BCE Inc. (BCE.TO)

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%.

This is a yield play completely. If looking for share price appreciation, there are better places for that. A great anchor within a portfolio. One of the lowest beta stocks on the TSX. Dividend yield of about 5%.

Not a fan of this. Prefers Telus (T-T) because they are turning around with the Western economy starting to grow again. BCE’s revenues were up 1% in the last year. Assets aren’t growing. While they have good margins, the dividend is only growing roughly at a 4%-5% rate. When you take into account tax and inflation, you are pretty much getting to zero.

Sold his holdings last summer. The top in the last year or so was right when interest rates started to move higher in the US. This company is quite sensitive to interest rates. As interest rates moved higher, the stock has moved down. In the last several months, the stock has held its own and moved sideways. If looking for the 5% yield without tremendous capital growth, then it is a stock you might want to own.

This has a very low beta, which means that no matter what happens in the stock market, this doesn’t get affected much. Also, it gives you a pretty good yield of about 5%. Over the years, the chart shows it has been steadily climbing. In the last several months it is looking a little tired, not negative, but he would wait a month or 2 to see if you can buy it in the low $50s, which would give you much better protection.

Considers this as a core stock in his portfolio. Good yield of about 5%. Pretty regular dividend increases. The largest telecommunications business in Canada. A very safe stock. They have some growth potential with their takeover of Manitoba Tel.

(Market Call Minute.) His favourite telco is Rogers (RCI.B-T), but he would buy any of these today.

This is a good business, but he has a lot of other areas to put capital to work. A very slow growth business. Pays a nice dividend. Trades at around 8.5X EBITDA, which is not exactly cheap. If it ever got down to around the $50 range, it might be an attractive entry point.

He’s been in the process of reviewing his holdings. It is going to grow reasonably well, but his biggest concern is in terms of subscriber growth. It is not doing quite as good as in the past. Has a reasonable dividend and is well managed. He is likely going to be selling this in the very near future. Getting close to being fully valued. His target price is $60.

Just increased their dividend 5%. All the Canadian telcos have seen better wireless subscriber additions recently. The adoption of secondary devices, immigration and demographics is combined to increase the growth rate of these companies. If interest rates increase, there will be a broad macro trade to sell the telecoms and utilities especially, and that’s when he would start looking at this.