# BELL ALIANT or TRANSALTA?



## AMABILE (Apr 3, 2009)

Which one should I add ( BA or TA ) to my 
collection of long term hold dividend paying stocks ?


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## Homerhomer (Oct 18, 2010)

do we have an option to say neither?

I may be biased against TA since I lost money on them, but it doesn't look promising, and since a company already cut the dividend why would you want to add it as a long term hold. After the cut they are still having issues covering the payouts.

The other one is a trading stock with good dividend but no growth.


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## leeder (Jan 28, 2012)

@ AMABILE: You'd have to give us a reason why you want to add these two, specifically. Also, if you have extra money available, why don't you just add to your existing positions or buy a dividend ETF?


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## CPA Candidate (Dec 15, 2013)

Homerhomer said:


> do we have an option to say neither?


Indeed, I concur, buy neither.


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## Synergy (Mar 18, 2013)

I was tempted to buy some BA when it hit the $24 range back in Feb. Concerns over a potential / future dividend cut and poor growth outlook kept me away. We know what happened to TA!


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## PatInTheHat (May 7, 2012)

I also would say neither. NPI EMA or INE would be my preferences in this space.


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## Canadian (Sep 19, 2013)

I used to own BA but sold as soon as I noticed all the freebies and discounts they were offering for people to sign up for their fibre op.


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## My Own Advisor (Sep 24, 2012)

If a bunch of your other stocks are safe, more secure, more established blue-chip companies or better still maybe, you're an indexer, take 10% of your portfolio and buy both if you really want.

Keep the other 90% of your portfolio indexed.

Andrew Hallam's advice.


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## thompsg4416 (Aug 18, 2010)

I bought some BA a while back as a buy and hold. Solid Div you won't see much capital gain though. 

TA seems like a basket case to me.


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## doctrine (Sep 30, 2011)

Neither is for me. BA initially looks tempting, but the lack of dividend growth for years is telling. Stocks are risky enough that if you can't reasonably expect the stock price and dividends will be higher 5 years out (and for both BA and TA this is true), it's probably not worth it.


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## leeder (Jan 28, 2012)

The only thing compelling about BA is that the valuation metrics look fairly cheap. Fairly low P/E, low P/B, low P/CF. Payout is less than 100% of earnings, so I think dividend is sustainable. Not overly leveraged. The problem is that there's no growth in the name. The only hope is that BCE decides to buy out BA at a premium, which I don't think will happen in the near future.


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## Canadian (Sep 19, 2013)

I see no reason for BCE to buy out BA if it's not growing. I think BA has reached critical mass in the Atlantic region. They spent a lot of money on their fibre op infrastructure and the deals they are offering to new customers screams that they are desperate for incremental revenues.


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## Westerncanada (Nov 11, 2013)

I took a $5000K Position this week at 12.66/Share.. and pretty happy with that overall. There's obviously significant downturn with the dividend payment being cut and other concerns.. but on the flipside I'm confident that Alberta's Economy will push organically the next ten years and keep this company (Power fixing or not) running strong... and to get in a stock that pays that kind of dividend at a $12 share is definitely under valued IMO.


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## Longwinston (Oct 20, 2013)

Canadian said:


> I see no reason for BCE to buy out BA if it's not growing. I think BA has reached critical mass in the Atlantic region. They spent a lot of money on their fibre op infrastructure and the deals they are offering to new customers screams that they are desperate for incremental revenues.


FibreOP hasn't even passed 50% of the homes in the BA footprint. It's not a growth stock, but there is definitely room for growth. It's only a matter of time before BCE buys out the rest of BA as well. They already own 40+% of it.

I am long neither, but would take BA over TA in a heartbeat.


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## Moneytoo (Mar 26, 2014)

BA has been recommended by fools.ca last Friday: http://www.fool.ca/2014/04/11/avoid-market-volatility-with-these-3-stocks

I don’t know whether the market will be weaker going forward. As investors, all we can do is position our portfolios to either take on risk or avoid it. If you’re looking for stocks that will be less affected by the next downturn, check out these three stocks.

