Wednesday, 8 August 2012

BCE Raises Dividends and More on the Astral Deal

Bell beat analysts' estimates for the quarter and decided to increase dividends distributions from $2.17 annually to $2.27 annually. This is great news for me especially because it's been awhile since any of my companies hiked their dividends. This also helps me rebuild my yield what with the fact that Canfor slashed its dividends.

Another reason that this is great is that I'll find myself with even more shares of Bell when the Astral deal closes. A recent issue with the deal has been a group of competitors, have complained that the deal would result in BCE having too much control on the market which would ultimately mean an increase in consumer costs due to less competition. However it seems like the complaint is more about keeping Bell out of their playground as opposed to the genuine concern for the consumer especially because the Astral deal would give Bell a much larger presence in Quebec where Quebecor Inc. (one of the groups with the complaint) is a dominant player.

There is always the possibility that the deal falls through due to government intervention which in that case my position in Astral would falls dramatically. However, I feel that this is a minor bump in the road and unless a more serious obstacle appears the deal carry on as planned and close in the fourth quarter. When it does, I'll be getting more Bell shares and some cash in exchange for my Astral shares which would further my overall yield and increase my position in one of the big telecoms of the country.

-the Paperboy

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