This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Canada's Dial Tone

NEW YORK ( TheStreet) -- Readers familiar with my work know that a large chunk of my investment strategy is focused on dividends. As such, in the telecom world we own AT&T (T), Verizon (VZ) and CenturyLink (CTL).

Noting that T and VZ have risen approximately 30% and 16%, respectively, in the past year, they may be a bit overvalued. Today, they are great "hold" stocks, in my opinion, but new money in those companies may not be your best bet at this time.

Accordingly, I wanted to point out some Canadian telecom stocks with solid dividends and growth prospects: BCE (BCE - Get Report) and Bell Alliant, which trades on the Toronto stock exchange as BA.

BCE used to stand for Bell Canada Enterprises, but through a series of corporate machinations it is now simply called BCE.

BCE offers a 4.7% yield, is one of the largest phone companies in Canada, and has a strong balance sheet. The dividend's growth rate is at an astounding 11.03% (note that VZ's dividend CAGR is 4.66% and T's dividend CAGR is 4.32%).

Similarly, Bell Alliant is sporting a monster yield of 7.3% (a component of this is actually a return of investor principal that may be subject to special tax treatment; consult with your tax adviser or CPA prior to investing), with a dividend CAGR of 15.11% over the last five years.

Keep in mind, the figures above are in Canadian dollars, and currency fluctuation brings some added risk or, depending on your appetite for excitement, opportunity. If you want to avoid the excitement, you can simply purchase American Depository Receipts of BCE on the New York Stock Exchange. For Bell Alliant there are no ADRs.

The risk is that the U.S. greenbackr appreciates against the Canadian dollar, and that when you convert your Canadian investment into U.S. dollars you will go backwards by an amount related to the dollar appreciation. However, the reverse is also true. If the Canadian dollar appreciates against the U.S dollar then when you convert you will get more U.S. dollars, and a bump on your overall return.

I anticipate the Canadian dollar will continue to strengthen against the U.S. over the next year to year and a half. Our policies are getting more inflationary, and Canada's are not. If you have the intestinal fortitude to play this game, you could be handsomely rewarded.



At the time of publication the author had a position in AT&T, Verizon and CenturyLink.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Oliver Pursche is President of Gary Goldberg Financial Services, a boutique money management firm located in Suffern, NY. Additionally, Mr. Pursche is the Co-Portfolio Manager for the GMG Defensive Beta Fund, and a Founding Partner of Montebello Partners, llc. In his role as President of GGFS, and as a member of the GGFS Investment Committee, Mr. Pursche helps oversee the investment portfolio of over 2000 clients with over $500 million dollars in assets. Mr. Pursche frequently provides market and economic commentary on CNBC and Fox Business News, as well as often being interviewed by The Financial Times, US News and World Report, Thomson Reuters, Bloomberg Businessweek, and the Associated Press regarding his and the firms views on the latest market news and events. Mr. Pursche's views on the market and investment strategies have been featured in the Wall Street Journal, Investors Business Daily, Smart Money, USA Today and other national business publications. In addition to writing for TheStreet.com, he is also a weekly contributor on Forbes.com and BankRate.com. His daily market commentary can be read at www.betafundcommentary.com or you can listen to him on www.financialtalkshow.com weekdays at 10:00 AM.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BCE $43.97 0.57%
AAPL $131.78 -0.20%
FB $80.14 -0.50%
GOOG $539.78 -0.00%
TSLA $251.45 1.62%

Markets

DOW 18,126.12 -36.87 -0.20%
S&P 500 2,120.79 -2.69 -0.13%
NASDAQ 5,097.9760 -8.6170 -0.17%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs