Is it a good company at a reasonable price? A thing to remember is that a cheap price in a stock does not necessarily mean it is a good buy. It does depend on why a stock is cheap. It is having problems and it did cut it dividend. However, a number of analysts like their investment in an AI Data center. They also think that the current dividend is safe. They do have too much debt. Personally, I am keeping my stock in BCE. The stock seems cheap. There is always a risk in buying cheap stock.
I own this stock of BCE Inc (TSX-BCE, NYSE-BCE). This is one of first stocks I bought, which was in 1982. At that time, it was called an orphan and widow stock. It is not easy to figure out what I have earned on this stock because it has spun off shares for Nortel and Bell Aliant. The annoying thing with their spin offs is you always end up with an odd number of shares. In 2016 I sold Manitoba Telecom. To keep the same in Telecom category, I bought some more BCE with the proceeds.
When I was updating my spreadsheet, I noticed I have made a good return on this over the 38 years I have had this stock. My total return is 12.12% with 4.18% from capital gains and 7.94% from dividends. This is a complicated stock as they spun off Bell Aliant and Nortel over the years. I made a very good profit on Nortel which certainly feeds into my total return.
I noticed on the income statement that the company made their money on Gains on Investments. They sold assets of home security and monitored alarm assets to a.p.i. ALARM Inc. Of course, this is why companies have Adjusted Earnings per Share.
If you had invested in this company in December 2015, for $1,015.74you would have bought 19 shares at $53.46 per share. In December 2025, after 10 years you would have received $620.97in dividends. The stock would be worth $622.06. Your total return would have been $1,243.03. This would be a total return of 2.64% per year with 4.79% from capital loss and 7.42% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $53.46 | $1,015.74 | 19 | 10 | $620.97 | $622.06 | $1,243.03 |
The current dividend yield is good with recent dividend cuts. The current dividend yield is good (5% to 6% ranges) at 5.14%. The 5 and 10 year median dividend yields are also good at 6.63% and 5.63%. The historical median dividend yield is moderate (2% to 4%) at 4.38%. In 2025 the company decreased the dividends by 56%. Prior to this decrease the dividend were almost 12% with DRP over 100%. They did need to cut the dividends.
The Dividend Payout Ratios (DPR) could be improved. The DPR for 2025 for Earnings per Share (EPS) is good at 42% with 5 year coverage high at 117%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is too high at 103% with 5 year coverage at 114%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 26% with 5 year coverage at 32%. The DPR for 2025 for Free Cash Flow (FCF 1) is high at 64% with 5 year coverage at 109%. The DPR for 2025 for Free Cash Flow (FCF 2) is high at 64% with 5 year coverage at 95%. FCF for 2025 varies from $3,178M to $3,950M.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 42.27% | 116.59% |
| AEPS | 102.50% | 113.75% |
| CFPS | 26.24% | 32.50% |
| FCF 1 | 63.75% | 109.15% |
| FCF 2 | 63.75% | 95.42% |
Debt Ratios are mainly awful and need improving. The Long Term Debt/Market Cap Ratio for 2025 is too high at 1.14 and currently at 1.10. The DPR for 2025 for Intangibles and Goodwill is too high at 1.00% with 5 year coverage a bit better at 0.96%. The Liquidity Ratio for 2025 is far too low at 0.58 and 0.58 currently. If you added in Cash Flow after dividends, the ratios are still far too low at 0.91 and currently at 1.04. I prefer the Liquidity Ratio to be at 1.50 or higher. The Debt Ratio for 2025 is low at 1.41 and 1.41 currently. I prefer the Debt Ratio to be at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2025 are too high at 3.44 and 2.44 and currently at 3.44 and 2.44. I prefer to see these ratios below 3.00 and below 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 1.14 | 1.10 |
| Intang/GW | 1.00 | 0.96 |
| Liquidity | 0.58 | 0.58 |
| Liq. + CF | 0.91 | 1.04 |
| Liq. + CF + D | 1.75 | 1.99 |
| Debt Ratio | 1.41 | 1.41 |
| Leverage | 3.44 | 3.44 |
| D/E Ratio | 2.44 | 2.44 |
The Total Return per year is shown below for years of 5 to 43 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | -2.69% | -1.74% | -9.67% | 7.93% |
| 2015 | 10 | 1.12% | 2.64% | -4.79% | 7.42% |
| 2010 | 15 | 3.42% | 7.61% | -0.51% | 8.12% |
| 2005 | 20 | 3.96% | 8.27% | 0.83% | 7.44% |
| 2000 | 25 | 3.55% | 4.91% | -0.62% | 5.52% |
| 1995 | 30 | 6.63% | 7.46% | 1.52% | 5.94% |
| 1990 | 35 | 5.87% | 7.09% | 1.82% | 5.27% |
| 1985 | 40 | 5.39% | 5.87% | 1.45% | 4.42% |
