Hello my Telco!

As you might be aware, to diversify my investments, last month I worked through a five-part series that discussed which of the big three telecommunications companies (Bell, Rogers or Telus) I should invest in. Nothing against you Shaw, but I gotta start somewhere…

Owning a telco, at least one for now, would give me some exposure (and upside) to this sector. Recall the TSX composite index weighting almost prescribes owning a telco: financials (32%), energy (26%), materials (20%), industrials (6%), consumer goods (5%), telecommunications (4%), and other sectors (7%).

While Rogers and Telus are great dividend stocks in my opinion, I decided to pursue BCE as my telco entry. Sure, analysts and the media kick Bell once in awhile, and true, there’s only one way to go when you’re at the top, but I think it will be some time before # 1 gets knocked off (unless of course, Bell has some blue-chip “transgressions” – right Tiger?) Ouch.

This post is to announce late last month, I made my BCE transaction and now I’m the owner of a few shares. My intention later this summer is to start my full DRIP with BCE that includes no monthly minimum. This means, I could send in an optional cash purchase for $2.00 if I wanted to and I would get a partial BCE share. I probably won’t do that, but with little money to invest right now, it’s nice to know I could. Hopefully I can contribute $50/month to get a few more shares purchased in 2010. That’s saving just over $10/week; equivalent to one bottle of table wine we drink with our BBQ’ed steak. OK, we won’t give that up (the wine) but it’s not much to save for!
BCE is yielding over 5% now and they have a whack of free cash flow. That means, over the next few years dividends should continue to rise and rising dividends is what I’m into.
What do you think about my BCE purchase? What telcos do you own?

Post Comment