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BCE Inc BCE

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Stock XTSE Rating as of
CAD 45.76 −0.12 (0.26%)
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BCE: Competition and a Weight From Legacy Products Should Mute Long-Term Growth Ability

Matthew Dolgin

BCE has been investing heavily over the past several years to upgrade its wireline network with fiber. In the time since, the firm has been outperforming competitors in adding new broadband subscribers. We expect the firm to continue taking share, but we expect the pace to ease, as the firm has slowed its fiber network buildout in response to regulatory mandates that it share the fiber network. BCE also remains a leader in providing wireless service throughout Canada and has a formidable media business.

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Price vs Fair Value

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BCE is trading at a 835% premium.
Price
CAD 45.76
Fair Value
CAD 73.00
Uncertainty
Low
1-Star Price
CAD 99.00
5-Star Price
CAD 88.00
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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Trading Information

Previous Close Price
CAD 45.88
Day Range
CAD 45.60–46.05
52-Week Range
CAD 42.58–56.13
Bid/Ask
CAD 45.70 / CAD 45.86
Market Cap
CAD 41.75 Bil
Volume/Avg
2.0 Mil / 2.9 Mil

Key Statistics

Price/Earnings (Normalized)
14.91
Price/Sales
1.70
Dividend Yield (Trailing)
8.65%
Dividend Yield (Forward)
8.72%
Total Yield
8.65%

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
RCI
QBR.B
Price/Earnings (Normalized)
 14.9111.3310.49
Price/Book Value
 2.592.683.91
Price/Sales
 1.701.381.47
Price/Cash Flow
 5.444.414.97
Price/Earnings
BCE
RCI
QBR.B

Financial Strength

Metric
BCE
RCI
QBR.B
Quick Ratio
 0.510.500.67
Current Ratio
 0.650.651.01
Interest Coverage
 2.761.643.34
Quick Ratio
BCE
RCI
QBR.B

Profitability

Metric
BCE
RCI
QBR.B
Return on Assets (Normalized)
 3.90%3.54%6.07%
Return on Equity (Normalized)
 16.71%22.81%43.39%
Return on Invested Capital (Normalized)
 6.74%6.69%10.66%
Return on Assets
BCE
RCI
QBR.B

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Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
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LjmmLnkmfk$157.1 Bil
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 KDDI Corp ADR
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WwvnngnmyXscjv$30.8 Bil
 Orange SA ADR
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