BCE: Blue-Chip, High-Yield Telecommunications Leader

When investors think of high-quality dividend stocks in the telecommunications sector, the first two businesses that come to mind are likely AT&T (T) and Verizon Communications (VZ).

However, there are plenty of other attractive investment opportunities in this sector.

Surprisingly, the Canadian telecommunications industry is a fantastic source of high yield dividend stocks.

BCE Inc. (BCE) – or Bell, for short – stands out as the undisputed leader in the Canadian telecommunications industry.

This blue chip stock is held in the portfolio of many self-directed Canadian investors. If you’re looking for information on additional blue chip stocks, the Blue Chip Stocks Excel Sheet contains pertinent investment information on all stocks in the Sure Dividend database with 100+ year operating histories and 3%+ dividend yields (including BCE).

Bell’s high dividend yield of 5.0% also stands out to income investors. Dividend yields of this magnitude are quite rare in today’s stock market. The High Dividend Stocks Excel Sheet contains a comprehensive list of all companies with 5%+ dividend yields, of which there are only 405 (including BCE).

BCE’s status as one of Canada’s most well-known blue chip stocks combined with its exceptionally high dividend yield help it to stand out to income investors.

This article will investigate the investment prospects of BCE in detail.

Business Overview

BCE is Canada’s largest telecommunications conglomerate with a market capitalization of US$ 40 billion.

The company is listed on both the Toronto Stock Exchange and the New York Stock Exchange under the ticker BCE. United States investors can purchase the company on the NYSE subject to a 15% dividend withholding tax, which is waived in retirement accounts thanks to a tax treaty between the two countries.

BCE stands for Bell Canada Enterprises. Unsurprisingly, it can trace its roots to the Bell system pioneered by the inventor of the telephone, Alexandar Graham Bell. Until 1975, AT&T had a significant stake in BCE (then called Bell Canada).

Today, Bell operates in three segments:

Each segment’s contribution to 1Q2017’s revenues can be seen below.

Source: BCE Inc. First Quarter Earnings Fact Sheet

BCE operates in the Canadian telecommunications oligopoly. Its major competitors are TELUS (TU) and Rogers (RCI).