Verizon Communications Inc.

QUAKER CHEMICAL CORP. $25 makes lubricants and specialty chemicals that protect mechanical parts from corroding. Oil is its main raw material, so it is gaining from lower oil prices. Rising industrial activity in developing markets such as China, Brazil, India and Russia is also spurring its growth. As a result, Quaker raised its quarterly dividend by 2.2%. It now yields 3.8%. Buy. CEDAR FAIR L.P. $13 recently cancelled a friendly, $11.50-a-unit takeover offer after its investors complained the price was too low. The amusement-park operator now aims to strengthen its balance sheet with a refinancing, including issuing $500 million in long-term notes. However, its total debt of $1.7 billion is still a high 2.4 times its market cap. Hold. BUCKEYE PARTNERS L.P. $56 continues to raise its quarterly distributions. The oil-pipeline operator will pay $0.95 a unit in the second quarter of 2010, up 5.6% from the first quarter. The new annual rate of $3.80 yields 6.8%. Best Buy....

ATLANTIC TELE-NETWORK $44.75 (Nasdaq symbol ATNI; SI Rating: Speculative) (340-777-8000; www.atni.com; Shares outstanding: 15.3 million; Market cap: $683.9 million; Dividend yield: 1.8%) has completed its purchase of more than 895,000 wireless accounts from Verizon Wireless for $200 million in cash. The subscribers are mostly in rural areas of Georgia, North Carolina, South Carolina, Illinois, Ohio and Idaho. The deal should close by the end of this year. Verizon Wireless had to sell these accounts for regulators to approve its purchase of Alltel in January 2009. Regulators also had to approve Atlantic’s purchase of the accounts; the company recently received approval from the U.S. Department of Justice and the Federal Communications Commission. These new accounts will bring Atlantic’s total number of wireless subscribers above one million, up from 200,000 today, and make it one of the largest wireless carriers in the U.S....

WYNDHAM WORLDWIDE, $26.81, symbol WYN on New York, reported higher-than-expected first-quarter profits this week. In the three months ended March 31, 2010, Wyndham’s earnings per share, excluding one-time items, fell 17.1%, to $0.34 from $0.41. Despite the drop, the latest earnings beat the consensus estimate of $0.30 a share. Revenue fell 1.7%, to $886 million from $901 million. Here too, revenue was higher than forecast, even though it declined: the consensus revenue estimate was $848 million. The lower revenue and earnings were mostly the result of an accounting change. The economic recovery is pushing up travel demand and increasing the number of guests at Wyndham’s hotels....

Demand for wireless services continues to rise strongly. New phones and devices, such as Apple’s iPad and Amazon’s Kindle e-book reader, should continue to spur demand for wireless service. We still have a high opinion of Apple and Amazon. But their high share prices make them vulnerable to sudden setbacks. We think network operators like AT&T and Verizon provide a conservative way to profit from the popularity of wireless devices. That’s because they have wider and steadier revenue sources than device makers. AT&T INC. $26 (New York symbol T; Income Portfolio, Utilities sector; Shares outstanding: 5.9 billion; Market cap: $153.4 billion; Price-to-sales ratio: 1.3; Dividend yield: 6.5%; WSSF Rating: Average) gets 50% of its revenue by selling traditional telephone services to 45 million customers in 22 states. The company’s wireless division has 87 million customers nationwide, and accounts for 45% of AT&T’s revenue. The remaining 5% comes from selling ads in telephone directories....

APPLE INC., $235.97, Nasdaq symbol AAPL, rose 2% this week on media reports that the company will soon launch a new version of its hugely popular iPhone. Aside from being thinner than the current iPhone, the new model will likely have more memory and a number of new features. Apple may also be developing an iPhone that runs on code division multiple access (CDMA) cellphone networks. Right now, the iPhone uses global system for mobile communications (GSM) technology. More cellphone providers use GSM than CDMA. However, some large U.S. carriers, including Verizon (see below) and T-Mobile, use CDMA networks. A CDMA iPhone would let Apple expand its market share by making the iPhone available to these carriers....

ATLANTIC TELE-NETWORK $41.59 (Nasdaq symbol ATNI; SI Rating: Speculative) (340-777-8000; www.atni.com; Shares outstanding: 15.2 million; Market cap: $632.2 million; Dividend yield: 1.9%) gets 49% of its revenue from its 80% interest in Guyana Telephone and Telegraph Company. The rest comes from wireless interests in the Caribbean and Bermuda, and from small U.S. holdings. Atlantic is working to finish the integration of over 800,000 wireless accounts from Verizon Wireless last year. It paid $200 million for these accounts. The subscribers are mostly in rural areas of Georgia, North Carolina, South Carolina, Illinois, Ohio and Idaho. ...

DragonWave Inc., $12.91, symbol DWI on Toronto (Shares outstanding: 36.1million; Market cap: $466.5 million), makes equipment that wirelessly transmits broadband voice, video and other data. This lets customers send and receive data in locations that fibre-optic telecommunication networks have not yet reached. DragonWave first sold shares to the public for $3.95 each, and began trading in April 2007. In the three months ended November 30, 2009, DragonWave’s revenue jumped to a record $55.8 million from $10.7 million a year earlier. The company earned $12.6 million, or $0.39 a share, compared to a loss of $221,000, or $0.01 a share, a year earlier....

VERIZON COMMUNICATIONS INC. $32 (New York symbol VZ; Income Portfolio, Utilities sector; Shares outstanding: 2.8 billion; Market cap: $89.6 billion; Price-to-sales ratio: 0.9; WSSF Rating: Average) has 33.4 million phone customers in 28 states. It also has 89 million wireless users. The company is the exclusive carrier of Motorola’s new Droid smartphone, which uses the Android operating system developed by Internet search provider Google. This new phone should help Verizon compete with the iPhone. Meanwhile, Verizon earned $0.60 a share (or a total of $1.7 billion) in the third quarter of 2009. That’s down 9.1% from $0.66 a share (or $1.9 billion) a year earlier. These figures exclude integration and other costs related to Verizon’s January 2009 purchase of rural wireless carrier Alltel Corp. Revenue rose 10.2%, to $27.3 billion from $24.8 billion, mainly because of Alltel....

The best way to profit from rising use of smartphones and other wireless devices is through carriers, such as AT&T and Verizon. That’s because they have more revenue sources than smartphone makers. These include traditional phone, Internet and TV services. This diversity limits their reliance on a single device. AT&T INC. $27 (New York symbol T; Income Portfolio, Utilities sector; Shares outstanding: 5.9 billion; Market cap: $159.3 billion; Price-to-sales ratio: 1.3; WSSF Rating: Average) sells traditional telephone services to 45.7 million consumer and business customers in 13 states. Its wireless division has 81.6 million customers nationwide. Since 2007, AT&T has been the exclusive U.S. carrier of the hugely popular Apple iPhone. The company attracted a record 3.2 million new iPhone users in the three months ended September 30, 2009. About 40% of these customers were new to AT&T....

DragonWave Inc., $9.33, symbol DWI on Toronto (Shares outstanding: 36.1 million; Market cap: $337.1 million), makes equipment that wirelessly transmits broadband voice, video and other data. This lets customers send and receive data in locations that have not been reached by fibre-optic telecommunication networks. The company first sold shares to the public for $3.95 each, and began trading in April 2007. In the three months ended August 31, 2009, DragonWave’s revenue jumped to a record $35.5 million from $10.6 million a year earlier. Earnings were $6.3 million, or $0.22 a share, compared to a loss of $1.7 million, or $0.06 a share, a year earlier....