; Market cap: $19.1 billion; SI Rating: Above Average) will pay $142 million to buy the 50% of Virgin Mobile Canada that it doesn’t already own from its joint-venture partner, U.K.-based The Virgin Group. In 2004, BCE and The Virgin Group teamed up to market low-cost cellphones to younger consumers. Virgin uses BCE’s wireless network. This new deal gives BCE the right to use the “Virgin” brand. As well, owning all of Virgin will help BCE fend off new wireless competitors that plan to start operating later this year. BCE is still a safety-conscious buy.

TELUS INC. (Toronto symbols T $30 and T.A $29; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 318 million; Market cap: $9.5 billion; Price-to-sales ratio: 1.0; SI Rating: Above Average) hopes to improve its sales by bundling its phone and Internet services with satellite TV. Under a new deal with BCE INC. $24 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 780.6 million; Market cap: $18.7 billion; Price-to-sales ratio: 1.1; SI Rating: Above Average), Telus will sell BCE’s satellite-TV service in Alberta and British Columbia under the Telus brand. BCE and Telus will share the proceeds from these sales. The deal also lets BCE keep selling satellite service in the same region under the “Bell TV” name. Telus is a buy. The cheaper, non-voting “A” shares are the better choice. BCE is also a buy.

BCE INC. $26.07 (Toronto symbol BCE; Shares outstanding: 803.1 million; Market cap: $20.9 billion; SI Rating: Above Average) has agreed to buy back and cancel 10.3 million of its common shares. The company is authorized to buy back up to 40 million (or 5%) of its outstanding shares. This move will increase the value of the remaining shares. BCE plans to finish the buyback by the end of May. Based on today’s share price, it will cost the company roughly $267 million. BCE can easily afford this; it earned $1.8 billion, or $2.25 a share, in 2008. It also holds cash of $3.1 billion, or $3.81 a share. BCE is a buy.

LINAMAR CORP., $8.24, Toronto symbol LNR, jumped 80% this week after it reported better-than-expected first-quarter results. Linamar sells transmissions and other parts to several carmakers. This business accounts for about 85% of its revenue. The company also makes self-propelled, scissor-type elevating work platforms under the Skyjack name, plus consumer products, such as lawnmowers and cargo trailers. Linamar lost $12.6 million, or $0.19 a share, in the three months ended March 31, 2009. However, this was mainly caused by an $11.7-million writedown of goodwill. As well, slowing demand from carmakers prompted Linamar to cut its workforce by 12%, or 1,300 employees. This resulted in $4.4 million in severance payments. Without these items, the company lost just $0.01 a share. That’s a lot better than the loss of $0.15 a share that analysts were expecting. In the year-earlier quarter, Linamar earned $29.5 million, or $0.43 a share. Its sales fell 30.9%, to $424.9 million from $614.5 million....

Brookfield Asset Management 4.75% Series 17 Preferreds, $14.85, symbol BAM.PR.M on Toronto, are perpetual preferred shares. That is, they have no fixed maturity date, and they have to pay their stated dividend forever, or “in perpetuity,” before they can pay common dividends in any given year. The shares began trading at $25 each in late 2006, and have fallen steadily since. In general, the prices of preferred shares are down lately, in spite of lower interest rates. There are a number of likely reasons for this: Preferred shares behave more like long-term, fixed-income instruments rather than short-term investments. While short-term interest rates are falling, the outlook for long-term rates is less certain....

BOMBARDIER INC., Toronto symbols BBD.A, $3.39, and BBD.B, $3.32, has received a firm order for 20 of its new CSeries regional jets from Lease Corporation International Aviation (New Buildings) Limited. Lease Corporation is an Irish company that leases aircraft to Singapore Airlines, British Airways and other major airlines. The deal is worth $1.4 billion, and Bombardier will probably begin delivering the planes in 2014. (All amounts except share price in U.S. dollars) Moreover, Lease Corporation has an option to buy 20 more jets, though it will probably wait until it has received most of the initial order before it exercises the option. To put this contract in perspective, Bombardier earned $1 billion, or $0.56 a share, in the fiscal year ended January 31, 2009. That’s more than twice the $479 million, or $0.26 a share, it earned the previous year. The year-earlier figures exclude the writedown of an investment....

BCE INC. $26.01 (Toronto symbol BCE; Shares outstanding: 791.6 million; Market cap: $20.6 billion; SI Rating: Above Average) has over 7.5 million telephone and Internet customers in Ontario and Quebec. It also has 6.5 million wireless subscribers across Canada. In the three months ended December 31, 2008, BCE’s revenue fell 0.7%, to $4.49 billion from $4.52 billion. However, earnings per share before one-time items rose 19.6%, to $0.55 from $0.46. BCE’s cellphone revenue rose 7.6% in 2008, and subscribers grew by 4.5%. Wireless accounts for 25% of BCE’s revenue and 43% of its profit. Since mid-2008, BCE has laid off over 7% of its staff. It has also cut spending on consulting, eliminated 7,000 corporate credit cards and lowered the number of ad agencies it uses to 11 from 47. These moves should lower the company’s annual expenses by $400 million. BCE earned $1.8 billion in 2008....

BCE aggressively cut its costs last year, including reducing its staff by 7%. The cuts were in response to a takeover bid by a consortium led by the Ontario Teachers’ Pension Plan. The bid failed, but BCE’s cost cuts have left it in a strong position to compete during the recession, and to profit when the economy rebounds. BCE INC. $26.01 (Toronto symbol BCE; Shares outstanding: 791.6 million; Market cap: $20.6 billion; SI Rating: Above Average) has over 7.5 million telephone and Internet customers in Ontario and Quebec. It also has 6.5 million wireless subscribers across Canada. In the three months ended December 31, 2008, BCE’s revenue fell 0.7%, to $4.49 billion from $4.52 billion. However, earnings per share before one-time items rose 19.6%, to $0.55 from $0.46. BCE’s cellphone revenue rose 7.6% in 2008, and subscribers grew by 4.5%. Wireless accounts for 25% of BCE’s revenue and 43% of its profit....

These five large funds — one from each of Canada’s big-five banks — have suffered over the last year. That’s because they were heavily weighted toward financial services and resource stocks. Financial services companies are still dealing with tight credit markets. As well, the recession has cut demand for resources. This, in turn, has driven down the prices of resource stocks. We still feel that the best way to profit in the stock market is to stick with high-quality, well-established companies and to spread your money out among the five sectors.You should also ensure your investments are diversified within each sector. These five funds continue to stick to high-quality investments. However, you still should adjust your portfolio to reflect the funds’ high weightings in certain sectors....