This High Yield Faces Less Tax & Less Risk

Article Excerpt

MANITOBA TELECOM SERVICES INC. $40 (Toronto symbol MBT; SI Rating: Average) has unveiled a major restructuring, including cutting its workforce by 12%, mainly at its Allstream business communication subsidiary. That should help the company cope with lower revenue from two of Allstream’s former owners, who plan to shift long-distance traffic to their own networks. These moves will cost Manitoba Tel $100 million over the next two to three years, but should cut its annual expenses by $100 million. The company earned $45.1 million or $0.67 a share in the three months ended September 30, 2005. The stock got as high as $54 in March 2004. It has moved down lately on fears that it will have to cut its $2.60 dividend, which now yields 6.5%. But the cash savings from this restructuring should help it maintain the current payout. The likelihood of lower dividend taxes enhances the appeal of all secure, high-yielding stocks. Manitoba Telecom is a buy. buy…

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