BCE Inc. (BCE.TO)

The problem with this company is that it is running hard up against its FMV. Every time it has got there, it has quit and set back. Right now, that target is $65, so at the current price you got about 11% to go. After that, it is going to set back.

A good dividend growth story. Well-managed from the perspective that it generates cash to the owners. They are very good to their shareholders. He would attribute the last $5 decline more to the fear of rising interest rates than anything specifically material to the company. Close to a 5% dividend yield is pretty darned good.

He is holding this for the income, which could be under pressure. Doesn’t think you are going to see dramatic increases in the underlying price, but the fundamentals are there. You potentially have a new wireless refresh cycle going on.

The business is under assault, but this company has managed extremely well. They are notorious for controlling costs. They’ve done a good job of acquiring companies where they are generating content to offset the business. The broadcast part of the business may go down, but the content part will be there and there will be distribution. People will want to see it. Thinks you are safe with this, but just doesn’t see a lot of opportunities for capital gains. Dividend yield of 4.9%.

Out of all the Canadian telecoms, he primarily looks at this one. They’ve always had the advantage of having the grandfather position in Canada. Lately, they’ve been changing their model a bit and going more to wireless, with less dependence on their wire line offerings. Also, the provision of Internet services is becoming a bigger and bigger thing. We are seeing a huge movement in the industry to Internet protocol, whether TV, telephone or whatever. This company is going to be one of the primary beneficiaries of that. Feels we may be reaching a plateau with all the telecoms, and he wouldn’t be surprised to see them all pause. Dividend yield of 4.9%.

Out of all the telcos, he likes this one. Their free cash flow yield is around 6%. Has a ton of free cash flow to either buy back or increase dividends. Fibre to the home is almost 2/3 done. The iPhone release is going to be positive for them. They have the lowest wireless attribution to their overall revenue numbers, so they have the most upside. Their biggest problem is that the wire line is decaying. Dividend yield of 4.9%.

The dividend (4.9%) is the main reason to own it. It is fairly valued right now. The growth is not great. They are not as strong in wireless. Their fiber to the home is behind TELUS. You cannot go wrong with any of the top three.

The roll out of FIBE is going to be a huge focus in 2018 for this company. They are taking market share from other players. Good dividend.

BCE-T vs. T-T. You are getting bond like returns and in the future they are going to spend a lot on 5G, but won’t get much payback for it. He is weary to buy a stock with a bond like yield. It is a group he does not invest in.

Boring, but boring is good. When building a portfolio, this is a name that is difficult to ignore. The steady Eddie of a portfolio giving you a 4.5%-4.7% dividend yield. If you get a 4%-5% share price appreciation, it has done its job. In the last couple of years, it has done better than that, but recently all the telcos have pulled back.

He considers this as a core stock, 3%-4% and you might get up to 5%. Throws off a very predictable dividend. This is definitely a Buy under $57, and even under $58 you could pick away at it. You are buying this for the dividend. Dividend yield of 5%.

He owns this for the dividend and that the dividend has seen growth and will continue to see growth. An interest sensitive name, so there has been a little bit of weakness lately. This is bread-and-butter in any core investment portfolio in Canada. Its wireless business continues to show growth. The wire line is slowing down, but it is a cash generator.

Switch out of Bell Canada (BCE-T) to Pembina Pipeline (PPL-T)? An interesting comparison. He wouldn’t make the switch. They are very different risk profiles. This is a very stable business and you can rely on the dividend and not have to worry about it. Yield of about 4.8%.

The real seasonal period for telecoms is in September. The chart shows it is still in an uptrend, and paying a dividend of almost 5%. If we don’t break the trend, this is still a good stock to be in.

(A Top Pick July 8/16. Down 0.23%.) If this gets down into the $57, it is definitely a Buy. This is for the dividends.