Bce – Your the stock for me!
Bce – Your the stock for me!
It’s that time again. Time for our monthly stock buy. Last week I posted our watch list for the month of May. I wanted to focus on increasing a position in one of our 4 lowest sectors. The main stocks I was debating were Telus, bce, Nutrien and 3m.
Nutrien continued to drop in price and honestly it seems like a great buy at the moment, but this month we decided to throw some money into the kids RESP account. (I really want to keep that account to less volatile stocks.)
So far in 2019 we have only contributed $800 to it and to max it for the year we still have $4200 to contribute. (We have 2 kids) Maxing out the RESP account each year is a no brainier to us, as the government will match 20% of up to 2,500 per kid a year. So a $5,000 contribution will grant us a extra 1 thousand to work with.
We have maxed this each year so far, and the compounding for the next 15-20 years will leave them with a huge nest egg for school.
Considering we wanted to work on our kids RESP account also eliminated 3m from the equation as well, since we want to keep those contributions to Canadian stocks. So unless things change I guarantee you 3m will be on our watch list next month!
So it came down to Telus vs Bce
I’m a huge fan of telus but we already own them in our tfsa. Do we really want to overlap the portfolio with the same holding in 2 different accounts? Ultimately I don’t. There is only one stock that I allow that for. One of my favorite stocks, and also my largest holding – Enbridge.
I guess it was obvious than, Bce it is.
I know Bell is one of the favorite’s out there for Canadian Dividend Growth Investors. Many fellow blogger’s share their dividend income’s and Bell tends to be a top one in some of them.
My previous article got some nice discussion on twitter, here and seeking alpha. Ricardo over at Seeking, made some great points about Bell, especially how they always tend to offer a 1% higher dividend yield than telus. (Bell actually makes up 40% of his portfolio – that must be a monster payment!)
At the beginning of the month I saw Roadmap2Retire made a nice purchase of Bell at just north of 58 bucks and then the other day Stan Wong recommended it as a buy on stockchase.
This definitely helped with the purchase. I don’t like to buy stocks near their highs, but most of the telecom’s tend to be high at the moment. (AT&T are an exception because of their massive amount of debt)
We are in a low interest environment and I don’t see that changing much in the next couple years. Also I like this space as a hedge against a recession because everyone will keep their cellphones, it’s essentially a utility these days.
There is a couple things I’m not a huge fan of with Bell, mainly their customer service. They don’t have the greatest reputation in this regard. (this is where telus shines) I really hope they put a higher focus on this.
A lower dividend growth rate than telus. Generally they raise their dividend by 5% a year, where telus is targeting a 7-10% growth rate until 2022.
Bell Media. This can be both good and bad. Will we see a end to cable? I dunno, but personally I cut it awhile ago. Got one of these hd antennas, we watch a lot of youtube and have a netflix subscription. With Disney about to start their streaming service, we could see even more people cutting the cord.
Of course the company has a lot going for it as well. They have been around a long time! As I stated before they seem to be a staple with the Canadian dividend investors.
A 5% dividend growth rate on a yield over 5% isn’t bad at all. That beats out my previous shaw position which offered a 4.5% yield with no dividend growth at the moment.
Bell Fibe. Bell has been investing a lot to improve their infrastructure and they will have some of the fastest internet available. This will surely pay dividends in the future.
The whole package – Cellphones, Internet, Home Phones, Cable, Alarm systems. BCE offer’s everything and can bundle it for you, for a discount. Its nice to deal with one company for everything and save a couple bucks for doing so!
Clearly Bell is one of Canada’s top (if not is the top) Telecom’s out there.
Thursday we decided to make the purchase and bought 18 shares for $60.96 per share. Definitely not a steal of a deal but it’s a stock that we will be slowly working on our position by dollar cost averaging in. At the time Bell offered a solid yield of 5.2% and this purchase will add $57.06 to our forward income.
Well that summarizes our newest position to our dividend portfolio. BCE is a solid blue chip stock, that should continue to do well in the future. I feel its a great addition to our RESP and compliments the other holdings nicely. CNR, Canadian Utilities, Enbridge and Interpipeline. Now to add to this position to enable the drip effect to take place.
What are your thoughts? Any stocks you have been purchasing lately?
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.
Nice job grabbing the big telecom and adding quite a bit of forward yield to the portfolio! For AT&T – wild at how high the yield is… scary, in a way.
Thanks man! Yeah at & t is kinda nuts. Id prefer verizon if i had to choose us companies.
Passive Canadian Income,
With this transaction, you also become a part owner of a few NHL teams. The Montreal Canadiens and your beloved Toronto Maple Leafs. I believe Bell owns 18% of the Canadiens. I believe they own 37.5% of Maple Leafs Sports Entertainment, which is the parent company of the Maple Leafs.
BCE pays a good yield to start. My position in BCE has been good for me for past several years.
This stock will make you sleep easier at night.
haha love it pursuit
I knew they owned some mlse but had no clue on percentages and failed to mention it.
Thanks for pointing that out. Owning part of the maple leafs, thats just awesome!
Nice pickup and purchase Rob. I enjoyed reading your thought process and love the income you actually added.
Hey Rob, definitely a great stock that I will eventually own as well. Telcos will do good because of the growing demand for wireless data. All those heavy apps and youtube views require lots of data. Ten years ago most people just used wifi for their cellphones, but now most have data because they need it for gps, emails, and apps. Also, the introduction of uber, uber eats, lyft and many other various gig apps, have sparked big demand for data plans. So our telcos are positioned to reap the reward for decades to come. Great pick!
So true. I know both me and my wife had to add more data to our plans over the years.
Got to love the telecos!
Same here! I used only wifi for many years, and now have a data plan. It’s so much efficient when going out. I can compare prices online, read product reviews directly from the store before buying something, check the traffic report and do video calling. Internet on the go is very helpful.
I have both and love TELUS dividends!!
hey Jo welcome!
Bell is a new one for me, but telus has always treated us good! haha
You’re the stock for me-typo
Ahh your right, thanks for the correction!