BCE Inc. (BCE.TO)

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.

The stock is up 14.8% before dividends this year. All 3 telecoms have done excellent this year. They are cheap and generate tons of free cash flow. They sell products that people can’t live without. Valuation is a little bit stretched, but he would buy on any pullback.

(Top Pick Aug 14/15, Up 20.91%) It is a mature company and he is happy to take the gain, but does not think it will repeat. The barriers to entry are significant. You are getting paid a great yield. Their beta is quite low.

Recently sold this from his equity platform, but still holds it in his income platform. The chart is great. In the long-term, it is in an uptrend, but in a 200 day moving average it is about 10% off, which is an indicator of being a little bit overbought, and usually due for a pullback. He viewed that as a reason to raise cash. Would Buy this back again if it got near the trend line.

He likes this company. There are going to be some headwinds, but doesn’t think the pick and pay bundles are going to be that disruptive. The 4.4% dividend is the reason the stock is doing well. You are going to have to be careful, but as long as they are prudent going forward, you should see this name continue to plod along.

(Top Pick Jul 21/15, Up 20.87%) A nice little trend over the last year. There is no reason to change our mind. He might partially sell because it has grown quite a bit. We have seen a double top, so maybe there will be some rotation. He will probably keep holding but give it a bit of a haircut.

(Market Call Minute.) A Hold at best. They’ve done a good job on the turnaround, but there is not much upside.

Just hit a new all-time high. This pays a steady dividend, and in an environment where there is a lot of uncertainty, it becomes a very attractive. It is attractive both on a yield basis and on a safety basis. If you own, he would consider taking some money off the table if it goes another 3%-4% higher. If you can make one year’s yield in terms of capital gains, 4%, take it.

This company provides infrastructure that Canadians use every day. It’s a quasi-oligopoly with really good budgetable cash flows. The problem is the price you currently pay for the stock. 1.5-2 years ago you could have gotten a 5%-5.5% yield, and now you are only getting 4%-4.25%. He could see the stock down 10% if there was any sort of hawkish talk from the Fed. Take an initial position and average into it over the course of 6-12 months, get your full position built and over time the market will take care of that compounding effect.

Telcos have been performing very well. So long as we are in a lower rate environment, this should continue to perform well.