BCE Inc T.BCE

Great Discussion

[Experienced]

Hats off to those here who have provided their opinions and analysis for the benefit of all.  This is the true value of these Boards IMO.

I have been/was a long time holder of BCE through thick and thin over the years.  I sold off a significant portion of my stake a while ago in the mid 40s.  I recently sold the rest.  With some regret I might say. BCE is still on my Watch List and may well buy back in at some point.

So why did I sell?

Well two reasons actually..

1....the Telecom sector is facing greater competition in Canada (Canada is one of the most expensive jurisdictions in the world).  I switched from Rogers to Freedom for my phones since for the exact same price I got a lot more particularly as it related to long distance and especially when I travel I get free phone calls anywhere in that country and free calls back to Canada.  Neither Bell nor Rogers were willing to match that or I wouda stayed with them.  I looked at myself as a typical consumer trying get the best price for the services I needed.  On another front I was able to get the same internet from another provider for a third the cost of Bell.

2...following from Point 1 - when I look at the latest BCE financial report, I see that the company cannot meet its dividend obligations from its Free Cashflow  AND that is with a reduced capital spending plan (which was announced months ago).  This means that they don't have the money to pay the dividend.  I have seen this movie too many times over the decacdes that I have been investing where a company delays the inevitable and by doing so makes themselves a target for shorts and general negative market sentiment.  The longer managemnt waits to do what they have to do it the greater the decline in the SP.  That's just how it works, sadly.

Soooo..when I see that management finally bites the bullet on the dividend and has a concrete (and believable plan going forward) I will consider buying back in.

[Ocalaman]

You and millions others feel the same way ! Once they get serious about the hole they are  in investors will get serious about them. What has made my day  was not to have to give back 3 years of dividends in capital losses, but will still enjoy the benefits of years of nice dividends. After watching the Punch and Judy road show I could see they aren't yet serious about how much

[market2025]

did u say they dont have money to pay dividend..  ok clearly u dont account to add back D&A to net income.. have looked at their FCF.. 

[Experienced]

D&A are not cash items which can be used to pay out things like dividends. Free cashflow is an accepted measure of real money which can be used to pay obligations like dividends.

[market2025]

exactly.. when did u last saw bce net income was sufficent to cover divedends.. yet they kept increasing it... simple math is add D&A to net income.. u have 7 to 8 billion in hand .. enough to pay div and interest cost.. remb interest is already accounted for in net income.. this is very conservative rough numbers...  reason they halt div growth is they want to see if they need to throw

[Experienced]

market...valid point The thing is though that at some point you can't continue and with the growing debt the two things are working against each other.  It's kinda like the analogy a wise person told me when I was first starting out in the investment business...if you are in an elevator on the top floor of a skyscraper and the power fails...the ride down is fun until the elevator

[Toppicks1]

Wow that's a really enlighting explanation.. trading is not very complicated once you catch on.... if you have one going down sell it and buy one that's going up...... knife catchers I've never understood... that and price averaging down... sure add to your losing position.. buy the ones that are going up...