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BCE Inc BCE

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Stock XTSE Rating as of
CAD 44.66 +0.43 (0.97%)
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As of Delayed Price Closed
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Company Report

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Rogers, Telus, and BCE: The Selloff is Overdone; We Favor Rogers, but All Three Look Like Bargains

Matthew Dolgin

The Big Three Canadian telecom firms have all sold off substantially over the past month after members of Parliament summoned the three CEOs to testify before a House of Commons committee. The CEOs were grilled on March 18 and the MPs have not yet taken action. While vilifying telecom firms is popular, and consumers undoubtedly desire lower prices, we don’t expect major regulatory changes. We’re maintaining our fair value estimates of CAD 78 for Rogers, CAD 33 for Telus, and CAD 60 for BCE.

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Price vs Fair Value

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BCE is trading within a range we consider fairly valued.
Price
CAD 44.66
Fair Value
CAD 14.00
Uncertainty
Low
1-Star Price
CAD 12.00
5-Star Price
CAD 45.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The immense network improvement resulting from BCE's fiber-to-the-home buildout will lead to further wireline share gains and margin improvement.

Bears

A combined Quebecor and Freedom Mobile should make for a strong fourth national wireless competitor, and it will likely undercut the Big Three on price, limiting pricing power and pressuring margins.

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Is it the right time to buy, sell, or hold?
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Trading Information

Previous Close Price
CAD 44.23
Day Range
CAD 44.25–45.00
52-Week Range
CAD 43.96–65.66
Bid/Ask
CAD 44.58 / CAD 44.70
Market Cap
CAD 40.74 Bil
Volume/Avg
3.7 Mil / 3.3 Mil

Key Statistics

Price/Earnings (Normalized)
13.97
Price/Sales
1.66
Dividend Yield (Trailing)
8.70%
Dividend Yield (Forward)
8.90%
Total Yield
8.70%

Company Profile

BCE provides wireless, broadband, television, and landline phone services in Canada. It is one of the big three national wireless carriers, with over 10 million customers constituting about 30% of the market. It is also the ILEC (incumbent local exchange carrier—the legacy telephone provider) throughout much of the eastern half of Canada, including in the most populous Canadian provinces: Ontario and Quebec. Additionally, BCE has a media segment, which holds television, radio, and digital media assets. BCE licenses the Canadian rights to movie channels including HBO, Showtime, and Starz.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Value
Total Number of Employees
45,132
Website
https://www.bce.ca

Competitors

Valuation

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Metric
BCE
QBR.B
T
Price/Earnings (Normalized)
 13.9710.4921.95
Price/Book Value
 2.474.012.02
Price/Sales
 1.661.301.61
Price/Cash Flow
 5.054.516.69
Price/Earnings
BCE
QBR.B
T

Financial Strength

Metric
BCE
QBR.B
T
Quick Ratio
 0.520.410.54
Current Ratio
 0.650.660.67
Interest Coverage
 3.133.171.82
Quick Ratio
BCE
QBR.B
T

Profitability

Metric
BCE
QBR.B
T
Return on Assets (Normalized)
 4.16%5.79%2.47%
Return on Equity (Normalized)
 16.71%44.26%8.37%
Return on Invested Capital (Normalized)
 6.90%10.47%5.34%
Return on Assets
BCE
QBR.B
T
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Telecom Services Industry Comparables

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Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
TMUS
T-Mobile US IncGsfscrzztNhskks$189.7 Bil
VZ
Verizon Communications IncNyxpbvrsBrtbwf$170.6 Bil
CMCSA
Comcast Corp Class ALjksmznyTmh$156.6 Bil
T
AT&T IncXyjzWtpnqj$116.5 Bil
DTEGY
Deutsche Telekom AG ADRByqyrmcvgMrnfzw$112.0 Bil
KDDIY
KDDI Corp ADRFbhcsqrgmDxcbxm$58.1 Bil
AMX
America Movil SAB de CV ADR - Series BCjffpynkmVqgwl$56.2 Bil
CHTR
Charter Communications Inc Class ADxjjjqrjDcjmm$37.1 Bil
BCE
BCE IncJhbcptpbpLdpqwv$30.1 Bil
ORAN
Orange SA ADRKfqylwkxPxcs$29.8 Bil

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