Telus Corp (T.TO)

Great company. Probably a little bit growthier than some of the others. On his Safety & Value strategy, it rates very, very well, probably in the top quartile of the names that he is looking at.

After the quarter there was a small miss so he likes it. It generates free cash flow and will generate 5% yield.

This was the golden boy of the telcos. Chart shows a nice up trend of higher highs and higher lows. However, recently it has started moving sideways. There is a lot of rotation going on out there and you have to be aware of it. Not a terrible looking chart, but not something that he would be jumping all over. (See Top Picks.)

This got to the top of the heap of the telco world, and has subsequently seen their numbers soften. Combining this with a weaker economic environment in Western Canada has been kind of a drag. There was also a CEO transition. Good well-run company and good dividend growth. There is no media exposure which might help them going forward. Longer-term this is a good holding.

It has done well, but growth prospects have slowed down as they compete with cable companies. You can continue to hold it, but it is not the bargain it was two to three years ago. It is okay for the dividend.

Telus (T-T) or BCE (BCE-T)? The difficult part about this company is their Western exposure. The dividend is certainly sustainable. A well-run company, but is going to suffer for the next couple of months because of their Western exposure. If you see this down a little more, that would be a good opportunity to buy.

Cutting jobs and it seems like their wireless is not going as well as it has. Thinks the telcos have had a free lunch on Rogers (RCI.B-T). Rogers had put forward this “share everything” plan, which really seems to be gaining some traction. This was trading at about 19X versus 16X a five-year average. Expensive. You could probably get this cheaper.

The most concentrated telecom in the sector. He continues to buy it for new clients and has been for a long time. There is not much competition in a space where he sees considerable growth. Every day we are doing more and more with our smart phones and so their revenue per user keeps on going up. Penetration in Canada is lower than the US and has quite a lot of room to grow. There is lots of upside to revenue from current users as well as lots of late adopters. They will be able to raise their dividend as in past years.

He was buying today. All the telcos are doing fabulous things these days. This one of the three has the best capital allocation. 3.9% dividend. The only telco that did not get into the content area. He hedges his bets by also owning two others.

(Top Pick Sep 15/14, Up 12.16%) It did what you expect in a down market. Wireless penetration continued to increase. It was a safe place to hide in a tough market.

A stable dividend grower, yielding almost 4%. A little bit of a premium on the price of BCE-T, but well worth it because the growth is better. An 18% return on equity.

The best growth projects and the best wireless growth of the 3 oligopolies in Canada. Have stated they can grow their dividend by about 10% a year, and for a while have been increasing it twice a year. TV business in Alberta has done quite well, and has taken share away from Rogers.

It makes sense if you are a long term investor. They are in the right space. Wireless is growing as we are doing more and more on our phones. The demand is there and their infrastructure is going to expand. He owns all three.

Thinks it has been unfairly punished. This has the best growth profile of the Canadian telcos, and at the same time it has the best track record of returning capital to investors through their buybacks or dividend increases.

This is at a very excessive valuation. When you look at any of the telcos, especially in Canada, they have had huge runs over the last 6 years. This is trading over his model price. Canada is a very hard place to find anything of value.