One of the companies I have been thinking about writing an article about recently is BCE Inc. which owns Bell Mobility among other things. BCE is one of Canada’s largest corporations and owns a large variety of entities within their corporation including part of the Toronto Maple Leafs and Montreal Canadiens. Bell as we know it today was founded in 1983 when Bell Canada, Northern Telecom, and other related companies were merged into subsidiaries of Bell Canada Enterprises Inc. (now just BCE Inc.). Their headquarters are in Montreal Quebec. The largest competitors of BCE Inc. are Rogers, Shaw, TELUS, and Quebecor (Videotron).
The main retail brands owned by bell are: Bell- Canada’s broadband leader providing advanced wireless, internet, TV, smart home, and business services over their LTE and fibre networks.
Bell Aliant- Atlantic Canada’s leading name in residential internet, TV, and home phone services.
Bell Media- Canada’s leading content creation company with assets in television, radio, out-of-home advertising and digital media.
Bell MTS- Manitoba’s top name in home and business communications.
Lucky Mobile- Bell’s low cost prepaid wireless brand.
NorthwesTel- Leading investor in communications infrastructure in Canada’s North providing internet phone and TV services over a vast territory.
The Source- Canada’s largest tech retailer.
Virgin Mobile- National provider of pre and post paid wireless services with award winning customer service and innovative member benefits.
Obviously I won’t go through absolutely everything that Bell owns because there is a lot. They own parts of several sports teams, Crave TV, many regular cable TV channels (35) as well as the service itself, home internet, phone services (cell and landline), many (109) radio stations and news outlets (Astral media), these include the bear and virgin radio if you live in Edmonton or have them on an app, as well as BNN Bloomberg 1410. Basically Bell has their hands in anything media related. The most recent number I could find for how many people Bell employs was for 2019 and at that time they employed 52,100 employees. This compares to 65,600 in 2019 for TELUS. All this really tells you is that these 2 companies employ a lot of Canadians overall. Bell is almost twice the size of TELUS so this tells you either TELUS has a lot more inefficient structure or the businesses that they are in that don’t compete with each other require a very different amount of employees.
To get a general feel of just how big Bell is their market cap of $47.87Billion is almost double TELUS and Rogers market caps at $29.71 Billion and $29.81 Billion respectively. One advantage of their huge size is that they have significant ability to give back to the community. They have already given over $108 Million towards Bell let’s talk day and have pledged to donate another $150 Million over the next 5 years. They also invested 4 Billion dollars in 2019 in advanced networks and services to bring world class and wireless connections to more Canadians (and make money obviously). This is over 1 Billion dollars more than TELUS’s capital expenditures for the year (2.91 Billion). Bell had a Dividend payout ratio of 74% for 2019 while TELUS had a payout ratio of 78%(You will find payout ratios vary depending on where you look them up and how up to date they are so be aware of that).
One really nice thing that Bell does if you participate in their dividend reinvestment plan is that they will allow you to buy fractional shares as well. This is really nice if you don’t receive enough in dividends to buy full shares then you can actually get dividends on those fractional shares rather than having that money sit there and do nothing. As far as I can tell this is something you cannot do with TELUS’s reinvestment plan. Both Bell and Telus have very attractive dividend payouts right now with Bell sitting at 6.29% and TELUS at 5%.
The way things currently stand with Covid and the current economy I believe Bell is a good buy right now. They have been relatively beat down by Corona so far and have not seemed to really recover yet. Revenue dropped by only 2.6% last quarter compared to the same quarter in 2019, but net earnings dropped by 20%. To me this just means that they are spending a lot of money on Corona related safety right now and those profits will come right back as we eventually recover from Covid (how long that will take who really knows?). This compares to TELUS whose Revenue increased 7.7% from 3rd quarter 2019 but who’s net earnings dropped 29% compared to Bells 20%. Their current P/E ratio is right around 19 same as TELUS, but their P/E Forward is expected to go down while TELUS is expected to go up slightly. Bell has a very attractive dividend right now at 6.29%, which is almost the same return the bank gets when you leave money on a line of credit. Their share price is relatively low at $52.93 (Cheaper than I’ve ever managed to buy it at so far), and people aren’t overly keen to give up their internet, phone or TV while they are stuck at home during a pandemic.
Anyways here are the stock numbers of Bell and Telus:
BCE Inc.- Share Price $52.93/ Market Cap $47.87 Billion/ 52 Week Range $46.03-$65.28/ P/E 19.55/ P/E FWD 17.70/ Dividend $3.33/ Dividend Yield 6.29%/ EPS $2.707
Telus- Share Price $23.32/ Market Cap $29.81 Billion/ 52 Week Range $18.55-$27.74/ P/E 19.93/ P/E FWD 20.00/ Dividend $1.165/ Yield 5.00%/ EPS $1.17
Disclaimer: All share prices are as of Nov 8, 2020. Stock number are from Webull