Bell Inc. is a telecommunications and media company headquartered in Verdun, Quebec, Canada. The company was previously known as Bell Canada Enterprise Inc. and was founded in 1983 after a corporate reorganisation that established a holding company to oversee dozens of other subsidiaries. But BCE traces its roots way back to 1880 when the works of famed inventor Alexander Bell led to the formation of The Bell Telephone Company of Canada Ltd via an Act of Parliament. Over the years, BCE has diversified and grown to become one of the most successful corporations in Canada.
BCE has a heavy presence in Canada and the US, where it operates in 3 business segments: Bell Wireless, Bell Wireline, and Bell Media. Its customers include individuals, businesses, and governments. With over 22 million customers, BCE is the leading telecommunications company in Canada, as of August 2021, where it enjoys informal oligopoly protection. The company is also an industry-leading provider of communication products and services. BCE is an active M&A player, having made strategic deals throughout its history that have helped it rise to the top. The company’s most expensive deal was the acquisition of Manitoba Telecom Services for $3.9 billion in 2016. BCE’s most expensive divestiture was the sale of Telesat Canada to PSP Investments for $2.6 billion in 2006.
BCE Inc. is listed on both the Toronto Stock Exchange and The New York Stock Exchange. Its stock trades under the ticker symbol BCE on both exchanges.
BCE Stock History
BCE has not had any stock split since the turn of the millennium, with the last one being a 2-for-1 implemented on the 23rd of May 1997. The stock benefitted from the tech boom at the turn of the millennium, managing to print its all-time high to date (August 2021) at just above $150 in March 2000. The stock then crashed to below $20 by May 2002 as tech stocks bled due to previous overvaluations.
The stock then embarked on a steady rally that saw it print a temporary top just above $40 by October 2007. The effects of the 2007/8 global financial crisis then weighed down on the stock, triggering a dip that printed a trough at around $17 by December 2008. The stock recovered again and has since 2013 held around the $50-handle.
BCE Inc. is a reliable dividend payer and has increased its payouts steadily in recent years. The company operates a stable business with guaranteed demand, making BCE a classic defensive stock that investors can hold for the long term as they collect periodic income in the form of dividends. (Not applicable to stock CFD trading)
How to Trade BCE Stock
BCE is one of the most followed Canadian stocks on Wall Street. Here are some of the factors to consider when trading it:
- Political and Legislative issues
Canada is one of the most expensive markets for telecommunication services. It is such that expensive rates became a huge topic during the 2019 political elections. Then, Canadian President, Justin Trudeau, has asked major telecoms (BCE included) to reduce their rates by at least 25% or face unspecified consequences. It is not beyond the Canadian government to turn these requests into legislation – a move that will significantly hurt the margins of BCE and pressure its stock lower.
- Competition and New Product Rollout
While BCE can be said to be an oligopoly, it faces tough competition from equally well-capitalised and dominant companies such as Rogers Communications Inc. and Telus Corp. that are able to invest heavily in research and development. In an industry characterised by fast innovation, a hit product from a competitor can really hurt the future prospects of BCE. Additionally, competition also comes from a smaller regional player who is now buoyed by positive regulation in the form of MVNO (Mobile Virtual Network Operator), a development that will allow them to leverage the technologies of the major companies and push for a slice of their cake.
- Negative PR
BCE has been widely criticised by customers for various controversies, such as bandwidth throttling, misleading advertisements, pricing, as well as censorship. In the age of social media, such news can easily raise concerns among investors who abhor negative headlines.
- Periodic Earnings
BCE Inc.’s fiscal year runs from January to December, and the company releases periodic earnings reports that update investors on the health of the business. The most important metrics to watch out for in BCE earnings reports include revenues, subscriber numbers, and debt levels. Positive numbers are good for the stock, whereas negative numbers inspire lower stock prices.
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