BCE Inc. (BCE.TO)

He was quite upset with the government and its stance on the telcos. They were dead set it seemed in getting a 4^th competitor into Canada and were willing to bend over backwards. Existing telcos have tremendous advantage over incoming companies. For a combination of yield and moderate growth, it is hard to beat this company.

Bell Canada (BCE-T) and Rogers (RCI.B-T). What are the benefits of getting into each of these? Prices have not yet been fully reflected yet from their highs on the false alarm of a new entrant from the US. This may be an opportunity. In terms of valuation, these are both pretty much neck and neck at 7X EBITDA. Both have opportunities in being able to shift their business from the wireline space to wireless. As a source of income this one would probably be best, but growth opportunities would probably lie with Rogers.

If you just want income, hold on to it. Dividend is safe and decent long term income flow. Concerned about regulatory risk with all telecoms.

Likes both Rogers and BCE. Continues to see the dividends growing on both, which are both good investments. Recent regulatory changes should not impact either of them much. He owns all 4 of these.

Owns it as a yield play with only some growth. Dividend will continue to grow on a regular basis. Likes that they expanded more on the media side, which is not so regulated as telecom.

Thinks Rogers is a better buy. Wait for a dip and buy this sector.

(Top Pick Jun 26/13, Up 6.39%) Would buy it here. He never believed that a big US telecom player was interested in Canada but the stock has not recovered from it and it was hit by the yield trade. Safe dividend that should increase once per year. Doing well on smart phone penetration. Some really good upside at this price.

Bell Canada (BCE-T) versus Rogers (RCI.B-T)? These are both benefiting from the recent news that international players are bidding on Spectrum. Spectrum licenses will cost both of them lower now. It looks like a 4^th carrier is not viable. Between the two he would be putting his money on Rogers. This company has some headwinds. The Astral purchase is not giving them as much free cash flow as he would’ve liked. Experiencing higher CapX to deploy their FIBE and wireline margin erosion has bugged them for a long time.

Preferred G Series? This was a precursor to the “rate resets” and was known as a fixed floater. On a rate reset, you know what the spread is going to be but on this one, you don’t know.

He debated having it a Top Pick today. Fundamental progress is slowing here a bit but over well it is a great, well managed company with good dividend policy.

(A Top Pick August 24/12. Up 6.41%.) Good management and some of their marketing approaches are good as well. He can see the telecom area continuing to be a growth area.

In hindsight, the whole Verizon (VZ-N) thing seemed to be a red herring. Even if other companies came into Canada, he doesn’t expect it would affect valuations on our companies. There is a lot of support in the $40 range. Have lots of room to raise the dividend. Yield of 5.33%.

The Verizon issue is now history but it remains down due to the nature of the market right now. There is a lack of certainty as to how foreign players can or do compete in the future. These are great businesses. The oligopoly could be broken. Wait until we get clarity.

All telcos really sold off through the spring and summer, both in the US and Canada. Believes that we have seen the lion’s share of the initial move higher in the 10 and 20 year bond rates and that is likely to neutralize over the next little while. Interest sensitives in general will do better over the next little while. He still prefers to own something that gets a little bit of a lift from a better economy, like financials, but for those looking for yield, this is pretty attractive. He would prefer Telus (T-T), which has a little bit better internal growth and will buy back shares and give you dividend increases of 10% a year for the next 3 years.

(A Top Pick May 25/12. Up 17.2%.) When he recommended this, he felt that interest rates were going to stay low and that people who were into GICs would be moving over. Doesn’t find this attractive anymore.