Wednesday, April 2, 2014

BCE Inc.

On my other blog I am today writing about possible cheap dividend stocks continue...

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 is 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.

I am using quicken to track my stocks and I have only been tracking this stock on Quicken since 1987. I have done some buying and selling of BCE shares since my initial purchase. I also have sold off Nortel and Bell Aliant.

For my trading account which has my original shares tracked since 1987, I have made 9.4% per year with 3.83% per year from capital gains and 5.57% from dividends. If I consider both my Trading and RRSP accounts for this stock since 1987, I have made 12.91% per year with 7.69% from capital gains and 5.22% from dividends. For BCE, I calculate that the total return over the past 5 and 10 years at 16.58% and 9.72% per year. The dividend portion of this return was at 6.03% and 4.55% per year. The capital gains portion has been at 10.55% and 5.17% per year.

This stock has a decent dividend and a decent record of increasing dividends. The current dividend yield is 5.16% and the 5 year median dividend yield is 5.31%. The dividends have increased at the rate of 9.7% and 6.8% per year over the past 5 and 10 years. As near as I can figure out, I am making a return of 24% on my original stock purchase in 1982. This is not as good as the banks have been, but it is not bad.

The 5 year median Dividend Payout Ratios are at 71% for EPS and 28.4% for CFPS. The DPR for 2013 was 91% for EPS and 28.4% for CFPS. They are expected to be more in line with the 5 year median values in 2014.

The outstanding shares are down slightly over the past 5 and 10 years with the decrease at .07% and 1.7% per year over the past 5 and 10 years. Share have increased due to stock options and share issues and decreased due to buy backs. Revenues, earnings and cash flow have all increased over the past 5 and 10 years at a moderate rate.

Revenue per Share is up by 3.6% and 2.6% per year over the past 5 and 10 years. EPS has increased by 20% and 3% per year over the past 5 and 10 years. EPS has such a good showing because EPS were depressed 5 years ago. The 5 year running averages gives a different picture with EPS up just 3.1% and 3.5% per year over the past 5 and 10 years.

The Cash Flow per Share is up by 3.4% and 3.4% per year over the past 5 and 10 years. Here again the 5 year running averages are not as good with the increase at just 0.4% and 2.5% per year over the past 5 and 10 years.

The Return on Equity has been lower than 10% only twice in the past 10 years and both times the ROE was at 9%. The ROE for 2013 was 14.7% and the 5 year median ROE is also 14.7%. The ROE on comprehensive income can vary a lot. For 2013 the ROE for comprehensive income was at 21.2%. However, the 5 year median ROE on comprehensive income is lower than for net income and was at 12.3%.

The Liquidity Ratio for 2013 was 0.64. This means that current assets cannot cover current liabilities. However, if you add in cash flow after dividends, the ratio is 1.24. The Liquidity Ratio is 0.95 when you do not consider the current portion of the long term debt in this ratio. If you add in cash flow after dividends, the ratio is 1.83. This utility does use current cash flow to cover current liabilities.

The Debt Ratio for 2013 was 1.56 and this is good. The Leverage and Debt/Equity Ratios for 2013 are at 2.79 and 1.79 and these are typical for this sort of company.

Stocks do change over time and this stock certainly has. It is not the safe stock that I originally bought. However, I have made a decent return over time on this stock. I do not have that much of this stock, but I have no current intentions to sell my shares or buy anymore. If I was starting out today, I do not think that BCE would be my first choice of a stock to buy. See my spreadsheet at bce.htm.

This is the first of two parts. The second part will be posted on Thursday, April 3, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

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.

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. 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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