Bell Aliant (BA.TO)

(Market Call Minute.) Numbers last quarter were on the shade of disappointing but revenues are good.

Has done better than he thought it would. A bit expensive, but has a high yield. There is probably an underlying thought that Bell Canada (BCE-T) will take them out which puts a floor on the valuation to a certain extent. Not a lot of growth. Spending a lot of money taking fibre to the homes to try to bring in the IP TV and compete with bundling. Payout ratio is pretty high and doesn’t know if it is sustainable infinitum. At some point they may have to look at it. 6.8% dividend yield, but not this year.

Every once in a while people get concerned about the dividend. BCE (BCE-T) owns a good chunk of this. Located in the Maritimes, Québec and Northern Ontario. Have done very well in laying fibre optics in recent times. He bought the stock for yield which it has provided and he is not worried about it. Will add to his position when it gets down to the $26 area and if it gets up to $30 he will take a little off the table.

Really likes it. It is the safest, highest yielding stock out there. They installed fiber to the home and free cash flow is growing. Thinks BCE will acquirement some day. Expensive because of the high yield, but now it is a growth company. Hold it until Bell buys you out. Questions why Verizon would come to Canada. It does not make economic sense.

Pays a nice dividend but don’t expect much capital appreciation. Have done an excellent job of building out their fibre capacity. Their biggest problem is that their market is somewhat restricted, so where is their real growth going to come from. Feels the dividend is pretty secure. On valuation, it is neither a bargain nor is it overvalued.

Longer-term, the potential of this company is limited. Population base is not expanding at a rapid rate. He thinks ultimately this will be absorbed back into Bell Canada (BCE-T) but he would not buy the stock on anticipation of this.

The breakout that occurred this year is legitimate and the stock will probably work its way higher. Yielding 6.6%.

The dividends are in question over the long term, would not buy for the dividends.

With a 7% dividend that is not covered, he prefers not to own this kind of company. Prefers T-T (Telus Corp.).

Relatively high yield of almost 7%. Strong management team and good operating platform. Biggest challenge is that it is a pretty mature operating platform and focused primarily on land lines, which is a business in decline. Have been able to supplement their growth with fibre to the home build out which has allowed them to supplement their growth. Safety of the dividend is going to rear again through 2013-2014. If you own, she would recommend you hold for another 6 months.

Has this one in income oriented portfolios and is not looking for capital gains. Has been concerned about the coverage on the dividend but he thinks the dividend is fairly safe. BCE (BCE-T) owns a big chunk of it. Covers the Maritimes, Québec and part of northern Ontario. Have made good progress in the fibre-optic area.

7% yield. People were concerned that their payout ratio was well above their earnings but this year it will be about 85%. Capital expenditures are coming down. You won’t see much capital appreciation but you should have about a 10%-12% rate of return.

Big dividends but not a lot of capital gains. They had a large spending program in laying fiber optic. Given the regional focus you wonder what the constraints to growth are going to be going forward. Doesn’t see huge increases in revenue per customer over time. Ok to hold it just for the dividend even though it is a relatively high payout ratio. He has a little BCE-T.

Preferred E series 4.25%. A rate reset and a recent new issue. Possibly callable in September 2018 and, if they don’t redeem them, the reset spread is 264. Current yield of 4.18%. Yield to call (2018) is 4.08%.

(Market Call Minute.) Feels that the risk of them reducing their dividend some day is high.