BCE Inc.
Toronto symbol BCE, provides local and long distance telephone services in Ontario and Quebec. It also operates a nationwide wireless service.
BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $28.75 (Toronto symbol BA.UN: SI Rating: Above average) is the main provider of telephone services in Atlantic Canada. It also serves rural parts of Ontario and Quebec. As part of the deal that created Bell Aliant, the fund transferred the bulk of its wireless business to BCE. Without these operations, the fund now aims to spur growth by expanding the availability and capacity of its high-speed Internet service. Just 20% of Bell Aliant’s customers use its high-speed Internet service, so there’s plenty of room to grow. In the three months ended September 30, 2007, Bell Aliant earned $0.48 a unit from continuing operations in its second quarter. The fund took its present form on July 7, 2006, so it did not report earnings for the year-earlier quarter. But revenue on a pro forma basis, which assumes Bell Aliant began operations at the start of 2006, grew 1.6%, to $837.9 million from $825.1 million....
ISHARES DIVIDEND INDEX FUND $24.12 (Toronto symbol XDV; buy or sell through a broker) began trading in December, 2005. The fund currently holds the 30 highest yielding Canadian stocks. These stocks are included in the index based on their dividend growth, yield and average payout ratio. The weight of any one stock in the fund is limited to 10% of the fund’s assets. Its MER is 0.50%. iShares Dividend Index Fund now yields 2.9%. The fund’s top holdings are CIBC at 6.8%; Manitoba Telecom at 6.4%; Bank of Montreal, 5.4%; TD Bank, 4.7%; Teck Cominco, 4.7%; Russel Metals, 4.4%; BCE Inc., 4.2%; IGM Financial, 4.0%; Laurentian Bank, 3.9%; and Magna International, 3.9%....
LOBLAW COMPANIES LTD. $45 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 274.2 million; Market cap: $12.3 billion; SI Rating: Above average) offered discounts on purchases over $100 in the week before Thanksgiving. The company hopes promotions like this will help it compete with Wal-Mart’s new low-cost supermarkets. In the short term, however, the plan will hurt Loblaw’s profit margins. Loblaw is still a hold. BOMBARDIER INC. (Toronto symbols BBD.A $6.01 and BBD.B $5.99; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $10.2 billion; SI Rating: Extra risk) recently recommended that airlines ground older models of one of its planes, due to possible problems with their landing gear. About 90% of these planes are now back in service....
BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $32 (Toronto symbol BA.UN; Conservative Growth Portfolio, Utilities sector; Units outstanding: 130.8 million; Market cap: $4.2 billion; SI Rating: Above average) is the main provider of telephone services in Atlantic Canada. It also serves rural parts of Ontario and Quebec. BCE Inc. controls 43.4% of Bell Aliant. As part of the deal that created Bell Aliant, the fund transferred the bulk of its wireless business to BCE. Without these operations, the fund now aims to spur growth by expanding the availability and capacity of its high-speed Internet service. Just 20% of Bell Aliant’s customers use its high-speed Internet service, so there’s plenty of room to grow....
TELUS CORP. (Toronto symbols T $56 and T.A $54; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 331.7 million; Market cap: $18.5 billion; SI Rating: Above average) provides local and long distance telephone service in British Columbia, Alberta and parts of Quebec, and wireless service across Canada. A big part of the company’s success in the past few years is its wireless operations, which now account for 40% of its total revenue. Telus prefers to focus on long-term customers, which cuts the need for expensive promotions such as free phones. That has helped keep its wireless profit margins high compared to its main competitors (BCE and Rogers). Telus also tends to hang on to its customers longer....
BCE Inc. is the subject of a $42.75-a-share takeover offer. We feel BCE shareholders should vote in favour of the offer at a special meeting on September 21, 2007. That way, you’ll get the full amount without paying brokerage fees. We think most investors should hold some phone stocks as part of the Utilities sector component of a well-balanced portfolio....
ALCAN INC. $102 (Toronto symbol AL;Conservative Growth Portfolio,Resources sector; Shares outstanding: 369.7 million; Market cap: $37.7 billion; SI Rating: Average) is trading below Rio Tinto Ltd.'s takeover offer of $101 U.S. a share (about $105 Cdn.) That’s because of investor worries that Rio Tinto may have trouble completing the takeover, given recent turmoil in credit markets and falling aluminum prices. The difference between the current price and the offer may entice some investors to buy Alcan, hoping to lock in a quick profit before Rio Tinto’s offer expires on September 24. However, we don’t recommend buying Alcan now. The stock could drop 30% or more in the unlikely event that Rio Tinto pulls out, while the most it can gain is just 3%. Current Alcan holders should tender their shares....
TELUS CORP. $54.20 (Toronto symbol T.A; SI Rating: Above average) is the second-largest provider of telecommunication services in Canada, after BCE Inc. It has over 4.5 million regular telephone customers and 1.1 million Internet subscribers in British Columbia, Alberta and parts of Quebec. The company also has 5.1 million wireless customers nationwide. In the three months ended June 30, 2007, gains in Telus’s earnings per share excluding unusual items rose 5.8%, to $0.73 a share from $0.69 a year earlier. Revenue rose 4.4%, to $2.23 billion from $2.14 billion. Telus’s high exposure to wireless helps cut its reliance on its traditional phone business, which is facing growing competition from cable companies and Internet-based phone services....
ISHARES CDN LARGECAP 60 INDEX FUND $79.86 (Toronto symbol XIU; buy or sell through a broker) (formerly called iUnits S&P/TSX 60 Index Participation Fund) is a good low-fee way to buy the top stocks on the TSX. The units hold a basket of stocks that represent the S&P/TSX 60 Index. The index is made up of the 60 largest and most heavily traded stocks on the TSX. Expenses on the units are just 0.17% of assets. Most of the 60 stocks in the index are good quality companies. However, to meet the requirement that all sectors are represented, the index holds a few firms we wouldn’t include, such as Cott Corporation and Celestica. The index’s top holdings are: Royal Bank, 6.6%; Manulife, 5.8%; TD Bank, 4.7%; Bank of Nova Scotia, 4.7%; EnCana Corporation, 4.4%; Suncor Energy, 3.9%; Research in Motion, 3.7%; Canadian Natural Resources, 3.5%; Bank of Montreal, 3.1%; CIBC, 3.3%; BCE Inc., 2.6%; Barrick Gold, 2.8%; Sun Life Financial, 2.9%; and Potash Corp., 2.6%....
The best exchange-traded funds (ETFs) offer well-diversified, tax-efficient portfolios with very low management fees. Due to buyback and share issue arrangements, ETFs always trade close to their net asset value. Here are some of the best deals available in ETFs. We’ve also analysed one we don’t like. ISHARES CDN LARGECAP 60 INDEX FUND $79.86 (Toronto symbol XIU; buy or sell through a broker) (formerly called iUnits S&P/TSX 60 Index Participation Fund) is a good low-fee way to buy the top stocks on the TSX. The units hold a basket of stocks that represent the S&P/TSX 60 Index. The index is made up of the 60 largest and most heavily traded stocks on the TSX. Expenses on the units are just 0.17% of assets....