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Dividend Investors: Should You Buy BCE Inc. Today?

BCE Inc. (TSX:BCE)(NYSE:BCE) just reported Q3 2016 results.

Let’s take a look at Canada’s largest communications company to see if it deserves to be in your dividend portfolio.

Earnings

BCE delivered steady numbers in the third quarter. Operating revenue rose 1.2% compared with the same period last year. Cash flow from operating activities rose 3.5% and net earnings increased 1.1%.

The company continues to see growth in its wireless, internet, and TV segments and added 135,000 net new subscribers in Q3 compared with the third quarter of 2015.

Wireless operating revenue rose 4.3% as grow in the postpaid customer base drove higher data usage from smartphone users. Service revenue actually jumped 5.7%, but this was partially offset by an 11.2% drop in product revenue resulting from stiff competition and aggressive promotional offers.

Blended average revenue per user (ARPU) hit $67.76 in the quarter, representing a 3.7% gain over Q3 last year.

BCE’s media group, which includes the sports franchises, television network, specialty channels, and radio stations, delivered 3.5% year-over-year Q3 revenue growth.

Strong contributions came from the company’s expansion of The Movie Network into a national pay TV service. BCE’s streaming service, CraveTV, also had a strong quarter, topping one million subscribers.

Wireline operating revenue slipped 0.8% as customers continue to drop their landlines. Business market revenue also declined amid strong competitive pressure and weaker economic conditions.

Internet and IPTV subscriber and revenue growth helped mitigate the negative results coming from the legacy wireline segments.

Overall, BCE had a solid third quarter.

Growth

BCE continues to expand its dominance in the Canadian market. The purchase of Manitoba Telecom Services is moving along well, and, when completed, will provide BCE with a strong base to push further west.

BCE also recently bought out its equity partners in Q9 Networks, a data centre operator that provides outsourced hosting services to business and government clients.

Dividends

BCE pays a quarterly dividend of $0.6825 per share. That’s good for a yield of 4.6% at the current price.

The stock has a strong track record of divided growth, and investors should see that continue in step with rising free cash flow.

The company generated free cash flow of $951 million in Q3 compared to $921 million in the same period last year. For the first nine months of 2016, free cash flow was $2.3 billion–up from $2.08 billion in the first three quarters of 2015.

Should you buy?

BCE remains a very profitable business, providing one of the safest dividends in the Canadian market. The stock isn’t cheap, but if you are looking for a quality name with above-average and reliable yield, BCE is still an attractive pick for buy-and-hold investors.

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

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