Manitoba Telecom rings up stronger earnings: Manitoba Telecom shares feature low risk, high returns and good comparative value - Services

Money Digest, August, 1997

The forecast for the recently privatized Manitoba Telecom Services (TSE; Symbol MBT; recent price $14.75) shows that it expects to earn $84.8 million this year. This year-over-year increase of 12% amounts to $1.21 per share.

At $14.70 a share the price-earnings ratio is an attractive 12.2, considerably lower than those obtained for other comparable Canadian telephone companies. This makes the stock cheap by comparison. The stock pays $0.68 in dividends providing a yield of 4.6%. Even more importantly, its payout ratio is only 56.2, meaning that it has room to increase its dividends if it chooses to do so.

With the market at high levels, we believe that investors should move to stocks that provide higher value. In our opinion, Manitoba Telecom is one of those stocks that provide comparatively better value, even among telephone company stocks.

If you're looking for, low-risk, high return stock for your portfolio, you may want to consider Manitoba Telecom.