BCE Inc. 2

On my other blog I am today writing about Shorting Canada continue...

Sound bite for Twitter and StockTwits is: Good Dividend; Maybe expensive. Most of my stock price testing shows this stock to be on the expensive side. However, it may not be expensive looking at the dividend yields. See my spreadsheet at bce.htm.

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.

The 5 year low, median and high Price/Earnings per Share Ratios are 11.98, 13.36 and 14.75. These are not much different from the 10 year corresponding values of 11.81, 12.92 and 14.25. The current P/E Ratio is 16.73 based on a stock price of $58.88 and 2015 EPS estimate of $3.22. This stock price testing would suggest that the stock price is relatively expensive.

I get a Graham Price of $30.71. The 10 year low, median and high median Price/Graham Price Ratios are 1.04, 1.23 and 1.35. The current P/GP Ratio is 1.75 based on a stock price of $53.88. This stock price testing would suggest that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 2.04. The current P/B Ratio at 4.14 is some 103% higher. The current P/B Ratio is based on a BVPS of $13.02 and a stock price of $53.88. This stock price testing would suggest that the stock price is relatively expensive. The problem with BV is that it has been declining recently.

The only section were the stock price might be showing as reasonable is in comparison with the dividend yield. The current dividend yield is 4.83%. The 5 year median dividend yield is 5.19%, a value just 7% higher. The 10 year median dividend yield is 5.17 and the 15 year dividend yield is 4.67%. This could suggest that the stock price is relatively reasonable.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. The most recommendations are a Hold, with a few less Buy recommendations. The consensus recommendation would be a Hold. The 12 month stock price is $55.80 and with a starting stock price of $53.88, this will mean a total return of 8.39% with 3.56% from capital gains and 4.83% from dividends.

The Motley Fool gives 3 reasons to buy BCE. Some analysts think that BCE could buy Manitoba Telecom (TSX-MBT). This Motley Fool article talks about a possible MBT buyout. This Markets Wired article talks about BCE's 2014 reporting and recent analysts' recommendation upgrades.

This is the second of two parts. The first part was posted on Friday, April 10, 2015 and is 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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