BCE Inc

I am reviewing this stock (TSX-BCE) today as I was asked to. I have updated my spreadsheet for the latest published financial statements of March 2009. I have had this stock since 1982 and it is difficult to determine what profit I have made on this stock. A lot of things have happen since I bought it. The biggest thing was the separation of Nortel stock from BCE. This happened when 2000when this stock and especially Nortel was in a free fall, so it is hard to value what Nortel was really worth when I got that stock.

The one thing that is certain is that I have had a lot of dividend income from this stock. It would appear that the dividend is secure. They are paying about 20% of the cash flow and this should not be a problem. They also raised the dividends by 4% for 2009 and this is good.

If you look at the growth figures for this stock, none are particularly good. The only one that is decent is the dividend growth at 4% per year for the last 5 years. This is higher than our inflation rate. However, the 10 year growth on dividends is less than 1% per year and this is not higher than inflation over the last 10 years. The growth in Book Value at 7% per year over the last 5 years is not bad either. Not the greatest of growth in book value, but not bad. However, here again, the 10 year figure is just below 0% growth and this is awful.

The next thing to look at is the Asset/Liability Ratios. For the Liquidity Ratio is very low at 0.83. However, this is about average for the liquidity ratio on this stock. The Asset/Liability Ratio is much better at 1.57. This is a bit better than the 5 year average. For both these ratios, I would prefer to see a ratio of at least 1.50.

A good thing to note is the Return on Equity (ROE). The 5 running average ROE to December 2008 was 15.8%. The ROE for December 2008 was low at 6.5%, but the ROE for March 2009 quarter is 10.7%. Another good thing is the low Accrual Ratio. It was negative for 2008 and this is very good. It is still low for the March 2009 quarter.

I must admit that I have not said many good things about this stock. Sometimes I wonder if I should hold on to my shares. However, they are less than 1% of my portfolio and I have held them since 1982, which makes it one of my earliest purchases of stock.

On Monday, I will look into what the analyst say about buying this stock.

BCE Inc. is a communications company. BCE provides local telephone, long distance, wireless communications, internet access, data, video and other services to residential and business customers. Its web site is www.bce.ca. See my spreadsheet at www.spbrunner.com/stocks/bce.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets.