BCE Inc.: A Top Dividend Stock You Shouldn’t Ignore in This Downturn

BCE Inc. (TSX:BCE)(NYSE:BCE) is a top dividend stock which you shouldn’t ignore in this market selloff. Here is why.

| More on:
The Motley Fool

As the selloff in global stock markets intensifies, it’s hard to focus on particular stocks and the reasons we like them. BCE Inc. (TSX:BCE)(NYSE:BCE) is one such company that deserves your attention if you invest in dividend stocks and hold them for a long time.

While announcing its fourth-quarter earnings, Canada’s largest telecom operator reported its best quarterly wireless performance in many years.

Bell said it added 175,204 wireless subscribers in the three months ending December 31, up 56% from the same period last year for its best quarterly performance in 15 years.

The strong gains in its wireless division helped the company beat analysts forecast for its net income, excluding one-time items. BCE earned $0.76 per share, beating the average analyst estimate of $0.75, according to Thomson Reuters. Its operating revenue rose 4.5% to $5.96 billion.

Today’s report on wireless subscribers’ growth solidifies BCE’s position in the crucial battlefield where other top operators are also trying to grab the largest market share. BCE credited these gains to its aggressive holiday promotions that offered 10 gigabytes of data for $60 per month.

Network quality

In a conference call with analysts, Bell CEO George Cope said Bell’s network quality was the main reason for the strong wireless additions.

Bell also beat analysts’ expectations when it came to wireline subscribers. It added 27,000 Internet customers and 7,000 television customers, up from 18,000 and a loss of 1,000 the previous year. It lost 74,000 telephone subscribers, down from a loss of 100,000 in 2016.

Cope said that BCE’s landline losses were declining, as the company invests heavily to provide fast fiber connections to customers. Bell is accelerating its fiber roll-out, planning to add 800,000 homes and businesses this year for a total of 4.5 million premises.

Should you buy BCE stock now?

Improving cash flows and a better outlook for 2018 are both great news for BCE investors, who got a boost in their dividend income. BCE said it will hike its annual payout by 5.2% to $3.02 a share this year. This dividend hike is BCE’s 14th increase since 2008, representing a 107% jump.

But despite this impressive performance, investors are ignoring BCE stock, which has seen a major pullback this year. It is down 7% this year, as it seems to be caught up in the indiscriminate selling that we’re seeing in the markets these days.

But as I suggested in my earlier articles, long-term investors have an opportunity to take advantage of the company’s very attractive dividend yield. Trading at $56.23 a share, BCE stock is currently yielding 5.06%, the company’s best return since 2013.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Haris Anwar has no position in any of the stocks mentioned.

More on Dividend Stocks

Payday ringed on a calendar
Dividend Stocks

Boost Your Monthly Dividend Income With This TSX Gem

A high-yield TSX gem in the real estate sector can boost your monthly dividend income.

Read more »

oil and gas pipeline
Dividend Stocks

Is Enbridge Stock a Buy for its 7.6% Dividend Yield?

Enbridge stock is a TSX giant that offers investors a tasty dividend yield of 7.6%. Is this high-dividend stock a…

Read more »

Early retirement handwritten in a note
Dividend Stocks

Retire Early With These 3 Canadian Passive-Income Stocks

Three Canadian passive-income stocks are smart choices for people with early retirement goals.

Read more »

Dividend Stocks

3 Dividend Deals You Won’t Want to Miss

Given their solid underlying businesses and stable cash flows, I believe three dividends stocks would be an excellent addition to…

Read more »

A worker gives a business presentation.
Dividend Stocks

For 6% Yields, Buy These 3 TSX Stocks Now

Companies like Enbridge offer high yields and are focused on elevating their shareholders’ value by bolstering dividend distributions.

Read more »

protect, safe, trust
Dividend Stocks

How to Invest $10,000 Today for Decades of Safe Passive Income

Want to earn safe and predictable passive income? Here are some ideas on how to invest $10,000 and earn +$400…

Read more »

protect, safe, trust
Dividend Stocks

Turn $15,000 Into Your Financial Safety Net

You can turn limited capital into a financial safety net by purchasing a high-yield stock paying monthly dividends.

Read more »

TIMER SAYING TIME FOR ACTION
Dividend Stocks

Brookfield Stock: It’s Time to Buy the Dip

Brookfield (TSX:BN) stock is getting cheap. The time has come to buy the dip!

Read more »