Both are investing for the future

Article Excerpt

BELL ALIANT INC. $27.01 (Toronto symbol BA: Shares outstanding: 227.8 million; Market cap: $6.2 billion; TSINetwork Rating: Above Average; Yield: 7.0%; provides telephone services in Atlantic Canada, as well as rural parts of Ontario and Quebec. BCE Inc. owns 44.1% of Bell Aliant. Bell Aliant converted from an income trust on January 1, 2011. The conversion forces Bell Aliant to pay income taxes. In response, the company changed the rate and frequency of its payout, starting in March 2011. The company now pays quarterly dividends of $0.475 a share. The new annual rate of $1.90 (down from $2.90) now yields 7.0%. That’s still a high payout for a dividend paying stock and high as well compared to similar telephone utilities. As well, investors who hold Bell Aliant outside an RRSP benefit from the dividend tax credit. In 2010, Bell Aliant lost $491.2 million, or $2.15 a unit. But the loss was entirely due to a $1.5-billion writedown of intangible assets. It earned…

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