telus

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TELUS CORP. $32.34 (Toronto symbol T.A; Shares outstanding: 335.6 million; Market cap: $10.9 billion; SI Rating: Above Average; Dividend yield: 5.9%) expects its revenue to rise by 2% to 5% in 2010, to between $9.8 billion and $10.1 billion. Most of the gain will come from its wireless division, which accounts for half of Telus’s revenue and earnings. This division recently upgraded its wireless networks to handle a wider variety of cellphones, including the hugely popular Apple iPhone. Telus should also profit as more people use their cellphones to send email, access the Internet and download software....

BCE INC., $27.51, Toronto symbol BCE, has increased its quarterly dividend by 7.4%, to $0.435 a share from $0.405. The new annual rate of $1.74 yields 6.3%. This is the company’s third dividend hike since a private consortium led by the Ontario Teachers’ Pension Plan dropped its plan to buy BCE a year ago. BCE has also earmarked $500 million for share buybacks. That’s equal to 2.4% of its $20.9-billion market cap. From December 2008 to May 2009, the company spent $986 million to buy back 5% of its shares. Share buybacks increase the value of the remaining shares....

AMAZON.COM $128.36 (Nasdaq symbol AMZN; SI Rating: Extra Risk) (206-266-1000; www.amazon.com; Shares outstanding: 433.0 million; Market cap: $55.6 billion; No dividends paid) is now selling its Kindle e-book reader in Canada. The reader costs $279 U.S., plus shipping. Canadian Kindle users can wirelessly download files from Amazon’s Kindle store, which contains over 300,000 books. Most bestsellers and new releases will be $11.99 U.S. or less. Users can download Canadian newspapers, including the Globe and Mail and the National Post, as well as leading U.S. and international magazines and newspapers. For now, Canadians won’t be able to use all of the Kindle’s wireless-connection features, including subscriptions to blogs and the Kindle web browser. This is likely because Amazon has not reached a deal with a Canadian wireless carrier, such as BCE, Rogers or Telus....

DEVON ENERGY CORP., $67.50, symbol DVN on New York, has announced plans to sell its properties in the Gulf of Mexico, as well as its international assets. After taxes, the company expects the sales to generate between $4.5 billion and $7.5 billion. The properties that Devon is selling make up about 7% of the company’s proven reserves of 2.8 billion barrels of oil equivalent. But they are high-risk and costly prospects to develop, and consume over 30% of Devon’s spending. Their potential is huge, but they would take many years and billions of dollars more to develop. The sales will let Devon focus on its onshore North American properties. Apart from conventional production, these include shale oil in northern Texas and oil sands in Canada. The company also plans to cut its debt from $5.8 billion to as low as $2.5 billion. That’s just 8.3% of its $30.0-billion market cap....

TELUS CORP. (Toronto symbols T $33 and T.A $31; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 318 million; Market cap: $10.2 billion; Price-to-sales ratio: 1.1; SI Rating: Above Average) earned $280 million in the three months ended September 30, 2009. That’s down 2.1% from $286 million a year earlier. Earnings per share fell 1.1%, to $0.88 from $0.89, on fewer shares outstanding. Revenue fell 1.6%, to $2.41 billion from $2.45 billion. Higher demand for data services, such as accessing email and web sites, continues to lift revenue at Telus’s wireless division, which accounts for roughly half of the company’s revenue. That helped offset falling revenue at its traditional telephone business, which provides the remaining half of Telus’s revenue. Telus’s wireless revenue should get a further boost now that the company is selling the hugely popular Apple iPhone smartphone. As well, Telus is attracting new customers with its Telus TV service, which uses high-speed Internet technology to transmit signals over existing telephone wires. The company continues to pay quarterly dividends of $0.475 a share, for an annualized yield of 5.8% (6.1% for the non-voting “A” shares). Telus has also improved its dividend reinvestment plan. Common and non-voting shareholders can now reinvest their dividends for new non-voting shares at a 3% discount to the market price. Previously, Telus did not offer a discount....

ISHARES DIVIDEND INDEX FUND $17.74 (Toronto symbol XDV; buy or sell through a broker) holds the 30 highest-yielding Canadian stocks based on dividend growth, yield and average payout ratio. The weight of any one stock is limited to 10% of assets. The fund’s MER is 0.50%. iShares Dividend Index Fund has a yield of 4.0%. Top holdings are National Bank, 8.9%; Bank of Montreal, 8.0%; CIBC, 7.2%; TD Bank, 6.3%; IGM Financial, 5.0%; Bank of Nova Scotia, 5.0%; Royal Bank, 4.9%; Manitoba Telecom, 4.6%; TMX Group, 3.6%; Sun Life, 3.2%; Power Financial, 3.2%; Telus, 3.1%; and Russel Metals, 2.8%. iShares Dividend Index Fund is a buy.

BCE INC. $25.79 (Toronto symbol BCE; Shares outstanding: 767.2 million; Market cap: $19.8 billion; SI Rating: Above Average) and TELUS CORP. $31.35 (Toronto symbol T.A; Shares outstanding: 335.6 million; Market cap: $10.5 billion; SI Rating: Above Average) have begun selling Apple’s hugely popular iPhone smartphone. Until now, Rogers Communications was the sole Canadian carrier. Adding the iPhone should help BCE and Telus hang on to more of their cellphone customers. It will also help them compete with new wireless carriers, including DAVE Wireless and Public Mobile, which will probably start operating next year. Both BCE and Telus are buys.

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TRANSALTA CORP., $21.86, Toronto symbol TA, will pay roughly $755 million, or $5.25 a share, for Canadian Hydro Developers Inc. (Toronto symbol KHD). The purchase price is 15.4% higher than TransAlta’s earlier offer of $4.55 a share. Canadian Hydro is currently trading at $5.22, which indicates that investors do not expect a better offer. TransAlta aims to complete the purchase in the next month or two, once Canadian Hydro shareholders approve the takeover. TransAlta will also assume Canadian Hydro’s $876-million debt. To put these figures in context, TransAlta’s 2008 cash flow was $828 million, or $4.16 a share....