If You Invested $10,000 in BCE Stock in 2023, This is How Much You Would Have Today

BCE stock (TSX:BCE) has seen its shares fall by 18% in the last year, but could the company be making a comeback after restructuring?

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I’m going to cut right to the chase. When it comes to BCE (TSX:BCE), investing last year hasn’t been great for investors. In fact, shares have sunk lower and lower. BCE stock is now down 18% in the last year alone. So if you were to have put $10,000 into BCE stock a year ago, that would be worth just $7,538 as of writing.

The question is, what about the next year. For that, let’s look at how the company has been performing, and whether it looks as though BCE stock could bounce back.

Earnings

First off, let’s look at BCE stock in terms of its earnings both for the fourth quarter and the year. BCE was able to meet all their financial targets for 2023, seeing strong mobile and internet subscriber growth, according to the company. Net earnings, however, decreased due to one-time costs.

The company also had to perform its largest workforce cut in 30 years, reducing it by 9% or 4,800 employees. It also slowed its fibre network expansion owing to government policies and regulations. This will mean investing $1 billion less over the next two years.

Furthermore, BCE is partnering with Best Buy to operate some stores and cut others, and focusing on The Source. It is also selling 45 radio stations and expanding its Crave streaming service.

Analysts weigh in

As you can see, this was a lot of cutting for BCE. So no wonder investors were concerned. Analysts, however, had a more balanced view. The major restructuring plan to improve profitability and leverage recent investments in technology created mixed responses.

Some saw the restructuring as positive, with improved profitability leading to a company that is more efficient. What’s more, most believe the high dividend is still safe even with the cuts.

However, a high dividend payout limits the future investments of BCE. So it might not be able to differentiate itself from its competitors. The payout ratio is expected to continue being high for several years as the company puts the restructuring plan into place.

Should you buy?

This is a pretty volatile time to be investing in BCE stock, with shares potentially only getting worse instead of better in the short term. However, the telco invested heavily in upgrading its internet network with fibre, and that’s helped gain more broadband subscribers than competitors. Yet it’s now set to slow, and that could give others time to catch up. Even so, they still have the advantage of more customers.

Bell continues to provide a strong wireless service, along with a top-rated media business through Crave, HBO Max, CTV and TSN. So more focus here could provide more profitability.

Yet the regulations limiting expansion cannot be overlooked, with increased competition from peers expanding. This could even lead to price cuts to keep up with the competition. 

Overall, BCE is a good competitor in the Canadian telecom market. However, investors may want to wait as they face off with these challenges and meet them on the other side.

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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