telus

TELUS CORP. (Toronto symbols T $65 and T.A $65; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 325.8 million; Market cap: $21.2 billion; Price-to-sales ratio: 2.0; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.telus.com) recently received shareholder approval for its plan to convert its 151 million non-voting class A shares into regular common shares (one vote per share) on a one-for-one basis. The B.C. Supreme Court must still approve this move, probably in early 2013. Telus also reported that non-Canadian investors now own about 15% of its common shares, down from 33% six months ago. It’s likely that U.S.-based hedge fund Mason Capital, which opposes the conversion plan, has cut its 18.7% stake. This drop also makes it easier for Telus to attract more non-Canadian investors without violating Ottawa’s foreign ownership limits on phone companies. Even though they receive identical dividends and have similar liquidity, the non-voting shares are usually cheaper than the common shares....

TELUS $64.23 (Toronto symbol T.A; Shares outstanding: 324.9 million; Market cap: $20.9 billion; TSINetwork Rating: Above Average; Dividend yield: 3.8%; www.telus.com) has received shareholder approval for its plan to convert its 151 million non-voting class A shares into regular common shares (with one vote each) on a one-for-one basis. Following the conversion, Telus will have 326 million common shares outstanding. The B.C. Supreme Court must still approve the plan. A hearing is set for November 5, 2012. However, U.S.-based hedge fund Mason Capital, which now owns around 19% of Telus’s common shares and a small portion of the non-voting stock, will try to block the conversion. Mason feels that common shareholders should receive compensation in exchange for the dilution of their voting power. Even though they receive identical dividends and have similar liquidity, the non-voting shares are typically cheaper than the common shares....

ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $20.77 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of its assets. The fund’s MER is 0.50%. It yields 4.6%.

The fund’s top holdings are CIBC, 7.1%; National Bank, 5.8%; TD Bank, 5.6%; Bank of Montreal, 5.3%; Bonterra Energy, 4.8%; Royal Bank, 4.6%; Telus Corp., 4.6%; Bank of Nova Scotia, 4.3%; BCE Inc., 4.1%; and AG Growth International, 4.0%.

The fund holds 54.4% of its assets in financial stocks. Utilities are next, at 21.2%. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector.

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ISHARES S&P/TSX 60 INDEX FUND $17.71 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good, low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets.

The index mostly consists of high-quality companies. However, as the fund must ensure that all sectors are represented, it holds a few stocks we wouldn’t include.

The index’s top holdings are Royal Bank, 7.4%; TD Bank, 6.8%; Bank of Nova Scotia, 5.8%; Suncor Energy, 4.5%; Barrick Gold, 3.7%; CN Railway, 3.5%; Bank of Montreal, 3.4%; Potash Corp., 3.3%; Goldcorp, 3.3%; BCE Inc., 3.1%; Canadian Natural Resources, 3.0%; TransCanada Corp., 2.9%; CIBC, 2.8%; Enbridge, 2.8%; Cenovus Energy, 2.4%; and Telus Corp., 1.8%.

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BCE INC., $42.86, Toronto symbol BCE, has failed to win regulatory approval for its $3.4-billion deal to buy Astral Media Inc. (Toronto symbols ACM.A and ACM.B). Montreal-based Astral owns 22 TV stations, 84 radio stations and several pay TV and specialty channels, such as the Movie Network, Family Channel and Teletoon. It also owns billboards and sells other outdoor advertising in Quebec, Ontario and B.C. Regulators felt the purchase would give BCE an overwhelming share of the TV broadcast market, which would hurt competition....

TELUS CORP., Toronto symbols T $62.71 and T.A $61.52, has paid an undisclosed sum for KinLogix. This Quebec-based private company makes software that lets medical professionals store patient records on remote server computers. KinLogix already serves over 200 clinics and accounts for 36% of Quebec’s electronic medical records market. Telus’s health care-related operations are much smaller than its main wireless and regular telephone divisions. However, demand for reliable electronic record storage is growing steadily. Telus’s strong reputation should help KinLogix attract more clients....

Most stock markets have risen lately. But as always, they remain subject to unexpected downturns. Even so, the long-term outlook is for higher stock prices. One way to profit from rising markets is to add exchange traded funds (ETFs) that track major stock indexes to your portfolio. ETF’s trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You must pay brokerage commissions to buy and sell ETFs, but their low management fees still give them a cost advantage over most mutual funds....

TELUS CORP. (Toronto symbols T $63 and T.A $62; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 325.8 million; Market cap: $20.4 billion; Priceto- sales ratio: 1.9; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.telus.com) continues to expand its wireless business. Its 7.4 million subscribers across Canada now supply 53% of its revenue and 63% of earnings.

The remaining 47% of Telus’s revenue and 37% of its earnings come from its wireline division, which mainly consists of 3.5 million traditional phone customers in B.C., Alberta and eastern Quebec. This business also includes 1.3 million Internet users and 595,000 TV customers.

Telus’s revenue rose 6.4%, from $9.1 billion in 2007 to $9.7 billion in 2008, mainly on rising wireless demand. Revenue slipped 0.5%, to $9.6 billion, in 2009 because Telus cut its prices to compete with new entrants in the wireless market. However, revenue rebounded to $9.8 billion in 2010, and to $10.4 billion in 2011.

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Over the past 10 years, Telus has spent over $16.5 billion on upgrades to its telecommunication networks. Thanks to these investments, wireless subscribers jumped to 7.4 million from 2.6 million, while high-speed Internet users soared to 1.2 million from 215,000. These gains have helped it offset a drop in traditional phone customers, to 3.5 million from 5.0 million. These upgrades are the main reason why Telus’s stock has soared 480% for us in the past decade. Even so, we feel it still has lots of growth ahead. That’s because ongoing investments in its networks will help Telus attract more new customers. TELUS CORP. (Toronto symbols T $63 and T.A $62; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 325.8 million; Market cap: $20.4 billion; Priceto- sales ratio: 1.9; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.telus.com) continues to expand its wireless business. Its 7.4 million subscribers across Canada now supply 53% of its revenue and 63% of earnings....

TELUS $62.14 (Toronto symbol T.A; Shares outstanding: 324.9 million; Market cap: $20.2 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%; www.telus.com) has revived its plan to merge its common shares (one vote per share) and its non-voting class A shares into a single class of common shares. Investors will vote on the plan at a special meeting on October 17, 2012. Telus cancelled a vote on the proposal that was scheduled for May 2012 because it felt it had little chance of winning. That’s because U.S.-based hedge fund Mason Capital, which now owns around 19% of Telus’s common shares and a small portion of the non-voting shares, said it would vote against the plan....