Markets have never been more volatile. Between the ongoing global pandemic to the post-election drama unfolding in Washington, there’s never been a volatile time for investors. While some may argue there are opportunities for significant growth (there are), the more pressing issue is diversifying your portfolio with investments that can offer stability during volatility.
Stability during volatility
BCE is one of the largest telecoms in Canada. Telecoms are notoriously great defensive stocks, and that view has only increased in the past few years. The explosive growth of mobile commerce, a growing collection of apps, and compelling device offers have helped fuel that surge.
As a result, smartphones are no longer seen as auxiliary communication devices. They are multi-purpose devices that have become an extension of our digital selves (which also happen to have a phone app). Smart devices have already replaced dozens, if not hundreds of standalone devices. Examples of this include still and video cameras, radios, alarm clocks, notebooks, calculators, and countless others.
That trend isn’t changing either. Each year, new devices are released that offer new functionality that consume more data. It becomes a vicious cycle, whereby BCE and other telecoms reap the reward of device sales and higher data rates.
Another key point is home internet access. Home connectivity was once seen as a discretionary add-on. Now that the pandemic has forced many workers to work full-time from home, home internet connectivity has become a requirement.
Both factors contribute to BCE being a viable option for those investors looking for stability during volatility, and I haven’t even mentioned BCE’s media segment. In addition to being one of the largest telecoms in Canada, BCE is a media behemoth. The company owns a growing number of TV and radio stations, which are complementary to the core subscription business. In fact, BCE even has a stake in professional sports teams, making it a great diversified investment option.
But wait — there’s more!
One of the main reasons why investors continue to flock to BCE is the company’s dividend. BCE has been paying investors a handsome quarterly dividend for well over a century without fail. In fact, this Dividend Aristocrat currently offers investors a mouth-watering 6.07% yield. This makes BCE not only an established income-earning stock but also one of the better-paying options on the market.
Again, providing stability during volatility.
In my opinion, BCE is an excellent long-term investment option that should be a core-holding for nearly every portfolio. Buy it now, forget about it, and get rich.
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Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned.