Bell Aliant

I am reviewing this stock today (TSX-BA.UN) as it is a stock I follow. I got some of this stock from BCE, but I sold what I have in an odd lot offer from Bell Aliant. When I got the stock in November 2006, the ACB was set at $33.36 a share and when I sold it at the end of January 2008, I got $26.95 a share. I had small lots of this stock and at the time of the odd lot offer, most people had a Hold rating on this stock. I got dividends on this stock and according to quicken, I lost almost 5% per annum on this holding.

All my following figures are for the year ending at the last annual statement of December 2008. The results for December 2008 are unaudited and incomplete, so I have updated the spreadsheet as best as I can. First, what I find good about this stock. The Dividend growth for the last 5 and 10 years was 21% and 14%. The Book Value growth for the last 5 and 20 years was 21% and 14% and these are great figures. The cash flow growth for the last 5 and 10 years was 8% and 8.5%. Also, the Accruals are a negative number. If would be nice if the Accrual ration was below 5%, but -3.5% is not bad, as it is at least negative.

Revenue growth for the last 5 and 10 years was 9.6% and 6.6%. The 5 year figure is good, while the 10 year figure is ok. The Closing Price growth for the last 5 and 10 years was 1% and 7.3%. For the last 10 years, the stock has had high and lows, but has seldom been outside a band from about $25 to $35. You might want to buy this stock at its lows and sell at its high, but it does not seem to be to be a buy and hold type stock. The dividends have added about 5% of the return for the last 5 and 10 years. You would want, at a minimum a 7% to 8% on such a stock, and I do not see this stock producing this type of return over the long term. On the other had, the average 5 year yield on this stock is 7.5%, which is not bad.

The Asset/Liability Ratio is good at 2.56; however, the Liquidity is low at .56. It is desirable that both these ratios be 1.50 or higher. The Return on Equity (ROE) for 2007 and the average for the last 5 years is 6.6% and 23.5%. The 5 year average is good, but the one for 2008 is low. The growth in Earnings per Share for the last 5 and 10 years was -2% and 4%. I must admit that I guessed at the 2008 figure as it is not available anywhere. I suspect it is not available as it is much lower than last year, but is higher than 2006. In Unit Trust companies, the cash flow is much more important, as is the Distributable cash and these figures are not bad. However, the stock price seems to be going nowhere.

I will take about what the analysts say tomorrow.

Aliant is one of North America's largest regional communications providers serving customers in six Canadian provinces with information, communications and technology services, including voice, data, Internet, video and value-added business solutions. Through their information technology division, xwave, they also provide IT professional services in Canada and the United States. Its web site is www.bell.aliant.ca. See my spreadsheet on this company at www.spbrunner.com/stocks/ba.htm.


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.