Telecoms, along with utilities, are often regarded as some of the best long-term investments on the market. The reasons for that view differ for each investor, but most agree that investing in telecoms early can boost your retirement portfolio. One such example is BCE (TSX:BCE)(NYSE:BCE).
Boost your retirement with a stable investment
Few investments on the market today can offer investors the stability that BCE can. BCE is one of the largest telecoms in Canada, boasting nationwide coverage and an enviable media empire. That media empire includes both radio and TV stations, as well as an interest in professional sports teams.
What this means for potential investors is that BCE has a stable and growing revenue stream that is also well-diversified. In other words, BCE is a great addition to boost your retirement portfolio.
In terms of results, BCE reported results for the first fiscal of 2020 earlier this month. During that quarter, BCE realized net earnings attributable to common shareholders of $680 million, or $0.75 per common share, reflecting an 8% dip over the same period last year. The impact of the COVID-19 pandemic was largely attributed to that drop.
Despite that dip, adjusted EBITDA for the quarter saw a 1.4% bump over the same period last year. Similarly, the company reported $627 million in free cash flow during the quarter.
BCE’s wireless segment is one area where investors should be focused on. In the most recent quarter, the segment saw 4% year-over-year growth. The wireless segment also gained 19,595 net new subscribers in the quarter.
Generate some income too
Telecoms are well known for offering generous dividends, and BCE is a prime example of that stereotype. BCE currently offers investors a quarterly dividend with a tasty 5.82% yield.
As impressive as that may sound, there are two key points that prospective investors should contemplate. First, BCE has been paying dividends with failure for well over a century. That’s an incredible amount of time that spans all types of volatility from economic downturns to world wars.
To put it another way, the current environment is unprecedented, but BCE has a great record in weathering downturns such as these. This is a key point for long-term investors looking to boost their retirement portfolio income.
This leads to my second point: continuity. BCE has provided upticks to its handsome dividend on an annual or better basis going back years. In fact, BCE averaged a near double-digit increase to its dividend going back over a decade.
During the recent earnings announcement, BCE made the point that despite the continued uncertainty around the COVID-19 pandemic, there are no planned dividend cuts. For investors looking to boost their retirement portfolio income, this is a key statement.
The COVID-19 pandemic brought the longest bull-run in history to an end. In doing so, the pandemic also opened an opportunity for investors to buy into stocks such as BCE at highly-discounted rates.
By way of example, BCE remains down just over 10% year to date. In other words, buying BCE now is a great option for long-term investors looking to boost their retirement portfolio.
Buy it now, hold it forever.
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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 Demetris Afxentiou has no position in any of the stocks mentioned.