| 1982 | 43 | 5.36% | 8.60% | 3.11% | 5.49% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 18.14, 21.83 and 24.75. The corresponding 10 year ratios are 16.39, 19.77 and 21.28. The corresponding historical ratios are 16.05, 17.65 and 19.07. The current ratio is 13.21 based on stock price of $32.42 and EPS estimate for 2026 of $2.45. The current ratio is below the low ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 15.54, 17.96 and 20.39. The corresponding 10 year ratios are 15.49, 17.31 and 18.54. The corresponding historical ratios are 14.27, 15.66 and 17.77. The current ratio is 12.61 based on stock price of $32.42 and AEPS estimate for 2026 of $2.57. The current ratio is below the low ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $34.98. The 10-year low, median, and high median Price/Graham Price Ratios are 1.40, 1.59 and 1.76. The current ratio is 0.93 based on a stock price of $32.42. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Book Value per Share Ratio of 3.11. The current ratio is 1.53 based on Book Value of $19,732M, Book Value per Share of $21.16 and a stock price of $32.42. The current ratio is 51% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have a Book Value per Share estimate for 2026 of $22.59. The analyst calculates the Book Value differently than I do and, in this case, the 10 year median ratio is 2.52. The Book Value per Share of $22.59, implies a Book Value of $21,066M and a ratio of 1.44 with a stock price of $32.42. This ratio is 43% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 6.82. The current ratio is 4.00 based on Cash Flow per Share estimate for 2026 of $8.10, Cash Flow of $7,554M and a stock price of $32.42. The current ratio is 41.34 below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 4.38%. The current dividend yield is 5.40% based on a dividend of $1.75 and a stock price of $32.42. The current ratio is 23% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 5.63%. The current dividend yield is 5.40% based on a dividend of $1.75 and a stock price of $32.42. The current ratio is 4% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This stock price testing suggests that the stock price is relatively reasonable but above the median. (This test is tainted by the recent dividend cut.)
The 10-year median Price/Sales (Revenue) Ratio is 2.26. The current ratio is 1.20 based on Revenue estimate for 2026 pf $25,115M, Revenue per Share of $26.93 and a stock price of $32.42. The current ratio is 47% below the 10 year median ratio.
Results of stock price testing is that the stock price is probably cheap. All the tests are pointing to a cheap price except for the 10 year dividend yield test which is pointing to a reasonable but above the median price. However, this Dividend test has problems due to the recent dividend cut and this test works best with increasing dividends.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (5), Hold (7), Underperform (2), and Sell (1). The consensus would be a Buy. The 12 months stock price consensus is $37.50 with a high of $45.00 and a low of $31.00. The stock price consensus price of $37.50 implies a total return of 21.07% with 15.67% from capital gains and 5.40% from dividends based on a current stock price of $32.42.
Analysts on Stock Chase think that the dividend is safe as they have enough cash flow. They worry about the debt. They think that they have regulatory challenges that will not go away. Some are just watching and waiting. Sneha Nahata on Motley Fool thinks this company will be a cash-creating machine. Joey Frenette on Motley Fool says this stock may have reduced its dividend, but it’s in better shape today and could be on the path back to growth. He is unsure if it has bottomed out for good. The company put out a Press Release about their fourth quarter of 2025.
Insider Money via Yahoo Finance has reviewed this stock and likes the investment into a AI data center. Simply Wall Street via Yahoo Finance has reviewed this stock and likes their expansion into higher value AI Infrastructure. Simply Wall Street has 4 warnings of debt is not well covered by operating cash flow; earnings are forecast to decline by an average of 18.7% per year for the next 3 years; large one-off items impacting financial results; and unstable dividend track record.
BCE provides wireless, broadband, television, and landline phone services in Canada. It is one of the Big Three national wireless carriers. It is also the incumbent local exchange carrier throughout much of the eastern half of Canada, including in the most populous Canadian provinces: Ontario and Quebec. BCE has a media segment that holds television, radio, and digital media assets. BCE licenses the Canadian rights to HBO Max and Starz. Its web site is here BCE Inc .
The last stock I wrote about was about was Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF) ... learn more. The next stock I will write about will be Melcor Developments Inc (TSX-MRD, OTC-MODVF) ... learn more on Wednesday, April 15, 2026 around 5 pm. Tomorrow on my other blog I will write about Screaming Value Portfolio.... learn more on Tuesday, April 14, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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