Canada’s telecoms all pose unique opportunities for investment, and BCE Inc. (TSX:BCE)(NYSE:BCE) remains the incumbent option for investors to consider. Few people actually realize how much BCE has surrounded us in our daily lives. BCE’s well-known core subscription services are augmented by a series of media holdings that include TV and radio stations as well as professional sports teams.
In other words, chances are that at some point throughout your day you will use, watch, listen or receive data from any number of BCE’s holdings. While that factor alone might be enough for some to look at BCE, there are some compelling reasons to consider Canada’s largest telecom. Here are some of the factors that make BCE a great investment option for 2018 and beyond.
Acquisition of AlarmForce Industries is one piece of a large puzzle
The first notable development is the acquisition of AlarmForce Industries that was announced last month and approved by shareholders just this week. The $166 million acquisition of Canada’s second-largest home security company may not have raised eyebrows initially, but the acquisition lies at the core of a much bigger play into the Internet of Things, or IoT world.
IoT is the concept of taking everyday devices and connecting them to each other and the Internet to provide information, diagnostics, or perform mundane tasks. This could be as trivial as triggering your coffee machine to start brewing a pot in the morning when you finally stop tapping snooze or a button that re-orders your favourite products with ease.
That IoT vision, which pundits believe is a trillion-dollar industry that connects tens of billions of devices together is a massive opportunity for a number of companies, including BCE, which already offers connectivity to millions of people through both wireless and Internet subscription options.
Additionally, a product such as AlarmForce could very easily be bundled into BCE’s existing core subscription services, and could, in theory, reduce churn to BCE’s competitors.
It’s all about wireless – and data.
One thing that has become incredibly apparent over the past few years is how addicted we are to our smartphones. Here’s the proof: the next time you are on a bus or subway, glance around the car and see how many people are reading or playing something on their smartphone screens.
Smartphones have eliminated the need for dozens of other things we used to own, ranging from alarm clocks and dictionaries to cameras and MP3 players. And more of us own smartphones now than at any point in the past. Nearly 80% of Canadians own one, and data usage among those of us on smartphones is nearly doubling every year.
For a telecom like BCE, increased smartphone adoption and greater data usage are becoming an annual windfall for the company. In the most recent quarter, BCE announced a massive 8.8% increase in subscribers over the same quarter last year, which consisted of 117,000 new post-paid subscribers to the wireless segment of the company, which was the best third-quarter growth in that segment in well over a decade.
Is BCE a good investment?
In my opinion, BCE is a great investment opportunity for those investors looking to diversify with a telecom that offers both growth and income prospects.
Additionally, BCE still has one of the best dividends around, offering an impressive 4.77% yield, and BCE’s entry into the home monitoring sector should provide ample growth opportunity, making the stock a great buy-and-forget investment.
