
TSE:BCE
Preferreds versus common? Feels you should Sell the preferreds and buy the common shares. One of the anomalies in the marketplace that has existed since 2007-2008, is the gap between preferred share yields and common shares yields have been very narrow. So his natural inclination is to prefer the common shares where there is growth potential in earnings and dividends and total return potential as opposed to preferred shares which are limited to the upside and vulnerable to rising bond yields.
5.1% dividend, which is pretty rare for a company that is not particularly interest sensitive. If you are looking for, high-yield, but worried that interest-rates are going to go up, this is probably the one for you. Less vulnerable to the government than its competition because of the breadth of its offering in Internet and TV as well as wireless and home phone.
Thinks the dividend growth is going to slow down from what it has been in the past. The dilemma with telcos is that the federal government has a meany (?) on for them right now. Generally speaking, you don’t want to fight the Fed. This is making the telcos be more competitive. This company has done a number of acquisitions, but having lost the hockey night franchise is a bit of an issue. Would consider selling his own holdings if he didn’t have such a big gain in it.
10.58% bond due 2021. Still paying 7.75%. (In a RRIF.) Not a bad interest to be holding. You have to realize that it is paying you that 10% and probably trading in the 140 type range, so will amortize over time. Over the next 10 years, you will see this drop by several points every year it gets closer and closer to maturity. As a credit he is comfortable with it. This will be a good way to sort of wind down your RRIF and hang on.
Recently reduced his holdings in his “growth” portfolios. Just raised their dividend giving up 5.2% yield. The issue he has is that a 3rd of their revenue comes from wireless whereas a company like Telus (T-T) has nearly 60% of revenue from wireless. Wireless is the place to be. He is really impressed with Bell Fibe.