BCE INC. (Toronto symbol BCE; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. It also sells satellite TV services across the country.
The company continues to benefit from strong demand for wireless and high-speed Internet services. That’s a big reason why the stock is up 31% since 2008.
BCE has invested heavily in expanding its media operations, which include the
28-station CTV Television Network, 30 specialty channels and 33 radio stations.
BCE now hopes to complete its $3.0-billion purchase of Astral Media by June 1, 2013. Montreal-based Astral owns 22 TV stations, 84 radio stations and popular specialty channels like The Movie Network and Teletoon. To gain regulatory approval, BCE has restructured its deal for Astral.
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Canadian dividend stocks: Astral deal has competition bureau OK but awaits CRTC approval
In November 2012, the Canadian Radio-Television and Telecommunications Commission (CRTC) rejected the takeover, as the purchase would have given BCE an overwhelming share of Canada’s English-language TV market. BCE has now agreed to sell six of Astral’s specialty TV channels and two Ottawa radio stations to Corus Entertainment (Toronto symbol CJR.B) for $400.6 million.
Following these sales, BCE will control 35.7% of the English language TV market, up 2.0% from its current share. It will also have 23.0% of the French language TV market, which is still well below its main competitor’s 30.5% share.
Canada’s competition bureau has already approved the Astral purchase. However, the takeover still needs the CRTC’s consent.
Income-seeking investors like BCE for its high 5.0% dividend yield. The stock trades at 15.6 times its likely 2013 earnings of $3.01 a share.
In the latest edition of The Successful Investor, we look at the risk of BCE’s exposure to cyclical advertising revenues with its media purchases. We also look at how well positioned the company is to compete with services like Netflix and Apple TV that use the Internet to sell movies and other programming. We conclude with our clear buy-sell-hold advice on this stock.
COMMENTS PLEASE—Share your investment knowledge and opinions with fellow TSINetwork.ca members
Do you believe the addition of Astral, a major TV service, adds to the appeal of a major telecom stock like BCE, by giving it greater diversity? Or do you think stiff competition and rapid advances in technology make the whole field of Internet, wireless and TV services a risky one for the foreseeable future? Let us know what you think.
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The Successful Investor Inc. and its affiliate Successful Investor Wealth Management (referred to hereafter as TSI Network) know that you care how information about you is used and shared, and we appreciate your trust that we will do so carefully and sensibly. This notice describes our privacy policy. By visiting websites owned by or associated with TSI Network, you are accepting the practices described in this Privacy Policy.
This privacy policy is applicable to all TSI Network Visitors, Clients, Employees, Suppliers, Web sites, Management, and all other interested parties. Any links to or from our site are not covered by this policy. We encourage you to read the privacy policies of every site that you visit.
The privacy of the site/store visitor is very important to TSI Network, and is respected at all times. The information we receive from customers helps us to personalize and continually improve your online experience at TSI Network.
We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
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We are continuously in the process of improving our sites and services. If any new features or policies require a change to this current policy, we will post a clear notice of this change on pages of our site where the privacy policy appears. The principle behind this privacy policy is to collect information with your knowledge and consent.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
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Changes to this Policy
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TSI Network may revise this Policy from time to time.
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The contents of this web site and our publications are based upon sources of information believed to be reliable, but no warranty or representation, expressed or implied, is given as to their accuracy or completeness. Any opinion reflects the Successful Investor’s judgment at the date of publication and neither the Successful Investor, nor any of its affiliated companies, nor any of their officers, directors or employees, accepts any responsibility in respect of the information or recommendations contained in the publications or on this web site. Moreover, the information or recommendations are subject to change without notice.
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