Why BCE Stock May Be the Only Stock You Need in 2023

BCE (TSX:BCE) stock offers a strong dividend at 6.45%, with the potential for enormous growth after 2023. Yet right now, it’s a major deal.

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BCE (TSX:BCE) is one of those long-time stocks that simply won’t go away anytime soon. It’s been around for decades, and there is certainly a large future ahead of it.

Yet with the potential merger between Rogers and Shaw, many wonder if BCE stock will remain the heavyweight of the Canadian telecommunications industry. In my view, yes. And it’s also the stock I would consider buying in 2023.

Future looks bright for BCE stock

When I’m discussing the future of BCE stock I’m talking about short and long term. BCE stock in the short term can currently boast the number one spot when it comes to internet speeds. Its 5G rollout went out smoothly, and what’s more, it’s now rolling out 5G+ as well.

Now, that’s great news for the short term. But in the long term, I would consider the company as well. After all, we’re in a time when wireless communication and internet is a must; in fact, some argue it should be a global right.

Therefore, this reality has come with the expansion of telecommunications infrastructure. Infrastructure that BCE stock would certainly benefit from. And, in fact, given it’s the largest of the telecom companies, it’s likely to be able to invest in and expand within this infrastructure growth before the rest.

Enter a downturn

Now, of course, the concern in 2023 is the economic downturn and potential for a recession. We’re still waiting at this point to hear from the Bank of Canada as to whether we’ve seen a decrease in gross domestic product (GDP) during this last quarter. Should we then have two decreases in a row come May, we will officially be in a recession.

So, how could BCE stock perform during a potential recession? Honestly, I would look to the past for answers and couple that with current financial performance. During the Great Recession, BCE stock collapsed by 40%. It then took two years to reach those previous heights once more. After peaking in April last year, shares are now down by 15%. In that sense, it has more of a fall to come.

However, that’s where we need to look at the company’s financials. Even during a poor year all around, and even after strong pandemic growth, BCE stock managed to achieve all its 2022 financial targets. It achieved revenue 3.7% higher than the year before, though net earnings were down 13.8%. It was also able to achieve higher media revenue as well for the year.

The company expects to see revenue increase in 2023 between 1% and 5% year over year, though it expects a 3-7% loss in adjusted earnings-per-share growth. Even so, BCE stock increased its dividend by 5.2% during the latest earnings report.

Bottom line

What this shows is that while there is certainly going to be some trying times ahead, it looks like that’s the same for everyone. And while shares may drop in the near term, BCE stock remains confident that growth will continue long term — certainly out of 2023.

So, while shares may drop this year, it could be a great time to pick up the stock for long-term growth. As well as its 6.45% dividend yield. After all, from the fall in 2008, shares have climbed a whopping 495% since then! In just over a decade, you could be looking back and claiming similar growth.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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