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Dividend Investors: Is BCE Inc. or Inter Pipeline Ltd. a Better Pick Today?

Canadians are searching for reliable dividends stocks to help them meet their investment goals.

Let’s take a look at BCE Inc. (TSX:BCE)(NYSE:BCE) and Inter Pipeline Ltd. (TSX:IPL) to see if one is more attractive right now.


BCE has transformed in recent years from a simple telephone company to a media and communications giant.

Some old-school investors were nervous when the company embarked on the strategy shift, but the acquisition of sports teams, a television network, specialty channels, radio stations, retail stores, and an advertising business appears to be timed right.


The evolution of technology has enabled consumers to access their favourite content 24/7 across multiple platforms. By adding assets all along the value chain, BCE ensures it interacts with its client base at every possible point of contact.

When the media assets are combined with the company’s state-of-the-art wireless and wireline networks, you get a powerful business with a dominant market position that is likely to last for decades.

BCE is expanding west with its $3.9 billion acquisition of Manitoba Telecom Services. Assuming the deal goes through, BCE will have a strong base to push into western Canada where Shaw and Telus currently enjoy strong market positions.

Dividend investors have always counted on BCE to provide generous distributions, and that trend should continue. The current quarterly payout of $0.6825 per share yields 4.5%.

Inter Pipeline

Inter Pipeline owns natural gas liquids (NGL) extraction facilities, oil sands infrastructure, conventional oil pipelines, and a liquids storage business located in Europe.

The diversified revenue stream is a big reason Inter Pipeline has managed to deliver solid results through the oil rout.

Management is taking advantage of the weak market conditions to invest for future growth. The company recently announced a deal to buy midstream NGL assets from The Williams Companies for $1.35 billion.

Inter Pipeline is buying the two extraction plants and related infrastructure for 55% of the construction cost, so the return on the new assets could be significant in the coming years when market prices recover.

The stock pays a monthly dividend of $0.13 per share for a yield of 5.8%. Inter Pipeline raised the payout last November, and investors could see another increase once the new assets are integrated into the portfolio.

Is one a better bet?

Both stocks pay reliable dividends and deserve to be in any dividend portfolio.

If you want the lowest volatility, go with BCE. The company is trading at a premium, but it tends to hold up well when the broader market hits a speed bump.

Inter Pipeline offers a better yield, and the stock could see a strong move to the upside when the energy sector recovers. If you think oil has bottomed, the pipeline operator is probably a better bet today.

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Fool contributor Andrew Walker has no position in any stocks mentioned.

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