Telcos are under pressure due to a concern about their ability to grow earnings because of new internet protocols. Dividend yield should be fairly steady.
Torn on this stock. If you want the pure income, would go with BCE (BCE-T) or if you want growth, go with Telus (T-T). Pays a decent yield around the 4% level.
People buy these stocks, not for organic growth, but for yield. As the 10 year Canada bond goes up, the dividend yields on small telecoms become less attractive.
They are in the process of converting a lot of their rural wireline assets into an income trust. Bill also be combining some assets with Bell Canada (BCE-T). Looking favourably on these moves. Not a lot of growth out of these areas, but stable cash flow and limited competition.
Keep in mind the success Bell Canada has had in bringing Bell Norbique (BNQ.UN-T) to the market. As a trust it will be a similar structure but won't have the growth component of the cellular phone. There will be some capital expenditure bumps along the road.
Becoming a trust and will hold all the rural lines that Bell (BCE-T) and Aliant currently own. Distribution will probably be around 7%. You'll end up with an 8/9% return.
Becoming a trust on July 10. A regional player. When the assets go into the trust, they will not have the high growth of the wireless business. Distributions should be very secure but with a modest capital appreciation.
Your Watchlist
Add stocks to watchlist to monitor them daily and get important alerts.