Topic: Dividend Stocks

BCE INC. $47 – Toronto symbol BCE

BCE INC. $47 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 775.9 million; Market cap: $36.5 billion; Price-to-sales ratio: 1.7; Dividend yield: 5.0%; TSINetwork Rating: Above Average; www.bce.ca), like Telus (see left), 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.

Unlike Telus, however, 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 in June 2013. Montreal-based Astral owns 22 TV stations, 84 radio stations and popular specialty channels like The Movie Network and Teletoon.

BCE’s media purchases increase its exposure to cyclical advertising revenues. However, the media division supplied just 10% of its 2012 revenue, and 7% of its earnings. Owning strong media outlets, and their exclusive content, will also help BCE compete with new services like Netflix and Apple TV that use the Internet to sell movies and other programming.

We like both BCE and Telus. However, income-seeking investors may prefer BCE for its higher dividend yield (5.0%). BCE also has a lower p/e ratio: it trades at 15.6 times BCE’s likely 2013 earnings of $3.01 a share.

BCE is a buy.

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