Bell Aliant (BA.TO)

BUY
A rural wire line telephone company in eastern Canada and some rural parts of Ontario and Quebec. Wire line is a shrinking business. Not a lot of capital expenditure so they are paying income out to shareholders. Not a growth business. Pays about 10%.
BUY
(Market Call Minute.) This gives you a 10% yield with minimal downside risk.
COMMENT
With East Link coming into Halifax and doing Voice over Internet this company lost about one third of its market share in landlines in 3 years. Probably all the adapters have moved and you do have both landlines and mobile. The real problem is that it is paying out almost 96% of its cash flow so when it starts paying tax in 2010, it may have to cut its payout.
COMMENT
Distribution is fairly safe and solid. Decent yield. Should continue to do reasonably well. There are more attractive opportunities in the telecom sector such as Telus (T-T), Bell Canada (BCE-T) and Manitoba Tel (MBT-T) and the yields are not too far off this one.
BUY
Telecom has not been a space that has been performing well. There are concerns about wire line revenues as well as the wireless side. If he had to pick one it would be this, which is paying about 9.5%. Just recently raised their distribution and only paying out about 90% of cash flow. Technically it has been performing better than most of the telecom stocks.
TOP PICK
Well protected and great payout. The dominant telco in eastern Canada. Payout of $2.90 giving you over 10%. Wire line telephone is not a growth business, so you don't own this for growth, only income.
BUY
(Market Call Minute.) Has been hurt with the liquidity. Still have the landlines and a very conservative capital structure. Expect it will recover in the telco space.
TOP PICK
Mostly into wire line on the east coast and it is not a growing business but the payout is over 10% while you are waiting for the market to turn around. Stable business.
COMMENT
Primarily wire line in Atlantic Canada. Line erosion seems to be stabilizing. Made an acquisition of Bell Nordique giving them a small wireless exposure in northern Quebec and Northern Ontario. Some concern that they might sell their entire stake of their 42% holding of their parent company BCE (BCE-T). He doesn't think they will.
HOLD
(Market Call Minute.) Probably at little more recession resistant. Has good growth in their wireless sector.
WEAK BUY
Relatively safe place to be. After BCE is gone, it will be one of the last telecom utilities you can get exposure to. Distribution should be pretty safe. Somewhat constrained in where growth is going to come from in the future. Would look at it for the yield but not capital appreciation.
TOP PICK
The dominant phone company in eastern Canada. At current prices it has a 10% payout. In a declining business and it's not likely distributions will grow much, but in a bad market, he is happy to sit with 10%. When the market starts to lift, you will probably get some lift in the stock.
HOLD
Has corrected in line with the broader equity markets. This is a good, steady, core holding. Not a lot of excitement. Will deliver a pretty good, steady, stable yield. There might be 1%-2% annual growth in the underlying business.
BUY
(Market Call Minute.)
BUY
Doesn't feel the government announcement on wireless (spectrum) will have any effect on this stock. One of the few trusts that he likes.
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