BCE Inc. (BCE.TO)

Bell, Telus (T-T) and Rogers (RCI.B-T) has 90% of the market share. Great margins for all of them. We are moving more towards a higher margin business of wireless, and away from a phone that you pick up and dial at home. He likes the space. It is a steady type of area, and you are getting a nice dividend. Dividend yield of 4.85%.

(A Top Pick March 28/17. Up 8%.) Has underperformed relative to the sector, but still likes it.

He is more bullish on this because the valuation relative to the sector is cheap. Over the next 2 to-3 years, this company is really going to outperform, and it’s all about the fibre to the home. They are going to hook up about 9 million homes, and are about a 3^rd to a half through. This has a tremendous amount of free cash flow yielding about 6%. Dividend yield of 4.6%. (Analysts’ price target is $62.)

Seasonally this usually does very well in the summer. Technically it is in a trading range, and there is no indication it is about to move above or below that trading range. If it moved above $63.50, that would be very bullish. Below $57 would be quite bearish.

Owns because of its steady growth in income. It steadily grows its dividend every year. It’s not exciting and you’re not going to get rich, but you are not going to get killed either. Like other utilities, it is very interest rate sensitive. If interest rates are going down, these types of stocks tend to do really well. It is a bond alternative. Should be a part of everybody’s portfolio. Dividend yield of 4.7%.

In Canada, more than half your total return comes from dividends. The government has been kind enough to give us a tax break on dividends. In this high tax era, we should take advantage. The company is growing their wireless business and we are all using more data all the time. We are going to be using a lot more data when we all have autonomous cars. Dividend yield of 4.7%. (Analysts’ price target is $62.)

She’s used both this and Telus (T-T) as income stocks. Both have an attractive yield, close to 4.5%-5%. They generate a lot of cash flow, so will typically increase their dividend at a modest pace each year. They’ve done relatively well. She doesn’t expect a lot of capital appreciation, maybe 5% from here at best, plus the yield. Uses these for defensive and income purposes.

Just reported yesterday, and beat on subscriber additions, on both wireless and wireline. This is a wireline company and they beat on that, partly due to Manitoba Telecom synergies. Thinks that is something that can continue, and is just in the early innings. He is only modelling a 2.5% EPS growth over the next couple of years, but not a bad valuation compared to its peers. Strong dividend and good dividend growth. You can buy more of this on a little bit of a pullback.

They had the best subscriber growth last quarter for 5 years. It is finally up a bit. It has been in danger of there not being much growth. They showed maybe that is wrong and we might see a little bit higher earnings.

Sell and move into AT&T (T-N)? Doesn't think this is fully priced. AT&T is a similar company, but trading at a much lower multiple. It has a nice dividend yield. Doesn't see a lot of top line growth coming into these companies. You continue to get a nice dividend, and maybe 2%-4% top line growth. Like BCE, they can probably continue to cut costs, grow their business, and give you a decent rate of return. Expects they will give you 8%-12% rates of return. AT&T's Dividend yield is 5.8%.

(A Top Pick June 12/17. Up 1%.) Typically, every summer, he goes low beta, so he looks for things that maybe don't have tons of upside, but maybe pays a dividend and gives a little bit of return. It might get to $62-$63, and then he would Sell. He tends to trade this through the summer just as a place to own something during the period that he thinks might be more volatile. 5% dividend yield.

Up for the year, but moving in a consolidation pattern, and goes back into 2016. Seasonally, this tends to do well from December into January. He would be positive on this over the next few months.

(A Top Pick Dec 2/16. Up 9%.) He still likes this. Pays an excellent dividend and has a good record of increasing it. Management has shown itself of being quite capable of getting into other areas such as sports, etc.

Still the dominant player in the market, although Telus (T-T) has done very well in the last few years. The big margins seem to be in wireless. He’s a little concerned about the telecom industry as a whole, except for wireless. BCE is still spending a lot of money and facing a lot of competition on the Internet side. On a valuation basis he’d be looking more at Telus.

The 4.9% dividend is important.