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.
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.
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.
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.
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.
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.
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.