BCE recently raised its dividend on strong revenue and earnings. The company’s sales continue to benefit from its network upgrades, with BCE’s latest acquisition set to further boost profit.
BCE INC. (Toronto symbol BCE; www.bce.ca) is Canada’s largest telephone provider, with 6.3 million customers in Ontario, Quebec and the Atlantic provinces. It also has 3.5 million high-speed Internet users and 2.7 million TV subscribers. In all, these operations supplied 55% of BCE’s revenue in 2016.
Another important business for the company is wireless services (33% of revenue). BCE serves 8.5 million cellphone users across Canada.
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The remaining 12% of revenue comes from the company’s Bell Media division; it owns CTV Television (30 stations), 30 specialty channels (including TSN, Discovery, Comedy and Space), four pay-TV services (including the Movie Network and HBO Canada) and 105 radio stations. The business also operates CraveTV, an on-demand video-streaming service with over 1 million subscribers.
BCE’s big investments in its networks continue to pay off with more high-speed Internet customers and wireless subscribers. The gains come despite the company’s increasingly competitive market.
The company lost 38,065 satellite TV subscribers in the quarter. However, the investments in its wireless and Internet networks continue to attract new customers: BCE signed 35,728 wireless subscribers to longterm contracts (net of cancellations) in the latest quarter. That exceeded the consensus forecast for 30,000 additions. The company also gained 22,402 new customers for its Fibe TV business and 14,989 customers for its high-speed Internet service.
Blue Chip Stocks: Manitoba Telecom buy adds 1.3 million customers
BCE has now completed its $3.9 billion acquisition of Manitoba Telecom. That utility gives it 1.3 million telephone and wireless customers in Manitoba—a new market for the company.
BCE trades at 17.4 times the company’s forecast 2017 earnings of $3.51 a share. That yields a high 4.7%.
BCE is a buy.
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For our recent report on a leading Canadian blue chip stock, read CP efficiency program rolls on.