STA Research rates BCE Inc.(BCE:TSX) with a Hold rating

STA Research
by: STA Research

STA Research rates BCE Inc.(BCE:TSX) with a Hold rating, and a 12 month target of $65 per share on the telecommunication’s giant stock price.

Based on the BCE Inc stock forecasts from 11 analysts, the average analyst target price for BCE Inc is CAD 59.03 over the next 12 months. BCE Inc’s average analyst rating is . Stock Target Advisor’s own stock analysis of BCE Inc is Bearish, which is based on 4 positive signals and 10 negative signals. At the last closing, BCE Inc’s stock price was CAD 70.35. BCE Inc’s stock price has changed by -0.80% over the past week, +3.69% over the past month and +24.56% over the last year.

BCE Inc. operates as a telecommunications and media company in Canada. The company offers wireless, wireline, Internet, and television (TV) services to residential, business, and wholesale customers. It operates through three segments: Bell Wireless, Bell Wireline, and Bell Media. The Bell Wireless segment provides wireless voice and data communication products and services, and consumer electronics products. The Bell Wireline segment offers data, including internet access and Internet protocol television (IPTV), local telephone, long distance, as well as other communication services and products. This segment also buys and sells local telephone, long distance, data, and other services from or to resellers and other carriers. The Bell Media segment provides conventional TV, specialty TV, pay TV, streaming services, digital media services, radio broadcasting services, and out-of-home (OOH) advertising services. It owns and operates 35 conventional TV stations; 27 specialty channels and four Pay TV services; four direct-to-consumer streaming services; 109 licensed radio stations; and websites. The company was formerly known as Bell Canada Enterprises Inc. BCE Inc. was incorporated in 1970 and is headquartered in Verdun, Canada. Address: Building A, Verdun, QC, Canada.

What we like:

Superior total returns

The stock has outperformed its sector peers on average annual total returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile.

Underpriced on cashflow basis

The stock is trading low compared to its peers on a price to cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

What we don’t like:

Low market capitalization

This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced compared to book value

The stock is trading high compared to its peers median on a price to book value basis.

Poor return on equity

The company management has delivered below median return on equity in the most recent 4 quarters compared to its peers.

Poor capital utilization

The company management has delivered below median return on invested capital in the most recent 4 quarters compared to its peers.

Poor return on assets

The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.

Highly leveraged

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Low Earnings Growth

This stock has shown below median earnings growth in the previous 5 years compared to its sector

Low Revenue Growth

This stock has shown below median revenue growth in the previous 5 years compared to its sector

 

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