A Dividend Heavyweight I’d Buy Over Enbridge Right Now

BCE Inc. (TSX:BCE) is a dividend heavyweight I prefer over Enbridge Inc. (TSX:ENB) due to its value and impressive income right now.

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The S&P/TSX Composite Index rose 135 points to close out the trading session on Tuesday, March 21. This marked the second straight triple-digit increase for the TSX Index after a turbulent few sessions in the previous week. Some of the top-performing sectors yesterday included health care, energy, and base metals. Regardless, some investors may want to target dependable dividend heavyweight equities in this volatile period.

Today, I want to discuss a top dividend stock I’m looking to snatch up over Enbridge right now. Let’s jump in.

Why I’m looking to another top dividend stock over Enbridge right now

Enbridge stock has dropped 4.6% in 2023 as of close on March 21. Moreover, its shares have plunged 10% in the year-over-year period. That coupled with its middling value at the time of this writing has me looking elsewhere on the TSX for a dividend heavyweight.

BCE (TSX:BCE) is a Toronto-based telecommunications company that provides wireless, wireline, internet, and television (TV) services to its broad client base. Shares of this dividend stock have delivered marginal growth in the year-to-date period. Meanwhile, the stock is still down 10% year over year.

Should investors be encouraged by the company’s recent earnings?

This company released its fourth-quarter (Q4) and full-year fiscal 2022 earnings on February 2, 2023. In Q4 2022, BCE achieved impressive broadband customer growth with 330,743 total net activations. Operating revenues increased 3.7% year over year to $6.43 billion in Q4. This increase was powered by wireless, residential internet, and media growth and improved business wireline data equipment sales.

EBITDA stands for earnings before interest, taxes, depreciation, and amortization, aiming to get a clearer picture of a company’s profitability. BCE delivered marginal adjusted EBITDA growth of 0.3% to $2.43 billion in Q4 2022. Bell Wireless was key to the increase in profitability while Bell Wireline and Bell Media suffered year-over-year declines.

For the full year, BCE delivered operating revenues growth of 3.1% to $24.1 billion. The company reported adjusted net earnings of $3.05 billion, or $3.35 per diluted share — up 5.6% and 5.0%, respectively, compared to the prior year. Moreover, adjusted EBITDA climbed 3.1% to $10.1 billion for the full year in fiscal 2022. Free cash flow increased 2.9% year over year to $3.06 billion.

Looking ahead to 2023, BCE is projecting revenue growth between 1% and 5%. Meanwhile, the company has forecasted adjusted EBITDA growth in the range of 2-5%. Moreover, it expects free cash flow growth between 2% and 10%.

BCE: Why it’s on the same level as Enbridge today

Shares of this dividend heavyweight currently possess a very solid price-to-earnings ratio of 20. That puts BCE in favourable value territory compared to its industry peers. Moreover, BCE currently offers a quarterly dividend of $0.968 per share. That represents a tasty 6.3% yield. Better yet, this dividend stock has achieved 14 consecutive years of income growth. This is a dividend heavyweight that is well worth snatching up in late March 2023.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

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