Bell Aliant is still a buy

Article Excerpt

BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $25.30 (Toronto symbol BA.UN: Units outstanding: 127.3 million; Market cap: $3.2 billion; SI Rating: Above Average; Dividend yield: 11.4%) will convert to a regular, dividend-paying corporation before Ottawa starts taxing income trusts on January 1, 2011. The conversion will force Bell Aliant to pay income taxes. To offset this cost, the trust will cut its current monthly distributions of $0.2417 a unit, which now yield 11.4%. Still, it’s likely that the payout will remain high compared to similar telephone utilities. As well, the conversion may prompt BCE, which owns 45% of Bell Aliant, to buy the remaining units. While that’s not reason enough to buy, the possibility of a takeover adds to Bell Aliant’s appeal. Meanwhile, Bell Aliant earned $373.0 million in 2009. That’s up 10.8% from $336.6 million in 2008. Earnings per unit rose 11.5%, to $2.33 from $2.09, on more units outstanding. Cash flow per unit rose 8.0%, to $3.39 from $3.14. Revenue fell…

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