BCE Inc. (BCE.TO)

He would personally not buy this. His clients have some, but it is a very small part. The competition is heating up with the various channels and media that is coming on. The demand is exploding, but it is also diversifying.

Not cheap at around 17X, which is ahead of its 5-year average. 57% of revenues come from wire line which is not good, because of increasing competition from cable. Their wireless numbers are probably going to be pretty good at about 30% of their revenues. He sees growth of about 4% this year over last year. They will be boosting their dividend every year by about 5%. A name that you just Hold, and sell some Calls on it.

A great income name and has been a great dividend stock. 4.7% dividend yield, and expects that will get increases of about 5% over the next few years. That is likely to equal what the earnings growth is going to be. They’ve had some good penetration on the wireless business. Has a great deal with Telus (T-T) which allows them to lower the costs of their infrastructure. Trading at a high valuation of over 18X earnings.

The media sector has been doing well recently, and telcos have had a bit of a bounce over the last couple of months. These are less economically sensitive companies that people have gone to hide in while pulling back on more economically sensitive companies. From a sector perspective, there are better places to be. He would prefer to be in media such as Comcast (CMCSA-Q) or CBS (CBS-N). Dividend yield of 4.7%.

Extremely well-managed and clearly the dominant player in Canada. They’ve done a great job of diversifying into media type businesses. Continuing to increase their dividend. His concern would be that cellular telephone growth is probably largely behind us. Most people are disconnecting their main line. The TV business is under pressure as advertising goes away. He doesn’t think they are in danger, but the future is a little tough. Not a stock that he would own.

His preferred name in the telecom sector right now. Pays a good dividend. Doesn’t know that you will see huge upside potential on this. If you can get a few percentage on capital growth and the dividends, you are still getting into the high single digits.

Has owned this several times and it has been his biggest position, but last year started to take some off the table at around $64. Chart shows it is now having a new break out, which is positive. There is going to be some capping when it hits resistance at around $64. You could put a toe in the water, and there may be an opportunity to add to it later.

This company’s preferreds are really broken down into 2 types of resets. 3 have a fixed reset and the rest do not. BCE has generally been pretty fair resetting their coupons, but all of the group are trading between $.50 and $.70 on the dollar, all at a discount. The problem is, there are so many of them that the whole group needs to move. Their running yields are around 4.5%, and have been resetting in and around 4.5%. With this, you are really making an interest rate call and using BCE as your credit.

She loves current management. They are thinking of taking the TSN channel and increasing prices to restaurants and bars to find another revenue source out of it. They have new and inventive ways of monetizing their assets. It is her favourite of the three telecoms.

Tremendous free cash flow yield. It is in the best position of all the telcos and cable companies. Fiber to the home has a compelling element. They are tremendous cost cutters. (Analysts’ Target: $60.00).

He is buying at these levels for new clients. A rock solid, extremely well-managed company. The stock is up on days the market is down. It has that negative correlation, acting somewhat bond-like. They have growing businesses, the whole wireless side. This is one you want to own for a long time.

This has come down because there of concerns about slowing demand for services and potentially rising interest rates. You are getting almost a 5% dividend yield, and it is going to grow. It has great cash flow generating ability. He likes their Manitoba telecom acquisition as it gives them more synergy potential. (Analysts’ price target is $60.)

The challenge is, how do they increase the subscriber base when the business model is changing so rapidly. The Internet is changing things hugely. Last year, more people cut the cable and their subscriptions to paid TV, than ever before. They are all going to easy internet protocol type things. At the end of the day, what becomes of our major telecom companies? Are they becoming Internet providers, and offering services like Netflix? The wireless is the one thing they’ve been able to hold on to, and this is where BCE really has the advantage. They’ve managed to keep the dividends growing as they’ve been able to keep earnings growing.

He is constructive on this. Gives good income from the dividend. There will be some negative overhang with regards to the debt, continually borrowing money. A lot of negative overhang with the media side, a smaller component. They have a big wireless division which is growing. The landline division seems to have stopped its bleeding which is positive. He is looking at this cautiously, based on the fact that they are paying out a good deal of their income towards the dividend, as well as borrowing money.

He would value this on a free cash flow basis, looking 1-2 years out. It has come off a little and free cash flow yield has gotten a little better. Management has done a great job. However, top line growth is only at about 1%. They have to spend a lot of money to continue to work on the network to stay competitive. Dividend yield of about 5%.