BCE Inc. (BCE.TO)

Generally, company dynamics are looking decent. A mature industry, but they are getting a bump up in wireless subscribers. The Canadian economy is doing okay, slightly better year-over-year. On the negative side, there is a large capital expenditure build, where they are building fibre optics to the home in the greater Toronto area. He worries they are spending into a bit of a vacuum on pricing. TV pricing is what anchors the relationship, and that TV pricing is increasingly being cut. That doesn’t impact their ability to pay the dividend, maintain it, and probably to increase it.

Bell Canada (BCE-T) or Manitoba Telecom (MBT-T)? Manitoba Telecom is in the midst of being acquired by BCE and are just waiting for government approval. He wouldn’t play an arbitrage on this.

Telecoms? She likes Telus (T-T) and BCE (BCE-T) equally. They are both incredibly well-managed.

He thinks it could pull back to the Mid-$50s. You would have a flat return for a year and that is as much as it pulls back for this year. There is only 1 or 2% growth.

(Top Pick Oct. 15/15, Up 12.57%) An excellent core holding. He loves it. It has rolled over a little bit like all the other defensives. He thinks it will find support. If it gets below $57 he would get concerned.

Is a good dividend payer. All the big dividend payers have pulled back so this is not the best time to step in. Sumer months are good.

Investing in a Canadian company you get the dividend tax credit. In the US you get a 15% withholding tax. Continue to hold telecoms in Canada. BCE-T has come down, but he would continue to hold it.

If you are looking for dividend yield, BCE-T will grow them. It is an attractive place if you are looking for yield, but she does not see a lot of growth. There are probably more attractive companies outside of telecoms, however.

Has stayed out of the Canadian telcos. Thinks that some day someone will allow real price competition in Canada, and it won’t be a good day for this company and the others.

Telecom Space. BCE-T is trading at 17 times earnings, but a significant part of its revenue is regulated. It is a little expensive in his mind. It should be trading at more of a discount. If there is an interest-rate-led correction, this one will be impacted heavily.

A lot of people have gone to the telcos for income. You are going to get your dividend, which is safe, and a bit of growth. It’s a good place to go. He prefers having growth with a dividend, and this has a little bit of growth.

A very good defensive name. 4.6% dividend yield. If there is a correction in the market, this company will hold up relatively well. If there is further weakness in the market, take advantage of it.

In the big 3 telcos, which is the best? He is predisposed to BCE (BCE-T). Likes their 5-growth. Everything that he has done with them has been remarkably better than his experiences with the other 2 major telcos. It has the 2^nd highest yield in the telcos. They continue to surprise the analysts. His 2^nd choice would be Telus (T-T).

X-dividend next week. He sees no real issue. You can own this at any time. It is rare you ever need to trade it. It is very consistent, although it has a low rate of return on invested capital like a utility.

Has a lot of respect for management. They’ve cut a lot of costs and become more efficient. Lean and focused. Completely revamped their brand. He wants attractive free cash flow growth, or be compensated by a very high free cash flow yield. Not a cheap stock and doesn’t think there is an enormous amount of free cash flow growth.