Manitoba Telecom for stable growth: telco combines a high-tech network with strong financials
Money Digest, August, 2000
The company
Manitoba Telecom Services Inc. (TSE: MBT; Recent price: $26.50; Website: www.mts.mb.ca) is the fourth largest telecom company in Canada.
Manitoba Telecom is a full-service provider of local, long distance, wireless, directory and multimedia telecommunications services.
Its province-wide network is all-digital and is fibre optics-based. The company has more than 688,000 access lines and over 145,000 cellular customers. It has very strong cash flow and trades at an above-average multiple due to its strong performance.
Financials
During the first quarter of this year, MBT reported earnings per share of $0.40. Its revenue growth was 5.5% and EBITDA growth was 6.0%. Its current dividend yield is 2.9% with a price-earnings ratio of 19. Its book value is around $11.5, so it is trading about 2.3 times its book value.
Current developments
Bell Intrigna, a joint venture between Bell Canada (1/3) and MBT (2/3) for the provision of a Competitive Local Exchange Carrier, has focused on business accounts in Western Canada. The company generated $5 million in revenue during the first quarter and is on target for $50 million for the year 2000.
Growth prospects
Manitoba Telecom is one of the better performing Canadian companies and provides a solid growth opportunity. At current levels, Manitoba Telecom offers an attractive yield and has good-potential for capital gains. MBT is suitable for growth-oriented conservative investors.
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