New Trust Rules Help Manitoba Tel

Article Excerpt

MANITOBA TELECOM SERVICES INC. $44 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; SI Rating: Average) earned $0.52 a share from continuing operations, down 14.8% from $0.61 a year earlier. If you disregard restructuring costs, profits grew slightly. Revenue fell 5.9%, to $477.9 million from $507.7 million, due to strong competition in the local and long distance businesses. The stock fell 10% on news of Ottawa’s new plan to tax income trusts, but quickly recovered. That’s because bigger phone companies like BCE and Telus could use the accumulated losses of Manitoba Tel’s struggling Allstream business telecom division to cut their own tax bills. These losses expire in 2014. The company’s $2.60 dividend (5.9% yield) is also now more attractive to income-seeking investors. Manitoba Telecom is a buy. buy…

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