Topic: How To Invest

BCE INC. $38.22 – Toronto symbol BCE

BCE INC. $38.22 (Toronto symbol BCE; Shares outstanding: 777.1 million; Market cap: $30.3 billion; TSINetwork Rating: Above Average; Dividend yield: 5.4%; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. It also sells wireless and satellite-TV services across Canada.

In the three months ended June 30, 2011, BCE’s earnings per share rose 10.3%, to $0.86 from $0.78. Revenue rose 11.6%, to $5.0 billion from $4.4 billion a year earlier. Revenue fell 2.0% at the wireline division, which accounts for 53% of total revenue. This division, which includes BCE’s traditional land-line business, faces rising competition. As well, many customers are cancelling their land lines and switching to wireless devices.

Revenue from wireless services (26% of total revenue) rose 6.1%. The company’s recent network upgrades continue to attract new subscribers and prompt existing customers to upgrade their mobile-phone plans. BCE is also benefiting from rising use of smartphones, which generate higher monthly fees.

The stock has gained 16% in the past year, but it still trades at just 12.6 times BCE’s forecast 2011 earnings of $3.03 a share. There is also potential for further dividend increases.

BCE is still a safety-conscious buy.

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