BELL ALIANT INC. (Toronto symbol BA; www.aliant.ca) sells phone and Internet services to 2.5 million customers in Atlantic Canada and rural Ontario and Quebec. It also provides wireless services through an alliance with BCE, which owns 45% of Bell Aliant.

The company continues to replace copper wires with fibre optic cable. That’s attracting more highspeed Internet and digital TV customers. Strong demand for these services is also helping offset lower revenue from traditional phone services, which still supply 52% of the company’s revenue.

Bell Aliant’s high-speed fibre optic systems now reach 725,000 homes, up from 650,000 at the start of this year. By the end of 2013, it plans to expand its network to 800,000 homes.

In the three months ended June 30, 2013, Bell Aliant’s revenue rose 0.6%, to $691.8 million from $687.7 million a year ago. Before one-time items, earnings fell 4.9%, to $0.39 a share from $0.41.

The company expects to spend $525 million to $575 million on capital upgrades this year. Its quarterly dividend of $0.475 a share provides a 7.1% annualized yield.

Dividend paying stocks: Brookfield raises dividend by 5% and boasts 5.3% yield

BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. (Toronto symbol BEP.UN; www.brpfund.com) owns 196 hydroelectric generating stations, 11 wind farms and two natural-gas-fired plants. In all, it has 5,900 megawatts of generating capacity.

Roughly 35% of Brookfield Renewable’s generating capacity is in Canada, with another 50% in the U.S. and 15% in Brazil.

In the three months ended June 30, 2013, Brookfield’s revenue rose 43.6%, to $484 million from $337 million a year earlier. Cash flow jumped sharply, to $187 million, or $0.71 a share, from $87 million, or $0.33.

The gains resulted from a 52.8% increase in electricity generation due to favourable rain and wind conditions, compared to poorer conditions a year ago.

To further boost its power output, the company plans to keep acquiring or building hydroelectric plants and wind farms. To cut its risk, it sells virtually all of its electricity under long-term agreements that are an average of 24 years long.

Brookfield raised its quarterly distribution by 5.1% in April 2013, to $0.3625 from $0.345. That gives the units a 5.3% yield.

In the latest issue of Canadian Wealth Advisor, we examine Bell Aliant’s cash flow outlook in light of its capital spending, and if it will be able to maintain its current dividend. We also look at Brookfield’s cash flow forecast, and whether it can keep raising its dividend. We conclude with our clear buy-hold-sell advice for both of these stocks.

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If you invest for income, is it important to you that a stock raises its dividend periodically? Or is it enough that the dividend remains stable? When you have owned a stock that reduced its dividend, were you quick to sell the stock or were you willing to hold it?