Income, value, and growth investors are having a field day on the Toronto Stock Exchange (TSX) in June 2021. The rally of Canada’s primary stock market index appears unstoppable. On June 11, 2021, the TSX finished the week at 20,138.40, or a 15.52% year-to-date gain. Also, it was the fourth time the index closed higher week over week.
All 11 primary sectors are in positive territory, with the energy sector (+55.25%) leading the advancers, followed by the healthcare (+27.65%) and financial (+20.9%) sectors. Canadian investors can find a host of market movers from each sector, and many of them are screaming buys at this juncture.
The more familiar names with strong buy ratings are Pembina Pipeline, Canadian Natural Resources, Shopify, Alimentation Couche-Tard, and Canadian Imperial Bank of Commerce. However, if you were to invest today, you should buy BCE (TSX:BCE)(NYSE:BCE) without delay.
First 5G MEC in Canada
There are compelling reasons to invest in Canada’s largest telecom company. On June 3, 2021, BCE announced its agreement with Amazon Web Services (AWS). The collaboration involves the modernization of the digital experience for Bell customers and support for 5G innovation across Canada.
The partnership will result in the first 5G multi-access edge computing (MEC) deployment in the country. Bell and AWS will offer AWS Wavelength Zones on Bell’s 5G network for fast and efficient 5G MEC. In addition, the breadth and depth of AWS technologies will enable BCE to create and scale new consumer and business applications faster.
Mirko Bibic, president and CEO of BCE and Bell Canada, said, “Bell’s partnership with AWS further heightens both our 5G network leadership and the Bell customer experience with greater automation, enhanced agility, and streamlined service options.”
BCE’s top brass adds the tandem will provide the next-generation service innovations for consumers and business customers to support Canada’s growth and prosperity in the years ahead. Moreover, BCE will leverage AWS Wavelength to embed AWS compute and storage services at the edge of its 5G telco networks. Application developers can then serve edge computing workloads like machine learning and IoT, including content streaming.
Cementing its industry dominance
Expect BCE to maintain its industry dominance with its accelerated capital-investment plan — the biggest ever in the telecommunications sector. The $55.78 billion company invests $4 billion annually for network expansion over the last decade. In 2021 and 2022, management will add $1.7 billion more in infrastructure investment.
This additional investment will significantly increase wirelines and wireless connections in rural and urban centres over the next two years. Customers can look forward to expanded plans for all-fibre connections. Meanwhile, BCE will create employment opportunities as network construction activity accelerates.
BCE hopes to achieve 70% national 5G coverage this year from the current 35% of Canada’s total population. Bell announced recently expansions in 23 cities and towns in Manitoba, Ontario, and Quebec.
Rare dividend feat
Would-be investors are in luck, because BCE is a high-yield Dividend Aristocrat. At $61.66 per share, the telco stock pays a lucrative 5.7% dividend. But, more importantly, the leading telecommunications provider hasn’t missed paying dividends since 1881.
BCE’s more than a century dividend sequence is rare. Only a handful of few blue-chip companies can boast of such an impressive feat. So, make the telco stock your core holding to derive endless income streams.
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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC, Amazon, and Shopify. The Motley Fool recommends PEMBINA PIPELINE CORPORATION and recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $1,140 calls on Shopify, short January 2022 $1,940 calls on Amazon, and short January 2023 $1,160 calls on Shopify.