Telus Corp.
Toronto symbol T.A, provides local and long distance telephone service in B.C., Alberta and parts of Quebec, and wireless service across Canada.
MANITOBA TELECOM $28.80 (Toronto symbol MBT; Shares outstanding: 78.9 million; Market cap: $2.3 billion; TSINetwork Rating: Average; Dividend yield: 4.5%; www.mts.ca) gets 60% of its revenue from its MTS division, which has 1.3 million TV, telephone and wireless users in Manitoba. The other 40% comes from Allstream, which sells phone and Internet services to businesses across Canada.
In May 2015, the company completed a strategic review of its operations. As a result, it now plans to cut 25% of Allstream’s workforce and reduce the subsidiary’s capital spending by 20% to 30% in 2015. These moves should save Manitoba Telecom $50 million annually by the end of 2016.
In addition, the company will contribute $120 million to its underfunded employees’ pension plan, eliminating the need for additional payments over the next two years. It has also cut its dividend by 23.5%: the new annual rate of $1.30 a share yields 4.5%.
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In May 2015, the company completed a strategic review of its operations. As a result, it now plans to cut 25% of Allstream’s workforce and reduce the subsidiary’s capital spending by 20% to 30% in 2015. These moves should save Manitoba Telecom $50 million annually by the end of 2016.
In addition, the company will contribute $120 million to its underfunded employees’ pension plan, eliminating the need for additional payments over the next two years. It has also cut its dividend by 23.5%: the new annual rate of $1.30 a share yields 4.5%.
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Shaw Communications, $26.76, symbol SJR.B on Toronto (Shares outstanding: 469.1 million; Market cap: $12.7 billion; www.shaw.ca), is one of Canada’s largest cable TV operators. The company has 1.9 million basic cable subscribers (mostly in Western Canada) and 851,569 satellite customers through its ownership of Shaw Direct. It also provides high-speed Internet to 1.9 million clients and telephone services to another 1.3 million. In September 2014, Shaw completed its $1.2-billion purchase of Colorado-based ViaWest, a privately held operator of data centres, cloud storage and information technology services. ViaWest has 27 data centres in the western United States....
BCE INC. $54.16 (Toronto symbol BCE; Shares outstanding: 847.9 million; Market cap: $45.7 billion; TSINetwork Rating: Above Average; Dividend yield: 4.8%; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. It also offers satellite and Internet TV across the country. In the three months ended June 30, 2015, BCE’s earnings per share rose 6.1%, to $0.87 from $0.82 a year earlier. Revenue increased 2.0%, to $5.33 billion from $5.22 billion. BCE gained 22,110 wireless subscribers, net of losses, in the latest quarter. It signed up 61,033 new users under long-term contracts, up 72.5% from a year earlier. That’s important, as these customers tend to use smartphones, which generate higher monthly fees than regular cellphones....
Our outlook on blue chip stock Manitoba Telecom as its shares begin to recover in the wake of a strategic review and network upgrades.
Pumping $27 billion into network upgrades helps keep Telus competitive in the telecom race we see it as a clear buy among blue chip stocks.
TELUS CORP. $45 (Toronto symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 605.5 million; Market cap: $27.2 billion; Price-to-sales ratio: 2.2; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.telus.com) is Canada’s second-largest wireless carrier, after Rogers Communications, with 8.2 million subscribers. Wireless now supplies 55% of Telus’s revenue and 66% of its earnings. The remaining 45% of revenue and 34% of earnings come from its wireline division, which serves 3.1 million traditional phone customers in B.C., Alberta and eastern Quebec. This business also has 1.5 million Internet users and 937,000 TV clients. Telus’s revenue rose 22.6%, from $9.8 billion in 2010 to $12.0 billion in 2014. Earnings gained 45.0%, from $983 million in 2010 to $1.4 billion in 2014. Per-share profits rose 51.0%, from $1.53 to $2.31, on fewer shares outstanding. Cash flow per share improved 24.4%, from $4.30 to $5.35....
MANITOBA TELECOM SERVICES INC. $29 (Toronto symbol MBT; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 78.5 million; Market cap: $2.3 billion; Price-to-sales ratio: 1.4; Dividend yield: 4.5%; TSINetwork Rating: Average; www.mtsallstream.com) gets 60% of its revenue from its MTS division, which has 1.3 million telephone, wireless and TV customers in Manitoba. The other 40% comes from Allstream, which sells phone and Internet services to businesses across Canada. The company recently completed a strategic review of its operations. As a result, it now plans to cut 25% of Allstream’s workforce and reduce the subsidiary’s capital spending by 20% to 30% in 2015. These moves should save Manitoba Telecom $50 million annually by the end of 2016. In addition, the company will contribute $120 million to its underfunded employees’ pension plan, eliminating the need for additional payments over the next two years. It has also cut its dividend by 23.5%: the new annual rate of $1.30 a share yields 4.5%....
TELUS $43.67 (Toronto symbol T; Shares outstanding: 60750 million; Market cap: $26.6 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%; www.telus.com) is closing its remaining 59 Black’s photography stores.
Telus paid $28 million for the 113-store Black’s chain in 2009. It felt these outlets would help it sell more mobile phones and service plans. However, digital camera sales have suffered as more people take pictures with their smartphones.
The company will transfer many Black’s employees to its other retail outlets, so any severance costs will be low.
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Telus paid $28 million for the 113-store Black’s chain in 2009. It felt these outlets would help it sell more mobile phones and service plans. However, digital camera sales have suffered as more people take pictures with their smartphones.
The company will transfer many Black’s employees to its other retail outlets, so any severance costs will be low.
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Since 2000, Telus has spent $27 billion—roughly its current market cap—to boost the speed and capacity of its wireless and high-speed Internet networks. Meantime, its strong customer service is helping it hang on to current subscribers. These strengths should keep fuelling the company’s stock, which is up 155% in the past 15 years, while its rising earnings mean its dividend hikes and share buybacks will continue. TELUS CORP. $45 (Toronto symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 605.5 million; Market cap: $27.2 billion; Price-to-sales ratio: 2.2; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.telus.com) is Canada’s second-largest wireless carrier, after Rogers Communications, with 8.2 million subscribers. Wireless now supplies 55% of Telus’s revenue and 66% of its earnings....
Like Telus (see page 71), BCE and Manitoba Telecom are speeding up their networks to profit from demand for faster downloads—both through high-speed Internet and wirelessly. Both companies can easily afford to make these investments and maintain their dividends, but we feel BCE is the better choice right now. BCE INC. $55 (Toronto symbol BCE; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 841.9 million; Market cap: $46.3 billion; Price-to-sales ratio: 2.2; Dividend yield: 4.7%; TSINetwork Rating: Above Average; www.bce.ca) is Canada’s largest telephone provider, with 7.0 million customers in Ontario, Quebec and the Atlantic provinces. It also has 3.3 million highspeed Internet users and 2.7 million TV subscribers....