BCE Inc. (BCE.TO)

When he chose this last year, he was looking for a bounce. Which did happen, but then everything came unglued. Regulators, competition, and payout ratio is too high. In a downward channel on book value. Earnings are also in a downward channel. FMV has lots of upside potential, but that's the only bright spot. Be cautious here.

He owns no telcos. Lots of competition, regulation uncertainty, lots of debt. Should cut dividend. Likes companies with high free cashflow to grow the business.

Hurt by pricing, competition, and CRTC rulings. Tailwinds from immigration have changed. Intensive capex with higher interest rates. Needs to sell assets and towers (and lease them back). Dividend is too high. Compelling down here. 

In registered accounts, he's held on. In non-registered, he sold in November for the loss, and then got back in after the 30 days passed. You'll be fine longer term.

The Firefly acquisition made her sell the whole position; US market is very competitive, plus this will require capex. Balance sheet very levered. Yield is over 12%; market anticipates a dividend cut, and wants them to so they can move on. Dividend under ongoing review by the board. Any cut might see further drop in the stock, and you can reassess the company and its valuation at that time. 

Better income stocks to own out there. When you buy for income, you want good coverage, visibility, and increases. This name doesn't provide any of that.

A dividend cut is now being considered since the payout ratio is elevated. They could then use the money saved for paying down debt. He feels that the risk-reward is not attractive enough.

Tough question. At this point, less downside than upside. Down ~50% from highs; if you didn't get out earlier, tough it out. Consider adding a bit more. He'd say 50/50 chance dividend gets adjusted. US acquisition will require hefty capex, and that's what spooked the market.

What's changed is that in the last conference call, management suggested the dividend is under review, with the payout ratio "elevated". Institutional investors are encouraging BCE to cut it and use the savings to pay debt or fund growth. A cut could trigger a relief rally. The risk/reward isn't attractive.

Not in the telco space right now. Sold off assets. Dividend is under scrutiny.

He's not a betting man, but if he were he'd say yes.

We all know the bad story, but what's the good story? Great assets. Can immunize the balance sheet by raising equity. Could sell assets and perhaps rent some instead, stop the DRIP, cut the dividend. If dividend cut in half, stock may drop another 10%, but thinks many would step in to buy. Yield is 11.25%.

Phone business in NA is gradually deteriorating and being replaced by technology. Spent a lot of $$ building fibre to the home. Stock's falling because current yield of 12% not covered by current cashflow after that massive spend. He holds a little tiny bit for the yield.

See his Top Picks.

Is on a downtrend after failing support at $52 then $44. It just had a monster move to the downtrend recently, but there's a pretty good chance this is oversold and could bounce.

They need to change the CEO. Investors are totally perplexed by BCE's purchase of a US company--the strategy makes no sense. Expects someone to step in and radically change things. BCE does have a good balance sheet and assets and are raising the dividend (too far). The US expansion will be costly to compete down there. They should cut or remove the dividend. Everyone is telling BCE: do something. There's a mismatch in what they pay investors and their internal capital requirements.

It makes sense. You can lock in losses, but he can't advise without knowing the caller's tax situation. He expects BCE to cut their dividend, which could be when the stock bottoms. A cut looks inevitable. BCE has made mistakes in recent years.

Would hold for at least 5 years. Fiber assets and recent transition of business will take time to pan out. Strong dividend yield a signal of short term weakness. Investors must be willing to hold for a long term (at least 5 years). 

All the telcos are in a competitive price environment, but this should moderate in 2025. Lower interest rates should benefit. Slower immigration is a slight negative, but Canada's numbers are still more positive than other G7 countries.

Market assumed sale proceeds from MLSE (asset wasn't cashflow positive, but sold for a good price) would be used to pay down debt. Ziply acquisition (accretive to cashflow, higher growth opportunities) really threw investors off. Stock trended down, investor sentiment negative. What they did was positive, but balance sheet is worrisome. Lots of tax-loss selling. Past peak of capex on fibre to the home, which should increase cashflow going forward.

Yield is now 12% or so, with a greater chance of being cut. Doesn't need to cut, but there might be pressure from institutional investors. Even if cut, will still be higher than other telcos. If you own, hold on.