BCE Inc. (BCE.TO)

This company has done a bunch of things very right, but at the inception were considered very wrong. Their capital expenditure will continue to go down, and they don't have the risk profile of Telus (T-T). With their fibre business, they are miles ahead of any of the other telcos. This will slowly give you a good 6%-8% rate of return. Also, they’ve done some very good acquisitions.

It is a good name for a yield. It is a telecom and a utility and so is interest rate sensitive. As rates rise it will start to complete with bonds and preferred shares. Their earnings will continue to grow as will its dividend. It will do well on a relative basis if the market starts to weaken.

If you have a long-term view and want your dividends to grow, this is a company that is going to reward you slowly. The market is tending to favour growthier names, so funds are moving from this company and the telcos. If you see any downward opportunity, then buy it for sure.

Doesn't tend to be a super exciting stock, but the yield is fantastic. Has it in his portfolios to generate a steady cash flow and increases in the dividend over time. The dominant telco in Canada. They continue to show imagination in the things they do. This is a "buy and hold" situation.

There are some structural challenges in wire line telecoms, which historically get tied to interest rates. We have seen the secular long-term low in interest rates in June 2016, and we are unlikely to revisit them. Expect that rates move higher from here. This is not the #1 company he would choose in the group. Prefers Telus (T-T).

Bell, Telus (T-T) and Rogers (RCI.B-T) has 90% of the market share. Great margins for all of them. We are moving more towards a higher margin business of wireless, and away from a phone that you pick up and dial at home. He likes the space. It is a steady type of area, and you are getting a nice dividend. Dividend yield of 4.85%.

(A Top Pick March 28/17. Up 8%.) Has underperformed relative to the sector, but still likes it.

He is more bullish on this because the valuation relative to the sector is cheap. Over the next 2 to-3 years, this company is really going to outperform, and it’s all about the fibre to the home. They are going to hook up about 9 million homes, and are about a 3^rd to a half through. This has a tremendous amount of free cash flow yielding about 6%. Dividend yield of 4.6%. (Analysts’ price target is $62.)

Seasonally this usually does very well in the summer. Technically it is in a trading range, and there is no indication it is about to move above or below that trading range. If it moved above $63.50, that would be very bullish. Below $57 would be quite bearish.

Owns because of its steady growth in income. It steadily grows its dividend every year. It’s not exciting and you’re not going to get rich, but you are not going to get killed either. Like other utilities, it is very interest rate sensitive. If interest rates are going down, these types of stocks tend to do really well. It is a bond alternative. Should be a part of everybody’s portfolio. Dividend yield of 4.7%.

In Canada, more than half your total return comes from dividends. The government has been kind enough to give us a tax break on dividends. In this high tax era, we should take advantage. The company is growing their wireless business and we are all using more data all the time. We are going to be using a lot more data when we all have autonomous cars. Dividend yield of 4.7%. (Analysts’ price target is $62.)

She’s used both this and Telus (T-T) as income stocks. Both have an attractive yield, close to 4.5%-5%. They generate a lot of cash flow, so will typically increase their dividend at a modest pace each year. They’ve done relatively well. She doesn’t expect a lot of capital appreciation, maybe 5% from here at best, plus the yield. Uses these for defensive and income purposes.

Just reported yesterday, and beat on subscriber additions, on both wireless and wireline. This is a wireline company and they beat on that, partly due to Manitoba Telecom synergies. Thinks that is something that can continue, and is just in the early innings. He is only modelling a 2.5% EPS growth over the next couple of years, but not a bad valuation compared to its peers. Strong dividend and good dividend growth. You can buy more of this on a little bit of a pullback.

They had the best subscriber growth last quarter for 5 years. It is finally up a bit. It has been in danger of there not being much growth. They showed maybe that is wrong and we might see a little bit higher earnings.

Sell and move into AT&T (T-N)? Doesn't think this is fully priced. AT&T is a similar company, but trading at a much lower multiple. It has a nice dividend yield. Doesn't see a lot of top line growth coming into these companies. You continue to get a nice dividend, and maybe 2%-4% top line growth. Like BCE, they can probably continue to cut costs, grow their business, and give you a decent rate of return. Expects they will give you 8%-12% rates of return. AT&T's Dividend yield is 5.8%.