BCE Inc. (BCE.TO)

It is pretty hard to find quality blue chip companies with yields over 5%. As people are exiting the commodities and economically sensitive stocks, they are gravitating towards the blue chip income producers, not economically sensitive. Dividend yield of 5.18%.

This is an interest sensitive stock. Has a yield of over 5%. His model price is $36.97, a negative 23% above what he considers Fair Value.

Thinks buying Bell Alliant (BA-T) shows a somewhat desperate reach for growth because there is not a lot of ongoing growth in the business now. This acquisition will add a couple of percents. Buy it for the yield, but don’t buy it for anything else. Thinks it is fully valued and wouldn’t surprise him if it is flat for the year. Doesn’t like the outlook for this business in Canada.

He is not in telecom right now. Likes the dividend yield on this. There will be volatility with events like a 4^th competitor. You are never going to go wrong holding this for the long-term. Prefers Quebecor.

Preferred Series ‘C’ rate reset shares. BCE used to be investment grade and no longer is. The company has been good to investors, but he does not think they will ever get back to par.

(A Top Pick Sept 18/13. Up 16.25%.) Still likes this. The telco sector has not been loved. It has broken its trend line, but corrections have to happen some way.

Doesn’t own any telecommunications at this time. Because of 1) regulatory uncertainties that are coming down the pike, 2) increasing intense competition and 3) some are reaching the saturation point. He would stay away at this time.

(Top Pick Jun 26/13, 23.39%) The stock plunged with threat of Verizon coming in but it didn’t happen. Still likes it and likes the opportunity of smart phone penetration beyond 70%. Still sees them as a utility. One of his core holdings, but he only buys it on negative headlines.

Traded yesterday at $48.57 and his model price is $36.97, a 24% negative differential. He feels investors are looking more at the 5% yield. This price and $50 is the maximum you are going to get.

(A Top Pick Aug 12/13. Up 22.23%.) Expect there will be another dividend increase. The main reason he holds it is because of the stability and the dividend.

BA-T is an okay deal for BCE. He does not know what they are getting. It is not very exciting for him in terms of BCE. He is not sure where the organic growth is coming from. Not sure what you get from the company going forward.

Is $31 a fair price to compensate the dividend difference between this and Bell Aliant (BA-T)? He thinks the Bell Alliant people should be happy. There wasn’t much growth there. The difficulty for them was staying current. He thinks the move by Bell was the right thing.

(Market Call Minute.) A Hold at best. Management has done a fantastic job, but the yield is not going to get any better and earnings growth is slowing down a little. Doesn’t think there is much valuation upside.

Well up there, but the stock has a terrific yield in a yield starved world. Trading at over 2.5X its Book Value and 3.5X is all that he would ever expect from it. His Fair Market Value would give him about another 20% upside. A good stock to hold.

Just announced a privatization deal with Bell Alliant (BA-T). Thinks this is good that they are taking some of their assets and consolidating them. He owns this mainly for its dividend play. Wireless is the way to go, and the growth engine for things. If you are a Bell Alliant shareholder, he would recommend taking the cash unless there are some capital gains complications.