Telus, BCE and BAM Quarterly Highlights

All three posted solid beats, but only one stock is benefitting.

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The Motley Fool

It’s a relatively big day for earnings in the Canadian market with several household names reporting.  Thus far, it appears that Bombardier has been the star.

Some of the supporting cast are tabled below with their reported earnings, expected earnings, and the respective change that the stocks have experienced thus far vs. last night’s close:

Company Name

Reported

Expected

Stock Change

Telus (TSX:T)

$0.56

$0.54

+1.6%

BCE Inc. (TSX:BCE,NYSE:BCE)

$0.77

$0.70

-0.5%

Brookfield Asset Management (TSX:BAM.A,NYSE:BAM)

$0.51

$0.31

-1.9%


Telus is the stud of the group after reporting earnings that exceeded expectations by almost 4%.  More importantly, even though it was “expected”, the company boosted the dividend to $0.34 per share, 11.5% higher than it was one year ago.  Telus also extended its 10% annual dividend growth model an additional 3 years to 2016.  Semi-annual dividend hikes are targeted between now and then.  In addition, a $500 million share buyback program was put in place for 2013 and it’s the company’s intention to reload on this program in each of the next 3 years.  Beat expected earnings, hike the dividend, and announce a buyback – all good reasons for the stock to be up.

BCE Inc. didn’t have the flashy bells and whistles that the Telus report had, however, the financial results appear solid.  BCE has aggressively hiked its dividend in recent years and could be hard pressed to continue this trend.  Given the Telus commitment to continue with semi-annual hikes, today’s performance discrepancy could be the result of investors switching their BCE shares for Telus.

The reaction to Brookfield’s results appears harsh given the significant beat the company pushed through.  Judging by the company’s Q1 letter to shareholders (which is excellent and well worth the read btw), Brookfield’s extensive portfolio seems to be firing on all cylinders.  At this point, a company specific reason for today’s sell-off isn’t apparent – at least to this Fool.

If you own, or are thinking of purchasing a Canadian index fund, you need to click here to receive our special FREE report “Buy These 5 Companies Instead of Following a Flawed Piece of Advice”.  Your portfolio will thank you for reading this report!

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Fool contributor Iain Butler does not own any of the companies mentioned in this report at this time.  The Motley Fool has no positions in the stocks mentioned above.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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