BCE INC. $42.68 (Toronto symbol BCE; Shares outstanding: 775.9 million; Market cap: $33.4 billion; TSINetwork Rating: Above Average; Dividend yield: 5.5%; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. It also sells satellite and Internet TV services across the country.
In the three months ended March 31, 2013, BCE’s earnings per share rose 11.6%, to $0.77 from $0.69 a year earlier. Revenue increased slightly, to $4.35 billion from $4.33 billion. Revenue fell 2.8% at the wireline (land line) division, which accounts for 58% of total revenue. This division faces rising competition. As well, many customers are cancelling land lines and switching to wireless devices.
Revenue from wireless services (32% of total revenue) rose 6.3%. The company’s network upgrades continue to attract new wireless subscribers, and it’s benefiting from rising use of smartphones, which generate higher monthly fees than regular cellphones. Bell’s Fibe high-speed Internet TV service also offers strong growth prospects.
BCE has just received regulatory approval for its $3.2-billion purchase of Astral Media Inc. Astral’s 22 TV stations, 84 radio stations and TV and specialty channels add to BCE’s diversification.
BCE is still a safety-conscious buy.
