In general, Canadian telecom players continue to be a top pick of mine for dividend investors right now. In particular, I think BCE Inc. (TSX:BCE)(NYSE:BCE) could be one of the best income-generating stocks on the TSX right now.
BCE has a yield of approximately 3.3% at the time of writing. This is not a yield that investors will jump up and down about, but is one of the safest and most defensive yields long-term investors could hope for. BCE has consistently grown its dividend in recent years, and I think the company’s valuation and relatively low-yield reflects the margin of safety investors have priced into this high-quality company.
BCE recently announced a capital spending increase to around $4.7 billion this year, an increase of around $1 billion a year for the next two years. Most of this spending is directed toward the company’s 5G rollout, which continues to be a focal point for all telecom players in the race to provide the best 5G coverage for its customer base.
The company expects to double the size of its 5G wireless footprint in 2021, and hopes to be a leading player in this sector in the years to come.
Telecom players operate in capital-intensive, competitive market environments, and investors will be keeping an eye on how the company’s return on assets and return on invested capital metrics perform in the coming quarters. I think BCE is one of the best players in this sector in Canada, and expect this dividend player to perform well in the medium- to long-term.
Invest wisely, my friends.
