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BCE Inc BCE

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Solid First Quarter for BCE Across the Board, With a Future That Looks Even Brighter

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

Like the other major Canadian wireless providers, BCE’s business has been severely hampered by the pandemic and lockdowns. But BCE has gradually improved in mitigating the disruption--posting sales and EBITDA growth for the first time since the pandemic began during the first quarter, exceeding Visible Alpha estimates. BCE is now on the verge of a significant pick up in results, in our opinion, as normalcy returns. We like BCE’s strategy and expect strength in all its segments in the near future. We don’t plan to materially raise our CAD 65 fair value estimate, but the stock remains the most attractive of the Canadian telecom companies we cover, in our view.

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Company Profile

Business Description

BCE is both a wireless and Internet service provider, offering wireless, broadband, television, and landline phone services in Canada. It is one of the big three national wireless carriers, with its roughly 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. In 2020, the wireline segment accounted for 55% of total EBITDA, while wireless composed 38%, and media provided the remainder.

Contact
1 Carrefour Alexander-Graham-Bell, Building A, 7th Floor
Verdun, QC, H3E 3B3, Canada
T +1 800 339-6353
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type —
Employees 50,704

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