Wednesday, August 2, 2017

BCE: Telecom's Little Giant


BCE: Telecom's Little Giant

 | About: BCE Inc. (BCE)

Summary

BCE is a leader in North American telecommunications.
BCE provides phone, Internet, TV connections and media programming.
One goal, six strategic imperatives.
Currency exchange made easy.

Thesis

While AT&T (NYSE:T) and Verizon (NYSE:VZ) vie for pole position among U.S. telecoms, BCE, Inc. (NYSE:BCE) is the little giant among North American telecoms. BCE is the largest telecommunications company in the competitive Canadian market. It has led the way in North America in building a comprehensive, innovative communications platform. AT&T and Verizon are taking on more debt and scrambling to embrace related industries. BCE is already there and is well-positioned for steady growth in earnings and dividends. BCE is 1.89% of the portfolio. The cost basis is US$43.99. My target to add more is US$45.50.
Unless otherwise noted, I use U.S. dollars in this article.

The Telecom Universe

Major competitors are Rogers Communications, Inc. (NYSE:RCI), Telus Corporation (NYSE:TU) and Shaw Communications, Inc. (NYSE:SJR). This table gives a quick snapshot of BCE, the other three major Canadian telecommunications companies and the two largest U.S. telecoms.
TelecomPriceQtr Div C$Yr Div C$Yr Div US$YieldShares in MillionsBook ValueTotal Book ValueLT DebtEquity Mkt CapTotal Debt% Total DebtEPSP/EPayout Ratio
CR
Est 5Y EPS
BCE46.950.71752.872.314.92%897.813.4912111.541.4%4215224063.057.1%2.6118.088.5%BBB+3.65%
RCI51.770.481.921.552.98%505.58.904498.765.6%2616816989.064.9%1.5733.098.4%BBB+8.00%
TU36.320.49251.971.594.37%591.010.926453.756.1%2146513777.064.2%1.7121.292.7%BBB+6.37%
SJR22.180.29631.190.954.30%495.78.954436.248.7%109945568.050.6%0.8725.5109.6%BBB-9.05%
T39.001.965.03%615020.08123492.049.5%239850143665.059.9%2.0519.095.6%BBB+7.02%
VZ47.942.314.82%40805.7623500.880.6%195595116546.059.6%3.0016.077.0%BBB+2.47%

Table Data: Price was the closing price as of 7/28/17. Qtr Div C$ is the current quarterly dividend in Canadian dollars. Yr Div C$ is the current annual dividend in Canadian dollars. Yr Div US$ is the annual dividend in U.S. dollars, using the 7/28/17 currency exchange rate from X-Rates: 1 CAD = US$ 0.8048 (The Canadian dollar has been gaining strength vis-a-vis the U.S. dollar in recent weeks). Finviz was the source of Shares in Millions (shares outstanding), Book Value (per share), trailing 12 months EPS and Est 5y EPS (estimated 5-year EPS growth). Total Book Value is the Book Value times the number of shares outstanding. Better Investing was the source of Total Debt in millions and percentage of LT Debt (long-term debt to total capitalization). Equity Mkt Cap is the 7/28 price multiplied by the shares outstanding. % Total Debt is the total debt divided by the total equity market capitalization. The P/E Ratio is the 7/28 price divided by the trailing 12 months EPS. The Payout Ratio is the annual dividend divided by the trailing 12 months EPS. CR is the credit rating is from Standard & Poor's, as reported by F.A.S.T. Graphs.

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