Telus Corp.

TELUS CORP. (Toronto symbols T $52 and T.A $50; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 324 million; Market cap: $16.8 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.telus.com) is Canada’s second-largest telephone company after BCE Inc. (Toronto symbol BCE). Telus has been expanding its wireless operations over the past few years. As a result, it now gets 52% of its earnings from its 7.0 million wireless subscribers across Canada. Telus now has 28% of the wireless market. Market leader Rogers Communications Inc. (Toronto symbol RCI.B) has 36%. The remaining 48% of the company’s earnings come from its traditional phone business, which has 3.7 million customers in British Columbia, Alberta and eastern Quebec. Telus also has 1.2 million Internet subscribers....

Telus is one of our top dividend-paying stocks. Meanwhile, it continues to grow due to its heavy investments in its wireless networks. Thanks to rising wireless revenue, the company has tripled its dividend since 2003. It now plans to raise its dividend twice a year to 2013, and increase the rate by 10% a year. Demand for wireless services should continue to rise. Right now, about 73% of Canadians use a wireless device. That should rise to around 80% in the next two years, as more people upgrade from standard cellphones to smartphones and tablet computers. TELUS CORP. (Toronto symbols T $52 and T.A $50; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 324 million; Market cap: $16.8 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.telus.com) is Canada’s second-largest telephone company after BCE Inc. (Toronto symbol BCE)....

Brompton Equity Split Corp., $12.97, symbol BE on Toronto (Shares outstanding: 1.7 million; Market cap: $21.9 million; www.bromptongroup.com) mainly invests in large-cap Canadian stocks. The fund was scheduled to wind up on May 31, 2011. However, it now plans to merge with Dividend Growth Split Corp., $9.21, symbol DGS on Toronto (Shares outstanding: 4.3 million; Market cap: $40.0 million; www.bromptongroup.com), on May 18, 2011. The new Dividend Growth Split Corp., symbol DGS on Toronto, will have a termination date of November 30, 2019....

IGM FINANCIAL INC. $49 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 259.7 million; Market cap: $12.7 billion; Price-to-sales ratio: 4.8; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.igmfinancial.com) had $134.1 billion of assets under management on March 31, 2011. That’s up 8.7% from $123.4 billion a year earlier. The rebounding stock market was the main reason for the gain. IGM’s fee income varies with the value of the mutual funds and other securities it manages, so the company’s revenue and earnings gain when the value of these assets rises. IGM Financial is a buy....

Dividend 15 Split Corp., $12.30, symbol DFN on Toronto (Shares outstanding: 13.6 million; Market cap: $167.3 million; www.dividend15.com), is a split-share investment corporation that holds shares of 15 companies: BCE Inc., CI Financial Corporation, Bank of Nova Scotia, Thomson Reuters, National Bank of Canada, TransAlta Corporation, Sun Life Financial, Canadian Imperial Bank of Commerce, TransCanada Corporation, Manulife Financial, TD Bank, Royal Bank of Canada, Bank of Montreal, Telus Corporation and Enbridge. The company can also invest up to 15% of its portfolio in other stocks. Dividend 15 Split Corp. has two share classes: Dividend 15 Split Corp. capital shares (Toronto symbol DFN), and Dividend 15 Split Corp. preferred shares (Toronto symbol DFN.PR.A)....

Canada’s big telephone companies face strong competition from cable companies and new entrants in the wireless market. However, their traditional phone businesses continue to provide strong cash flows. That’s letting them upgrade their networks, and maintain or increase their dividends. BCE INC. $35 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 752.3 million; Market cap: $24.4 billion; Price-to-sales ratio: 1.5; Dividend yield: 5.6%; TSINetwork Rating: Above Average; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. The company’s main subsidiary, Bell Canada, has 6.5 million residential and business customers in Ontario and Quebec. BCE sells wireless services to 7.2 million subscribers across Canada. As well, it has 2.1 million high-speed Internet customers and 2.0 million satellite-TV subscribers....

ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $21.65 (Toronto symbol XDV; buy or sell through a broker; 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 assets. The fund’s MER is 0.50%. It yields 1.9%. The fund’s top holdings are CIBC, 6.9%; Bonterra Energy Corp., 6.3%; Bank of Montreal, 5.2%; National Bank, 5.0%; TD Bank, 5.0%; AG Growth International, 4.9%; IGM Financial, 4.2%; Telus, 4.1%; Royal Bank, 4.0%; Bank of Nova Scotia, 3.9%; BCE, 3.5%; and TMX Group, 3.4%. The fund holds 52.9% of its assets in financial stocks. Utilities are next, at 22.5%. 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....

Exchange-traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees, or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You’ll have to pay brokerage commissions to buy and sell ETFs. However, ETFs’ low management fees still give them a cost advantage over most conventional mutual funds. As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital-gains bills generated by the yearly distributions most conventional mutual funds pay out to unitholders....

TORSTAR CORP. $14 (Toronto symbol TS.B; Shares outstanding: 78.9 million; Market cap: $1.1 billion; TSINetwork Rating: Above Average; Dividend yield: 2.6%; www.torstar.com) continues to benefit from the deep cost cuts it made over the past few years in response to slowing advertising and circulation revenue at its newspapers. As a result, Torstar’s earnings rose 70.9% in 2010, to $60.9 million, or $0.76 a share. It earned $35.6 million, or $0.45 a share, in 2009. If you exclude losses from Torstar’s 20% investment in CTVglobemedia, earnings per share would have risen 67.6%, to $1.14 from $0.68. (Privately held CTVglobemedia owns the CTV Television Network, 30 specialty channels and 34 radio stations.) On this basis, the 2010 earnings beat the consensus estimate of $1.13 a share. Revenue rose 1.9%, to $1.48 billion from $1.45 billion. Revenue at Torstar’s newspapers and web sites (68% of its 2010 revenue) rose 5.6%. However, revenue from its Harlequin book-publishing subsidiary (32% of revenue) fell 5.1%. That’s mainly because Harlequin sells most of its products outside Canada, and the strong Canadian dollar lowers the value of its overseas sales. If you exclude the impact of exchange rates and an acquisition by Harlequin, Torstar’s overall revenue rose 3.3% in 2010....

Telus Corp., symbol T.A on Toronto, provides telephone services in B.C., Alberta and eastern Quebec. It also sells wireless services across Canada. In 2010, the dividend paying stock’s sales rose 1.8%, to $9.8 billion from $9.6 billion in 2009. Sales in the company’s wireless division rose 6.6%, and the wireline division’s sales fell 2.2%. Overall, Telus added 378,000 customers in 2010, bringing the total to 12.3 million. That figure includes 7.0 million wireless subscribers, 3.7 million wireline access lines, 1.2 million Internet subscribers and 314,000 “Optik TV” customers. (Optik TV is an Internet-based television service that operates through phone lines.)...