Topic: How To Invest

BCE INC. $57.77 – Toronto symbol BCE

BCE INC. $57.77 (Toronto symbol BCE; Shares outstanding: 865.4 million; Market cap: $50.7 billion; TSINetwork Rating: Above Average; Dividend yield: 4.7%; www.bce.ca) continues to benefit from strong demand for its wireless, high-speed Internet and Fibe TV services. That’s offsetting weaker revenue from traditional telephone services.

In the three months ended December 31, 2015, the company’s revenue rose 1.4%, to $5.60 billion from $5.53 billion. Per-share profits were unchanged at $0.72.

During the quarter, the company added 91,308 wireless subscribers under long-term contracts. That’s down from 118,120 a year earlier, mainly due to strong competition over the winter holiday. However, smartphone users now account for 78% of these customers, up from 76% a year earlier. That’s good news, as smartphones generate higher monthly fees than regular cellphones.

Meanwhile, the company continues to see strong demand for its TV offerings: it now has 1.2 million subscribers to its Fibe TV service, up 26.7% from a year ago.

BCE expects its earnings to rise from $3.36 a share in 2015 to between $3.45 and $3.55 in 2016. The stock trades at a reasonable 16.5 times the midpoint of that range.

The company also raised its quarterly dividend by 5.0%, to $0.6825 a share from $0.65. The new yearly rate of $2.73 yields 4.7%.

BCE is a buy.

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