BCE Inc – A Cash Flow Machine That Belongs In Your Portfolio


BCE Inc (BCE) is Canada’s largest communications company providing communication solutions to residential, business and wholesale customers under the Bell Canada and Bell Aliant brands. BCE Inc is a well-diversified communications and media giant in the Canadian economy, part of the S&P/TSX 60 index. The company has a long history of rewarding shareholders and is committed to a dividend growth model and has confirmed that they intend to payout 65%-75% of free cash flow. However, the current EPS payout ratio remains high at over 90%. BCE cut its dividends in 2008 and started growing them aggressively since. While the current 5-yr dividend growth rate stands at 26.1%, the growth in dividends is expected to slow down to more manageable levels. The company has been focusing on strategically growing the wireless and media business segments and recently took Bell Aliant private in a $3.95B deal, which gives them a solid foothold in the Atlantic provinces.

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4 thoughts on “BCE Inc – A Cash Flow Machine That Belongs In Your Portfolio

    • Thanks. Glad you liked the analysis, Henry. The dividend growth rate will slow for sure…it cannot continue as it has for the last five years. I think it’ll turn into more a AT&T style investment – high yield, low growth company. As for the growth of revenue itself, I am confident in the management. They are making the right investments and concentrating on growing their media and content business, while their traditional wireline business segment continues to falter. They are still the backbone of Canada’s communication industry and even the wireline industry will stop the deterioration after some point. We cannot move to a completely wireless world 🙂


    • Think of them as AT&T meets Time Warner. Well…a mini-time warner. The telecoms are saturated and looking for growth, they have started expanding into media business and recognized that it is an avenue for growth in the future.


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