BCE Inc. (BCE.TO)

Sold his holdings recently in the $59-$60 level because these names start to become a bit toppy and hitting the highs that they had hit before. He likes the name. Great dividend, great cash flow and good media content. Would like to buy it a little cheaper.

The issue with the telco industry at this stage is that you have a new entrant on the wireless side coming in. You are also facing a lot of pressure on the cable side with the people going over the top, etc. The industry is facing some serious headwinds. He has been reducing his exposure to the sector. However, if you have to be in this sector and you want very low risk, this is probably the name to have. They have a decent strategy and are deriving very visible and stable growth. The dividend will continue to grow at a slow pace, but you have good visibility on it.

Acquiring Manitoba Telecom (MBT-T), and will essentially give BCE 500,000 new subscribers if the deal goes through. The “average revenue per user” is considerably lower than the one for BCE. Once those clients come online, with the wider variety of products and services BCE has, the revenue per user can go up as well. 4.5% dividend yield.

Telus (T-T) Bell (BCE-T) or Rogers (RCI.B-T)? He owns BCE which he likes. They just did a big deal where they acquired Manitoba Tel. The issue is whether the deal goes through as they still need regulatory approval.

They are executing the best in terms of customer metrics that are tracked. The average revenue per phone bill has been the best. T-T has fears about Western Canada. RCI.B-T has had sports and media being a bit of a drag. BCE-T are executing the best.

Looks like the best one in the sector. He doesn’t own any thing in the sector right now. The dividend is quite safe. The question is, where are you going to get the growth from. It doesn’t look like it is going to come from the mobility side, which is too competitive.

It would be very hard to believe there could be a dividend cut. There is merit for Canadian players in this space to trade at a premium to their US counterparts.

There are a lot of good qualities about on safety, dividend growth, etc. Its valuation is okay. His concern with telecoms right now is that they are at historic high levels. We are coming off a lot of volatility in the early part of the year, and a lot of flows went from materials, energy and cyclicals to telecoms and utilities. Trading at pretty close to its 52 week high.

He recently took profits and moved to RCI.B-T. He got out because it was getting back to the old highs of last October. It has a great dividend. He likes it longer term.

He models that they can grow earnings by 6% over the next couple of years. Right now, like the other big 3, it is pricey relative to its 5 year. Also, the payout ratio is creeping up. In order to increase the dividend, they are going to need to execute very well, and not get impacted by the skinnier bundle. He would look to get into this $5 cheaper.

BCE-T vs. RCI.B-T. He has owned BCE-T for a long time. They grow the dividend, but Rogers is not going to do so in favour of paying down debt.

This is okay, but prefers Rogers (RCI.B-T) and Telus (T-T). This is a good core holding. It will probably keep raising its dividend over time. Telecommunications are not going to go away just yet. The only concern he would have would be on the media side of the business. If you look at what has happened to the media companies in the US, they have all come down in valuation.

He likes stocks that kind of stepladder up. This is showing good defensive language, at worst moving sideways. Dividend yield of 4.65%.

You want names with a low beta, which is .4 in this case. He likes the fiber expansion. It will boost earnings. He likes the HBO acquisition. They will stream current seasons over mobile devices.

They recently reported earnings and they were positive. They raised the dividend. Rogers did not raise their dividend. BCE-T is ranked in the top 15% of their database. There is a good opportunity to grow the dividend.