Verizon Communications (VZ)

Verizon (VZ-N) or Vodafone (VOD-Q)? If he had to choose, this would be the one he would pick. They took out the minority interest in Vodafone in the US wireless business. This gives you a little bit of opportunity from a growth standpoint, because of their large embedded infrastructure in the wireless area. They also pay out a very fine dividend and are investor friendly. Dividend is very safe.

Took a hit in the correction, but he thinks it is well positioned as a content provider. He likes this one. It is a value stock with a low PE, share buybacks, nice dividend and the ability to raise it. He prefers it to others in Canada with the dividend tax credit because the metrics of the earnings are that much better.

If you believe that we are in for more rocky markets to come, you want to be in the telcos. They have the annuity style revenues, and this one is a triple play selling wireless, cable and a bunch of other different products. He likes this, but prefers Canadian ones even more because you don’t have to pay withholding tax on dividends and worry about currency. Don’t think you can go wrong if you buy this.

4.5% yield. There is no government of Canada impact like the Canadian telecoms. A trend in the US is for towers to be purchased from the providers. That would be $6 billion for VZ-N. They actually have subscriber growth.

His overall view on telecoms is that it is probably something you should lighten up on. Most of them don’t have a lot of upside.

Telcos going forward are pretty fully valued at this point. This is trading at 2X PEG ratio and 13-14 times forward earnings. That is pretty rich, but you are getting a pretty decent dividend yield of 4.5%. The dividend will probably grind higher over time.

Really likes this for the cash flow yield and the story where, if you look at companies and their peers in this space, they are very good at taking the money investors give them and making a return. They were a leader in 4G development and a lot of their competition has caught up, and she bought into the weakness because of their strong history of being the leader. Also, there is a lot of movement in the global telecoms space. If you look at the margins in the US for data, etc., versus those in Europe and other countries, there is some consolidation. Good defensive type stock. 4.3% dividend yield.

This represents an interesting opportunity. The catalyst is really the purchase of the share of the wireless opportunity that Vodafone (VOD-Q) controlled. This was accretive right from the get-go. They are growing their earnings at a fairly good pace in industry that generally does not have rapid growth. Trading at a reasonable multiple. The dividend is a very attractive lure to an entry and this dividend will have growth. With the debt loads that they carry, any increase in interest rates will be a negative to the industry. 4.3% dividend.

(Market Call Minute) Does not like the US wireless space.

One of his favourite telcos in North America. Very attractive dividend yield. One of the things that you always want to look for when you invest in a telecom stock is whether or not they have consistently maintained their network. You are going to see explosive demand for data services for the next few years. The nice thing about this company is that if you look at their capital intensity, it has been fairly consistent. Have a very good network and have a dominant position. Thinks this is going to be a good dividend growth story and a good cash flow growth story.

An attractive stock. The catalyst here is the transaction they did with Vodafone. This company is doing some very interesting things and producing a lot of cash. Pays a very nice dividend. Turnover rate of customers is very low. Debt load of over $100 billion is a worry, and if interest rates rise, interest expense is going to become a bigger issue.

US telecom sector is cheaper than the Canadian one. You are not going to see a tremendous upside in the stocks. They are much more fairly valued, so you are going to get the dividend plus maybe 5%-6% growth in the stock price. This company has some potential good growth opportunities because they now own all the wireless assets. You should get a nice 10% rate of return on this.

There is some scent of higher interest rates and telcos are burdened by a lot of debt due in the next 5 or so years so the market is nervous. They are working very hard to build out the wireless side of their business. The numbers look attractive. Buying out VOD-N was accretive from the get go. There is lots of opportunity, but you have to be aware of interest rates.

Stock vs. Stock: BCE-T vs. VZ-N. They are two different stocks. BCE gives you a fantastic dividend close to 5% and decent cash flow. Telcos in general are getting up there in terms of valuations. VZ-N should provide more growth and less dividend than BCE. It depends what you are trying to accomplish.

They bought back a big chunk of VZ-N stock from VOD-N. It has been tough to get into any company with stable, recurring revenue. Valuations skyrocketed because of this, but VZ-N did a very good job of it. Enjoyed very good growth. She has taken current uncertainty as an entry point and now sees some more good upside on the name.