Telus Corp.

TELUS CORP. (Toronto symbols T $40 and T.A $39; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 335.6 million; Market cap $13.4 billion; SI Rating: Above average) provides local and long distance telephone service to 4.3 million customers in Alberta, British Columbia and Eastern Quebec. This business supplies about 29% of Telus’s revenue. The company also operates a national wireless communication network with 5.8 million subscribers. The wireless business accounts for 47% of its revenue. The remaining 24% of Telus’s revenue comes from providing Internet service to individuals and businesses. It has 1.1 million high-speed Internet subscribers....

Like all phone companies, Telus faces increasing competition in its traditional markets from cable companies and Internet-based phone services. However, it’s offsetting this with robust growth in faster-growing businesses such as wireless and high-speed Internet services. There’s also competition from new entrants in the wireless field. But just 60% of Canadians use a cellphone, so there’s still plenty of room to grow. Telus’s strong brands and reputation should continue to help it win new wireless customers. TELUS CORP. (Toronto symbols T $40 and T.A $39; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 335.6 million; Market cap $13.4 billion; SI Rating: Above average) provides local and long distance telephone service to 4.3 million customers in Alberta, British Columbia and Eastern Quebec. This business supplies about 29% of Telus’s revenue....

ISHARES DIVIDEND INDEX FUND $20.44 (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%. The fund now yields 3.8%. The fund’s top holdings are: CIBC at 7.3%; Manitoba Telecom at 5.6%; National Bank, 5.6%; Bank of Montreal, 5.5%; Russel Metals, 5.3%; TD Bank, 4.7%; Royal Bank, 4.5%; Transcontinental Inc., 4.3%; Bank of Nova Scotia, 4.0%; IGM Financial, 3.8%; and Telus Corp., 3.8%....

FORTIS INC. $26, through subsidiary Terasen Gas, has formed a joint venture to build an experimental biogas project in West Vancouver. This facility will capture and purify gases from a sewage treatment plant, and then inject the treated gas into Terasen’s gas distribution system. If feasible, Terasen may develop larger facilities to recover gases from agricultural waste. Buy for your income stocks portfolio of income stocks. EMERA INC. $23 earned $0.37 a share in the second quarter of 2008, up 23.3% from $0.30 a share a year earlier. Earnings at its main Nova Scotia Power subsidiary rose about 30% in the latest quarter. If you exclude a one-time tax gain, earnings at this business fell 10%. The company has asked Nova Scotia electricity regulators for permission to increase rates by 11.9% in 2009. That would help it offset rising fuel costs. Buy for your income stocks portfolio of income stocks. TELUS CORP. $39 is Canada’s second-largest provider of wireless services with 28% of the market (market leader Rogers has 37%). Telus’s strong brand and ability to bundle Internet and regular phone services into discounted packages should help it compete with new entrants in the wireless market. Also a Buy....

TELUS CORP. (Toronto symbols T $42 and T.A $40; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 321.4 million; Market cap: $13.2 billion; SI Rating: Above average) provides telephone service in Alberta, British Columbia and parts of Quebec. It also operates a nationwide wireless network. The wireless division now supplies close to half of Telus’s revenue. Ottawa now aims to increase competition in the wireless industry. In its current auction of wireless frequencies (called ‘spectrum’ in the industry), the federal government has set aside 40% for new companies....

BCE Inc. recently won a legal ruling against a lawsuit launched by its bondholders to block its $42.75-a-share takeover by a consortium led by the Ontario Teachers’ Pension Plan. BCE has also agreed to alter some of the terms to help speed up the takeover. If the buyout goes through, many of BCE’s investors will want to re-invest their proceeds in other high-yielding telecom stocks. Here are three we see as buys. The influx of former BCE investors should also help push up their stock prices....

TRANSALTA CORP. $34.95, Toronto symbol TA, rose 15% this week after it received an informal takeover offer worth $39.00 a share from a private equity partnership that includes Luminus Management. Luminus currently owns about 9% of TransAlta’s stock, and has pressured the company to sell non-core assets, buy back shares and raise the dividend. The stock currently trades about 10% below the offer. That’s mainly due to concerns that problems in credit markets will make it difficult for the buyers to borrow the cash they need to complete the takeover. TransAlta is a major supplier of Alberta’s electricity. The buyers could have difficulty winning regulatory approval if the takeover significantly increases TransAlta’s debt, and limits its ability to invest in new power plants or environmental upgrades....

TELUS CORP. (Toronto symbols T $47 and T.A $45; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 337.4 million; Market cap: $14.8 billion; SI Rating: Above average) earned $291.0 million in the three months ended March 31, 2008, up 49.4% from $194.8 million a year earlier. Per-share earnings rose 57.9%, to $0.90 from $0.57, due to fewer shares outstanding. If you disregard a one-time charge in the year-earlier quarter, earnings per share were unchanged. Revenues increased 6.8%, to $2.35 billion from $2.2 billion, thanks to a 19% rise in revenue from Telus’s high-speed Internet services. Wireless revenue rose 10% due of the growing use of smartphones. These devices let users access email and web pages. Strong demand for these services is helping Telus offset weaker growth at its traditional telephone business. Telus is a buy. The cheaper, non-voting ‘A’ shares are the better choice.

TELUS CORP. (Toronto symbols T $57 and T.A $56; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 337.9 million; Market cap: $19.3 billion; 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. These operations account for about 55% of Telus’s revenue and 50% of its earnings. The rest comes from Telus’s wireless business, which has 5.1 million customers nationwide. Telus’s revenue grew from $7.0 billion in 2002 to $8.7 billion in 2006, or 5.6% compounded annually. The company lost $0.72 a share (total $227.1 million) in 2002, due to restructuring costs following the Clearnet acquisition. But thanks to strong demand for wireless service, Telus’s profits grew from $0.93 a share ($329.8 million) in 2003 to $3.23 a share ($1.1 billion) in 2006. Cash flow per share more than doubled, from $3.88 in 2002 to $8.78 in 2006....

TRANSCANADA CORP. $38.06, Toronto symbol TRP, has teamed up with U.S.-based Williams Companies Ltd. to evaluate the Sunstone project, a proposed pipeline that would transport natural gas from the Rockies to the western United States. Sunstone could begin operations in 2011. Both companies already operate pipelines in the region, which cuts the risk of this project. TransCanada is a buy. TRANSALTA CORP. $30.36, Toronto symbol TA, fell 10% this week after activist shareholder Luminus Management withdrew its slate of director nominees....