This Dividend Seems Safe for Now

Article Excerpt

MANITOBA TELECOM SERVICES INC. $39 (Toronto symbol MBT; SI Rating: Average) earned $0.22 a share (total $14.6 million) in the fourth quarter of 2005, down 65.1% from $0.63 a share ($42.3 million) a year earlier. However, if you disregard unusual items, per-share profits fell 12.2%, to $0.65 from $0.74, due to lower earnings from Allstream, its national long distance division. Revenue slipped to $503.7 million from $503.9 million. The stock has come under pressure in the past few months due to concerns that new local phone services will cut into Manitoba Tel’s revenue. The company is also facing strong competition from other wireless providers, particularly in Winnipeg. Manitoba Tel now plans to cut capital spending by 21.1%, from $342.1 million in 2005 to $270 million in 2006. It also aims to cut its annual costs by $100 million. That should give it enough cash to maintain the $2.60 a share dividend, which yields 6.7%. Manitoba Telecom is still a buy for long-term gains…

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