BCE Inc. (BCE.TO)

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.

This has held in pretty well as all good dividends paying stocks did. The big issue with big telcos in general is that half their earnings, interest, tax and appreciation comes from their wire line business. That business is dying slowly. Their offset to that has been acquisitions, boosting their dividend greater than their earnings through tax strategies, their mobile strategy and their forays into advertising and sports content. This is just above investment grade and he would not call it a safe dividend stock.

It takes time for companies to merge operations after an acquisition. Typically BCE-T does well this time of year, but not this year. It seems to be forming a bit of a base here, but wait for it to move more above that base. There is no compelling reason to get excited right now.

(A Top Pick June 12/17. Down 2.8%.) He owns this because it is a low beta stock. Also, telecoms can do okay, particularly in the latter part of the summer. There is very little danger and it pays a very good dividend.

Sell Rogers (RCI.B-T) and buy Bell (BCE-T)?A really interesting question, particularly with the 1^st salvo we’ve had from the trade negotiations were the US has said that they want to have greater access to our telecommunications industry. In that case, he’s not sure you want to own any of these. His preference would be with this one, but only because it is dominant within the wireless industry. Also feels it would be a little more secure in the longer-term.