BCE INC. $46.26 (Toronto symbol BCE; Shares outstanding: 775.4 million; Market cap: $35.4 billion; TSINetwork Rating: Above Average; Dividend yield: 5.0%; 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 December 31, 2012, BCE’s earnings per share rose 4.8%, to $0.65 from $0.62 a year earlier. Revenue was unchanged at $5.2 billion. Revenue at the traditional telephone business, which supplies 51% of BCE’s overall revenue, fell 3.7%, partly due to strong competition from cable companies.
However, many of BCE’s land-line clients are switching to mobile phones, which are more profitable for the company. That helped fuel a 6.8% revenue increase at the wireless division (28% of total revenue). Revenue at BCE’s media division (11%) rose 2.2%.
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 also offers big growth prospects.
The stock trades at 15.3 times BCE’s forecast 2013 earnings of $3.03 share. BCE has also raised its quarterly dividend by 2.6%, to $0.5825 a share from $0.5675. The new rate yields 5.0%.
BCE is still a safety-conscious buy.
