NOW That This IS OUT of the WAY__Bodes WELL for Share Price FORWARD
RICHARD DUFOUR
The Press
Quebec's largest institutional investor purchased more than $130 million worth of shares in the Montreal telecoms giant during the first three months of the year. During this same period, the 2.1 million Telus shares held by the Caisse were liquidated.
The Caisse purchased 2.9 million shares of BCE in the first quarter, according to a regulatory filing filed this week with American stock exchange authorities.
The stake in BCE is thus increased by 20%, to 17.4 million shares, as of the beginning of April. At the current stock price, this investment is worth more than $810 million and places CDPQ fourth among BCE shareholders.
The Caisse therefore continues to build its position in the stock since it purchased nearly two million BCE shares during the months of October, November and December.
BCE shares are down 10% since the start of the year and nearly 30% over the past year.
The dividend divides
While rising interest rates affect the cost of financing, the competitive environment in the Canadian telecommunications sector is putting pressure on margins.
And above all, investors seem to continue to worry about BCE's ability to cover its dividend without taking on debt. At 8.5%, BCE's dividend yield raises questions and appears to signal that there is a risk that management will be forced to readjust the dividend.
BCE announced in February a major restructuring including the elimination of 4,800 jobs and a smaller increase in the annual dividend than in recent years.
Only four out of twenty analysts providing official coverage of BCE are currently proposing to buy the stock.
In the regulatory document showing the shares listed on the United States stock exchange in its portfolio, the Caisse also reveals having lowered the size of its investment in Rogers by 25% during the first quarter of 2024. The Caisse thus began the month of April with 1.2 million shares of Rogers.
The management of the Caisse did not wish to comment on its investment decisions in the telecommunications industry, contenting itself with asserting that these transactions are part of “portfolio rebalancing exercises”.