The Successful Investor Hotline – Thursday, July 3, 2008

Article Excerpt

BCE INC. $35.15, Toronto symbol BCE, has deferred declaring its second quarter common share dividend of $0.365 a share. That will save the company $294 million. BCE feels holding on to the cash will help make the $42.75-a-share takeover price more attractive to the buyers. The buyers may wind up paying less for BCE in the wake of tighter bank lending and lower stock markets. But if the dividend deferral pushes up the ultimate price, and you hold your shares outside an RRSP, you will wind up better off — the tax rate on the capital gains you’ll realize on the takeover is less than the tax you would have paid on the dividend. BCE is still a buy. ENCANA CORP. $92.30, Toronto symbol ECA, continues to expand its holdings in the southern United States through an agreement to buy the rights to 89,500 acres in Louisiana. The purchase price of $457 million is equal to 19% of EnCana’s first-quarter cash flow of…