BCE Stock is attractive to numerous as the current dividend yield is 10%. We take a look at the sensitivity of the dividend to the interest rate video game as the company has a great deal of financial obligation that strains FCF. Furthermore, the most recent United States acquisition will burden the balance sheet as it requires a couple of more years of financial investments to reach the growth planned.
Possibly the key question here is whether you wish to own BCE with a 5% dividend yield? However, then, a dividend cut is never ever priced in a priori.
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I’ve been looking at it for a week since they tanked and chose to pass. I agree with your conclusions. I also fear how new wireless technologies will compete against fiber, I’m not sure fiber has such a solid moat. I bought some Power Corp on the dip after earnings. A Power Corp analysis from Sven, I’d watch. All the best.
thanks for sharing and for the suggestion!
thank you sven, always makes me so happy seeing home brands being covered ☺️ . The only thing id say is that canada is under extreme interest rate pressure due to our mortgage structure and upcoming renewals. On top of our job mix. If we do not continue to cut rapidly, then our “economy” will be a firework show of debt haha.
it is like that for every economy, debt is high everywhere!
@Value-Investing I know but mortages on average get new rates every 5 years here. So I assume that puts us ahead of the curve in stress testing rates on our economy. Maybe I am wrong?
It’s does. I work in mortgages in Canada. A lot of low rate mortgages are coming up for renewal in 2025 and 2026. They were taken at 1.5%-2.5% and now rates are 4%-5%@@blazepowder66
@@blazepowder66 compared to the US where people have locked in low rates for 30 years, absolutely.
Hahah cim je nas Mirko znaci moze jos 50% dole kad ubaci pola rodbine u firmu
:-))))
Bell/BCE just increased prices this week. Got the notification yesterday my monthly bill will increase $5.50/month CDN starting February.
that is business
Please analyze Total Energies!
thanks for suggesting!
Sven, could you analyze BAX. They cut their dividend and they are significantly down. Thank you.
not my cup of tea:-(
Can someone remind me when was the last time we watched in this channel a great business with no declining fundamentals at less than 10PE? I remember META got to 10 but that was the only one, maybe BABA? All these businesses with single digit PE are mostly dumpsterfires with dying business models.
here you have a few: https://www.youtube.com/watch?v=oNaTfeshx1Y
Thank you. Please analyze Liberty Global.
that is a covered one on my research platform, so not for Youtube 🙁
I was wondering what was going on with this company. Thank you for covering it!
Happy to help!
Thank you Sven! What would you recommend for investors who already hold BCE stock: hold it? I mean what other choice we have, it put a dent in my RRSP portfolio ((. I guess we have to see how interest rate will play out so its a waiting game for me for another 1-2 years….
hard to predict where the stock price will go, it also depends on what are your other opportunities you have
Bought 200 shares today. BCE has more than enough FCF to cover the dividend. They said at earnings they are NOT cutting the dividend but will not be increasing it.
they are NOT – for now
I’m not saying it’s not a buy but do you know about the new competition on fiber and mobile that could create more reduction on revenues and it become ugly really quickly
Thanks for sharing
what’s your source on this? Looks to me that their FCF payout ratio for the divvy is about 130%.
They always say they won’t cut the dividend. Are you trying to convince yourself?
The gov also forced BCE to open their network of Fiber to smaller player creating more competition. Same with Mobile, 2 new players on Mobile breaking the long term oligopoly
Thanks for sharing
A while ago I did look up few companies in that field . I noticed alot of debt . Also i noticed alot of families and communities in rural canada are makkng the switch to Starlink .
Thanks for sharing
I am canadian. I bought.
🙂
Looking forward to more Canadian stock analysis
Will be, but we need some kind of shock first
Thank you Sven for your analysis. Unfortunately, it’s in my portfolio 😢
:-)))
Can we get a good Canadian stock pick?
Perhaps the whole market is a bit frothy
@Value-Investing so where to put money in a tsfa?
@@VanillaAttila banks
@jsk8rulz hard to trust them after seeing what TD did. Also I have a friend at BMO that says their software is garbage and often crashes . Maybe RBC could be ok but they seem like a dinosaur too. Crypto and block chain is taking over banking.
Any chance to discuss Albemarle and Celanese?
will come one day, can’t promise now
Hi sven, other negative factors that weren’t included in the video are qubecor gets to use rogers infrastructure at discount for the next 10 years which means bells plans are 30% higher than market rate and A lot of rural users are switching to starlink. Given the regulatory environment im not sure if there is a moat
thanks for this valuable comment!
I just bought more, in the short term this is not doing anything, but if you hold it for long term you get nice dividend, and I’m sure changes will be made by management.
thanks for sharing!