Monday, September 22, 2008

Manitoba Telecom Service 2

This stock has had a lot of ups and downs over the past 5 years. There has been a lot of opportunity to overpay for this stock during that time period. I made money on this stock, as I did not overpay for it. This stock has not done as well as the TSX index or the Utility Index over the past 3 to 5 years. It has only done better when you compare this stock over the last 10 years. Also, note that the indexes do not consider dividend payments, and almost half the return on this stock is dividend payments.

Is it a good buy? Some analyst are giving it a Hold rating and some a Buy rating with the average being a Buy. Most expect that the Earnings per Share (EPS) will be up this year. The current yield at 6.4% is higher than the 5 year average of 4.7%. The P/E at 15.6% is slightly lower than the 5 year average of 16.9%. The Accrual Ratio is not as good as it was in December 2007, but it is still negative. (It is always good to have a negative accrual ratio.)

This stock would be considered a medium risk. It is in the Telecommunication section of our market, which will shortly have little in this section once BCE goes private. If you want to diversify your portfolio in this section, it may not be a bad stock to have.

This company is a full-service communications company. It serves residential and business customers in Manitoba. Their Allstream division serves national business consumers. Its web site is www.mts.ca/. See my spreadsheet at www.spbrunner.com/stocks/mbt.htm. I have reloaded my spreadsheet as I have updated it with the June 2008, 2nd quarter report.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

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