2022 is going to go down as one of the weirdest, most volatile years in recent memory. Yet during this bumpy market ride, investors can find several intriguing opportunities to capitalize on. Specifically, there’s an opportunity to buy 1 stock before 2023 – and it’s a stellar long-term pick!
Seriously? Buy 1 stock before 2023?
Let’s start with a quick reminder that both new investors and seasoned pros should know well. Diversifying your portfolio is always the best approach. So, any stock that you do end up buying should always be part of a larger, well-diversified portfolio.
This can be tough to ask of new investors who are often limited in what they can afford to invest. Fortunately, the market gives us plenty of options to consider buying over time, which leads to the stock I am considering.
The stock that I’m looking to buy before 2023 is BCE (TSX:BCE). So, what then makes BCE a compelling buy right now? Let’s look at a few reasons.
What does BCE offer?
First, let’s start with what BCE is and is not. BCE is a telecom, but not a pure play telecom. Actually, BCE is better classed as a huge telecom. The company is a $58 billion behemoth that offers the usual bevy of subscription-based services. That includes wireless, wired, internet, and TV services.
BCE also operates a massive media segment. That segment includes dozens of radio and TV stations, as well as an interest in professional sports teams. Prospective investors should see this additional segment as another source of revenue for the company that is also complementary to its core subscription business.
The subscription-based business, or more specifically, parts of that segment, is where investors should be looking. Specifically, I’m referring to both the wireless and internet areas.
When the pandemic started a few years ago, it forced many of us to work and study in a remote setting. This wasn’t an entirely new frontier for many, but what the pandemic did was make it a feasible (and in many cases, required) option. For some, that arrangement persists to this day.
As a result, the need for a fast and reliable internet connection has been elevated to one of necessity. That’s evident in BCE’s most recent quarterly results where the segment saw its highest growth in 17 years.
Net activations for the period hit 89,652, reflecting a 36.4% increase over the prior year.
The same could be said of BCE’s mobile segment too. In the most recent quarter, the mobile business reported 224,343 net new mobile activations, the highest ever. That growth coincides with BCE’s aggressive rollout of 5G services across the entire country.
Keep in mind that mobile commerce is another area that grew significantly during the pandemic, but unlike the internet segment, this growth journey started several years earlier.
In short, BCE runs a well-diversified, defensive business that is full of growth potential.
Buy 1 stock before 2023: BCE
Apart from the defensive business it operates, BCE does offer investors a few more compelling reasons to consider. Specifically, I’m referring to BCE’s dividend and current timing.
Few investors may realize this, but BCE is one of the better-paying dividend stocks on the market. In fact, BCE has been paying out a juicy dividend for well over a century and has provided an annual uptick to its dividend without fail for over a decade.
BCE’s quarterly dividend currently carries a yield of 5.74%, which is one of the higher-paying options on the market. This means that a $40,000 investment in BCE will earn a first-year income of just under $2,300.
Keep in mind that investors not yet ready to draw on that income can reinvest it until needed. This provides an additional boost to any eventual income stream.
Finally, let’s talk timing. Like most of the market, BCE is down year to date. As of the time of writing, the stock is down just over 3% for the year.
This presents a unique opportunity for long-term investors to buy the stock at a discount, which won’t last.
In my opinion, BCE is a great long-term option to consider if you buy 1 stock before 2023.