Bell Aliant

Investors looking for safe stocks will look at a stock’s beta, a measure of risk. A stock with a beta of 1 will be expected to perform as well or as poorly as the overall market. A stock with a beta of 2 would be twice as volatile as the market as a whole, and a stock with a beta of 0.5 would be half as volatile.

Bell Aliant (TSX: BA) is one of the least volatile stocks in Canada, having a beta of just 0.16. It’s a pretty good example of a “widows and orphans” stock.

Boring isn’t always bad though. Aliant is in the business of providing wireless, television, phone, and internet service exclusively in atlantic Canada. It’s a steady, albeit unspectacular business. Profit margins are fat, the company is the clear leader in its market, and has a dividend yield exceeding 7%.

Bell Aliant investors are just patiently waiting for BCE, which owns 44% of Aliant, to come in and scoop up the share it doesn’t already own. Until then, investors are left with a steady company and a fat dividend, both attractive features during an uncertain market.

____________

My husband and I looked at more than 20 stocks tonight (recommended by various sources) - and BA is the only one that we decided to buy (everything else looks too expensive at the moment...)


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## bmoney (Jun 22, 2013)

I owned BA for the dividend and low beta, but sold my position. They are in a competitive market with very high acquisition costs, and there dividend pay-out ratio will exceed 100% this year - which is well known but it still concerns me. 

What sealed the deal for me was their Q4 figures, they lost subs in every segment but data. Yes they are making the right investments in data, but their other segments are doing poorly and dying a slow death. BA management admits to technological substitution, and it's going to be increasingly more costly and difficult to convert more people to new data services, because of geography and the expense associated of building new networks. I don't know for certain, but I imagine most of the older services are being delivered through old networks, such as copper wire that was paid for long ago. I just don't see much growth, and the dividend could be a hinderance if they require more capital.


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## My Own Advisor (Sep 24, 2012)

BA will eventually get scooped up into BCE. Just a hunch. Until it does, you can collect dividends. Not a bad deal.


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## yyz (Aug 11, 2013)

It's also likely that BCE in order to expand probably can't keep buying up TV/Media outlets.The competition bureau has probably seen enough so this would be a way for them to expand their reach.


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## My Own Advisor (Sep 24, 2012)

True yyz. 

I hold TA, I will continue to do so.


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## doctrine (Sep 30, 2011)

I don't think BCE will buy BA at all. That idea has been going around for years - they'll only do it if they can't find better returns elsewhere, and they'd need pretty low ROE to justify it. I'd rather own the parent company. BA pays 110-130% of net earnings and will slowly lose book value, especially as they are barely treading water on revenues and have little upside potential.


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## Canadian (Sep 19, 2013)

Bell Aliant is also desparately offering deals/perks for signing up for fibre op (i.e., PS4, iPad, low rates for the first 12 months). I doubt they are making much profit off these new customers and there's not much to inspire loyalty to a cable company if deals from other companies are available.


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## My Own Advisor (Sep 24, 2012)

Own BCE and happy to do so doctrine. DRIPping every quarter, only 1 share though. You? Own BCE?


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## liquidfinance (Jan 28, 2011)

Canadian said:


> Bell Aliant is also desparately offering deals/perks for signing up for fibre op (i.e., PS4, iPad, low rates for the first 12 months). I doubt they are making much profit off these new customers and there's not much to inspire loyalty to a cable company if deals from other companies are available.


But in the areas served by BA do you have much of a choice?


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## Canadian (Sep 19, 2013)

liquidfinance said:


> But in the areas served by BA do you have much of a choice?


There is Eastlink - it services the same areas. But there are not many options for consumers in the Atlantic provinces. There is not the population density in these provinces to warrant much competition. However, I still don't think it makes BA an attractive investment. They have resorted to price competition in sparse geographic regions, selling a product that offers no brand loyalty, all just to cover the cost of capital intensive investments.


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