A quick update on a couple of recent purchases in my portfolio. For this round, I added to existing positions.
- First purchase: I added 60 shares of BCE Inc (BCE.TO) @ $53.40. I’ve had my eye on the telecom sector for a while and after a lot of lowball offers that did not get executed, I decided to up my offer a bit and finally got filled. BCE owns interests not only in the telecom, but expanding heavily into the media & content business. With the stock yielding 5.6%, the purchase adds a nice $181.20 in forward annual dividends.
- Second purchase: I added 2000 shares in Auxly Cannabis (XLY.V) @ $1.07. The company has recently undergone some transition and changed name from Cannabis Wheaton Income (CBW) to Auxly Cannabis. Auxly remains a great financier in the field of cannabis and has a great leadership team with Chuck Rifici as CEO. A sector in its infancy, there is immense chatter about buyout and large investment targets, esp with the large alcohol companies targeting Canadian LPs for marijuana-flavored drinks. I am a little disappointed with the price I paid since I was looking to add at $0.75, but my trade didnt get executed (missed it by $0.01), and the following day the stock rallied massively. Still think its a decent price and my ACB remains well under $1.
Full Disclosure: Long BCE.TO, XLY.V. Our full list of holdings is available here.
BCE Inc (BCE.TO) announced a 5.0% increase in its cash dividend. The quarterly cash dividend will increase from C$0.65 to C$0.6825 per share and payable on Apr 15, 2016 to shareholders on record as of Mar 15, 2016.
BCE Inc is a Dividend Challenger and this is the 8th consecutive annual dividend increase. The annual dividend rate goes up from C$2.60 to C$2.73. Yield going forward based on today’s closing price is 4.75%.
BCE maintains the dividend payout ratio within its target policy range of 65% to 75% of free cash flow. The higher dividend for 2016 is fully supported by higher expected free cash flow generation driven by continued execution of Bell’s 6 Strategic Imperatives and growing financial contributions from all Bell business segments. Including today’s dividend increase announcement, BCE has increased its annual common share dividend 12 times in the past 7 years, representing an 87% increase.
Our portfolio consists of 40 shares of BCE Inc, which increases our annual dividend from C$104 to C$109.20, an increase of $5.20.
From the earnings release statement:
- Net earnings attributable to common shareholders of $542 million, up 9.5%; Adjusted net earnings grow 13% to $610 million; Adjusted EPS of $0.72, up 2.9%
- 10.6% higher Bell Wireless Adjusted EBITDA driven by accelerated revenue growth of 9.6% on 5.5% increase in blended ARPU
- Total BCE wireless postpaid net customer activations in Q4 of 118,120
- Second consecutive quarter of positive Bell Wireline Adjusted EBITDA growth, up 2.0%
- Activated 76,074 net new BCE IPTV customers and 52,010 net new BCE Internet customers as IPTV fibre footprint expanded to more than 6 million customer locations
- Free cash flow grows 23.6% to $833 million; full-year 2014 free cash flow up 6.7%
- Bell Media maintains leading TV audience levels and ratings as TSN and RDS affirm their position as Canada’s top specialty channels
- 2015 outlook builds on positive operating momentum and execution of Strategic Imperatives, supporting dividend increase and significant capital investment
“Financially, we enjoyed a successful 2014, comfortably achieving all our financial guidance targets for the year. Our consistent performance delivery, year after year, shows the strength of the business model Bell has built around our 6 Strategic Imperatives. While the communications industry is marked by intense competition and dynamic change, we have leveraged our business model to produce results consistently at or above expectations,” said Siim Vanaselja, Chief Financial Officer for BCE and Bell Canada. “Going into 2015, BCE’s operating momentum and financial foundation is strong. Our financial targets for this year reflect our expectation for continued strong Wireless segment profitability, positive growth in Wireline segment performance, as well as healthy earnings and free cash flow growth from operations to support our substantial capital investment in strategic network infrastructure and a higher BCE common share dividend for 2015.”
My portfolio consists of 40 shares of BCE, which increases my annual dividends from $98.80 to $104.00, an increase of $5.20.
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.