BCE Inc. (TSX: BCE, NYSE: BCE) received the final approvals to conclude its $3.9 billion acquisition of MTS, a regional provider of telecommunications services.

The transaction will be effective on March 17, 2017, and it will add 710,000 new wireless, Internet, and IPTV subscribers, expanding BCE’s base by 5%.

Management expects to realize cost-saving synergies of $100 million annually. Additionally, BCE plans to use MTS’ tax losses of $300 million to reduce its tax bill.

As part of the transaction, BCE agreed to maintain current wireless pricing for MTS customers (which is well below rates in other parts of the country) for at least 12 months and to sell 25% of MTS postpaid subscribers to Telus Corp. (TSX: T, NYSE: TU) for $300 million.

Overall, we believe BCE has made another sensible deal, which will boost free cash flow and help sustain and grow its dividend. Shares of BCE currently yield 4.9% on a forward basis, and we estimate the stock’s fair value at C$71, or US$55.

Healthy Burger Profits

A&W Revenue Royalties Income Fund (TSX: AW-U, OTC: AWRRF), a recent addition to the Dividend Champions Portfolios, reported decent fourth-quarter results.

Royalty income (which is equivalent to revenue) increased by 1.0% year over year, as both same-store sales and the number of stores contributing to the royalty pool increased. The slower growth in the quarter can be ascribed to fewer trading days compared to the year-ago period.

The monthly distribution per unit is 7.3% higher than a year ago. The board’s objective is to dispense all distributable cash flow. Accordingly, the payout ratio for the quarter was 99%.

Although growth slowed somewhat compared to the strong momentum during the first nine months of the year, the business is still increasing its share of a very competitive fast food market. The “better burger” initiative, which focuses on providing healthier and higher-quality ingredients, is resonating well with customers.

Management says the pipeline of potential new stores and franchisees is strong, which bodes well for new store additions to the revenue pool in 2017.

The unit price has increased by more than 20% since we added the stock to the Dividend Champions Portfolio in October. Admittedly, we are somewhat uncomfortable with the stock’s rapid appreciation when the underlying company is essentially a slow-growth business in a mature market.

A&W’s units currently yield 3.9%, with the prospect of further dividend growth of 2% to 3% annually. We estimate A&W’s fair value at C$36, or US$27, but would not chase the units given the run-up in the share price.

Profitable Trading

TMX Group Ltd. (TSX: X, OTC: TMXXF) reported excellent fourth-quarter results, with adjusted earnings per share jumping 36% year over year. The quarterly dividend was maintained at C$0.45, which is 13% higher than a year ago.

The business delivered a solid performance, with higher revenue from capital formation, equities and fixed-income trading, and derivatives trading. Overall revenue increased by 7% compared to last year, while tight cost control helped grow operating income by 40%.

The balance sheet remains strong, with a debt-to-capital ratio of 18%, and cash flow is ample.

The company’s discount to its global peers has narrowed considerably over the past few months. But it will take further revenue and profit growth to bring the stock’s valuation in line with its competitors.

The forward dividend yield of 2.5% is attractive. And a payout ratio of 34% of cash flow should provide sufficient room to sustain and grow the dividend.

The share price has risen substantially over the past few months, but further gains may be limited for some time. We estimate TMX Group’s fair value at C$76, or US$59.

Earnings Season Checklist

We’re now firmly in the midst of earnings season for the calendar fourth quarter. While we do not have any particular insights into what the quarter will offer, we’re reasonably comfortable that our Dividend Champions will either maintain or increase their dividends.

The table below lists the date for each company’s earnings release, as well as the expected dividend. Please note that some dates have yet to be confirmed and are, therefore, based on the timing of past reports. Rows that have been highlighted green indicate companies that have already reported results.