BCE Inc 2

I own this stock of BCE Inc. (TSX-BCE, NYSE-BCE). Hard to know how much I made just on BCE as they spun off both Nortel (2000) and Aliant (2006). According to Quicken I have made a total return of 12.94% per year when I include all these stocks in the analysis and include my Trading and RRSP accounts. I think that is the only way to analyze my investment. Of the total return I made of 12.94% per year, 7.75% was from capital gains and 5.19% from dividends.

When I look at insider trading, I find insider selling at $10.6M and it is all by the CEO. It seems that he is cashing in options. There is a bit of insider buying by directors at $1M. The net insider selling is at $9.6M. Under this company there are not just options, but other option type vehicles like Performance-based Restricted Share Units and Restricted Share Units.

The CEO has shares worth $6.9M and has options are worth $80.2M. The CFO has shares worth $0.2M and has options worth $20.7M. An officer has shares worth $0.5M and has options are worth $13.8M. A director has shares worth $0.9M and has options worth $0.4M. This is just to give you an idea on insider share ownership and option values.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.65, 12.47 and 13.74. I get a current P/E Ratio of 15.23 based on 2013 earnings of $3.10 and stock price of $47.21. I get a Graham Price of $30.70 and 10 year low, median and high median Price/Graham Price Ratios of 1.04, 1.21 and 1.32. The current P/GP Ratio is 1.54. Both these tests suggest that the stock price is on the high side.

I get a 10 year median Price/Book Value per Share Ratio of 2.07. The current P/B Ratio is 3.49. The current ratio is some 69% higher than the 10 year median and this suggests a rather high stock price. (The Book Value has been declining lately, however, there is still a big difference in these ratios.)

The 5 year median dividend yield 5.91% and the current dividend yield on a stock price of $47.21 is 4.94% a value that is some 7% lower. There is not a huge difference, but it still suggests that the stock price is relatively high.

When I look at analysts' recommendations, I find Buy and Hold recommendations. The vast majority of the recommendations are a Hold recommendation and the consensus recommendation is a hold. The 12 month stock price target is $44.80. This implies no total return over the next year with 4.94% from dividends, but a capital loss of 5.10%. The capital loss would basically cancel out the dividend income. (See my site for information on analyst ratings and what they mean.)

See report on BCE at CanTech where Rob Goff of Byron Capital says why he rates BCE as a Hold. Gordon Pape likes this stock and you can read what he says at The Stock Advisors site. He thinks it is a good stock for conservative investors. According to Mideast Times CIBC reiterated their sector perform (Hold) rating recently for BCE.

I think that the stock price is a little too high relatively to make a good long term purchase of this stock. Dividend is good at 4.94%. If dividends are important to you, it is good and there is certainly a good chance it will continue to grow. However, if you hold a stock for the long term, paying too much can greatly affect your long term total earnings.

BCE is Canada's largest communications company, providing the most comprehensive and innovative suite of communication services to residential and business customers in Canada. Operating under the Bell and Bell Aliant brands, the Company's services include Bell Home phone local and long distance services, Bell Mobility, Virgin Mobile and Solo Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite and VDSL television, IP-broadband services and information and communications technology (ICT) services. Its web site is here BCE. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on Twitter or StockTwits.