Then and now – Bell Canada
This post is an update on my investing history to date with Bell Canada (BCE) stock.
This post is a continuation of my series Then and Now where I revisit some older blogposts and either rip them to shreds (because my thinking has changed) or I’ll confirm my position on some personal finance topics or specific investments.
You can check out my previous posts in this series here:
- I started writing about BCE stock and buying it in the early days of this blog – in 2010.
- I hinted that BCE stock was going to be a good long-term company to own when I considered some Canadian dividend stock selections were somewhat easy.
- Many years ago, after noticing this major telco (along with others like Telus and Rogers) make some serious money year-after-year, I decided to invest in this company.
- Based on the historical juicy dividends delivered by this company, I believed BCE along with our other major telecommunications stocks can make a great home in registered accounts (like TFSAs, RRSPs) because you can reinvest dividends tax-free or tax-deferred.
- I also believed this stock along with many other Canadian stocks are a solid, tax-efficient way to invest thanks to the Canadian Dividend Tax Credit.
- I bought BCE because it’s a core holding of most Canadian Exchange Traded Funds (ETFs) and big bank equity mutual funds. I figure if they own hundreds of thousands or millions or shares then maybe I should own some too!!
- I bought BCE because I wanted to participate in the capital growth and dividend raises it has historically delivered shareholders. I was banking on more dividend increases to come…
- At the time of this post, BCE is trading just above a 52-week low, around $58 per share.
- At the time of this post, BCE looks like a good buy/good price to buy more shares.
- Since I started investing in this stock, dividends have increased nicely – here is brief look at just the last few years.
Table thanks to BCE.
- As recently as this year, I bought some more BCE stock inside my TFSA. BCE stock is now DRIPping along for us – two (2) shares are reinvested every quarter inside this account for more growth.
BCE growth chart thanks to TMX.
Long-term, I believe BCE stock will provide us with both higher dividend income and capital appreciation. Thanks to being a patient shareholder the tax-free monies earned inside our TFSA and inside other accounts, from BCE stock alone, are almost enough to pay for our cell phone bills – for an entire year.
BCE is yielding close to 5% now and they continue have a whack of free cash flow. That means, over the next few years dividends should continue to rise and rising dividends – as you know – help drive our portfolio. Long BCE.
What do you think about my BCE purchase to buy and hold? What telcos do you own? Or, do you own telcos indirectly via a Canadian ETF?
I am a relatively new follower but I do like your philosophy (I’ve been at it a bit longer than you ).
My question is……do you ever write covered call options to boost your returns?
Great question Grant. Actually, I do not. I feel a buy and hold strategy works best for me. I’ve learned over time anything more than boring tends to go against the retail investor.
Mark, yes I own BCE. I am considering adding to my position, now that the price has declined.
Yup. Seems bond yields are playing with the telco prices of late.
I recently added BCE too. I think higher interest is not the only reason why BCE is close to 52 week low. telus did not go down that much like BCE. Not sure it’s a good decision or not.
Ya, I’m not worried. Unless they reduce their dividend. Why worry?
What is the official assessment as to why BCE is currently at a 52 week low?
I assume this is because interest rates are going up and telcos, like utilities, have debt to service related to their infrastructure. Otherwise, I don’t really know. Then again, lower prices and increasing dividends are a good thing 🙂
Do you own BCE Helen?
BCE continues to be a plumbing company. They own CTV and other entertainment aspects, but essentially they are not unlike Bell was in the 60’s, making money off plumbing (i.e. connectivity, physical networks, etc.,), but can they sustain their income streams? The CRTC protects their major income streams, but can you get rich supplying Canadians basic connectivity services (my opinion is NO). I own BCE shares, and I have for a while, but I continue to keep thinking BCE is how far from a problem?
They made a fortune selling Nortel out from itself, which was a great decision, but are there any other time bombs like that inside of them? Will CTV and their media holdings pan out?
Good to hear from you BCM.
If I knew what the future holds – I wouldn’t need to predict the future 🙂 I think BCE will continue to make money in the years ahead. Folks also doubted that in the 80s and 90s.
Agreed, I have predicted 7 out of the last 2 stock market corrections, but I just keep getting this nagging feeling that companies like BCE, Rogers and Telus are really only in existence because the CRTC is holding back the US service providers. Same can be said for the Banks I suppose. Given the current US xenophobia I guess they are safe (for now)?
I would think they are safe. The way I see it, until all the big bank funds, ETFs, pension funds stop owning CDN banks and telcos like BCE, then I won’t worry about it. BCE, RCI.B are both in the top-30 of CDN indexed funds by the way.
We’ve got BCE and it makes up about 2.5% of the total household portfolio. I can’t recall off the top of my head when we first obtained it but I do remember Bell Aliant having something to do with it along the way all as well. Also, when BCE bought out MTS, it gave me a little bit of satisfaction that our communication expenses are now part of the dividend we get.
I’m the same Lloyd. I figure as long as I own some BCE and/or some Telus and/or some Rogers I too get some satisfaction that our cell phone and internet bills will eventually be paid for via dividend income from those companies alone. Cheers.
We also own a large number of BCE shares and don’t forget that they have been paying a dividend for over 100 years (possibly a blip back in 2008 when one of the Pension Funds tried to buy it).
Yes. I recall their stats on their investor relations website only go back to the early 80s though.
BCE is our largest holding so I hope you are right Mark. We’ve invested in their company since the early 80’s and have benefitted greatly over that time.
Since the early 80s? No doubt and I hope I am right!
Yes. By the time our two children where ready to buy their first house they had enough for their down payment.
Geez, that’s very good!