BCE has declared its eleventh dividend increase in the past six years, representing a 78-per-cent overall increase. With this increase, BCE maintains its dividend payout ratio within its target policy range of 65 to 75 per cent of free cash flow. It is one of the top Canadian dividend stocks.
BCE (TSX─BCE) managed to beat analysts’ expectations in its first quarter. The company’s earnings per share, or EPS, came in at $0.84, $0.05 ahead of the street estimate. Management has attributed the results to BCE’s strategy of investing in Canada’s leading networks, content and service. According to George Cope, President and CEO, Fibe TV’s ongoing positive momentum, growth at Mobility and Bell Media’s programming and ratings leadership all contributed to the company’s performance.
BCE Inc. is Canada’s largest communications company and ranks among the best Canadian stocks. It provides a comprehensive suite of broadband communications services to residential and business customers from Bell Canada and Bell Aliant. Its Bell Media segment is one of Canada’s top multimedia companies, with assets in television, radio, out-of-home and digital media, including the CTV network and specialty channels.
For the three months ended March 31, 2015, BCE made $705 million (adjusted), or $0.84 a share, compared with $626 million, or $0.81 a share, in the same period of 2013. Revenues rose 2.8 per cent to $5.2 billion, thanks to solid growth from the company’s Bell Wireless segment, and modest growth at Bell Wireline and Bell Media.
Wireless segment revenues rose 9.7 per cent to $1.6 billion, while wireline and media revenues increased 0.3 to $3.0 billion and 0.6 per cent to $726 million respectively.
BCE among best Canadian dividend stocks
During the quarter, management approved a 5.3 per cent, or $0.13 a share, increase in the annual common share dividend to $2.60 a share. That’s the eleventh increase in the past six years, representing a 78-per-cent overall increase. With this increase, BCE maintains its dividend payout ratio within its target policy range of 65 to 75 per cent of free cash flow and remains among the country’s highest paying dividend stocks.
BCE has confirmed the 2015 financial guidance targets that it provided earlier in the year. The company is on track to deliver revenue growth of one to three per cent for the year. And it’s also on track to deliver adjusted EPS in the $3.28 to $3.38 range. Its adjusted EPS for 2014 was $3.18.
Management expects higher, but slowing, wireless industry penetration and smartphone adoption, as well as a sustained level of wireline and wireless competition in both consumer and business markets. The media advertising market is expected to remain stable.
BCE should earn about $3.34 a share in 2015, and it trades around a reasonable 15.9 times that estimate. The current annual dividend of $2.60 a share yields 4.9 per cent. BCE is a buy for growth and income.
Money Reporter, MPL Communications Inc.
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