MANITOBA TELECOM $28.80 (Toronto symbol MBT; Shares outstanding: 78.9 million; Market cap: $2.3 billion; TSINetwork Rating: Average; Dividend yield: 4.5%; www.mts.ca) gets 60% of its revenue from its MTS division, which has 1.3 million TV, telephone and wireless users in Manitoba. The other 40% comes from Allstream, which sells phone and Internet services to businesses across Canada.
In May 2015, the company completed a strategic review of its operations. As a result, it now plans to cut 25% of Allstream’s workforce and reduce the subsidiary’s capital spending by 20% to 30% in 2015. These moves should save Manitoba Telecom $50 million annually by the end of 2016.
In addition, the company will contribute $120 million to its underfunded employees’ pension plan, eliminating the need for additional payments over the next two years. It has also cut its dividend by 23.5%: the new annual rate of $1.30 a share yields 4.5%.
Meanwhile, excluding restructuring and other onetime costs, Manitoba Telecom earned $0.31 a share in the three months ended June 30, 2015, down 16.2% from $0.37 a year earlier.
Revenue declined 1.2%, to $398.3 million from $403.3 million.
The stock is up 15% following the strategic review, partly because the plan makes a takeover by a larger telco, like BCE or Telus, more likely. That’s largely why Manitoba Telecom trades at a high 23.4 times the $1.23 a share it will likely earn in 2015.
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Privacy Policy and Terms of Use
The Successful Investor Inc. and its affiliate Successful Investor Wealth Management (referred to hereafter as TSI Network) know that you care how information about you is used and shared, and we appreciate your trust that we will do so carefully and sensibly. This notice describes our privacy policy. By visiting websites owned by or associated with TSI Network, you are accepting the practices described in this Privacy Policy.
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We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
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We are continuously in the process of improving our sites and services. If any new features or policies require a change to this current policy, we will post a clear notice of this change on pages of our site where the privacy policy appears. The principle behind this privacy policy is to collect information with your knowledge and consent.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
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Does TSI Network Use the Information It Receives?
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Changes to this Policy
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