The dividend yield in Enbridge (ENB), a pipeline, BCE, and Telus (TU) are too high to ignore. Telus may break its downtrend after posting a non-GAAP EPS of 19 cents on $4.93B in revenue.
The Telus International (TIXT) unit previously warned it would post poor results. That accelerated the sell-off in TU stock. Fortunately, in Q2, Telus reported a 46,000 increase in customers Y/Y. Mobility added 110,000, its best Q2 since 2010.
The cost rationalization hurt its EBITDA. Expect earnings to improve from here.
BCE, the bigger telecom, posted revenue growing by 3.5% Y/Y to $6.07B. It activated 10.2% more internet accounts Y/Y. Bell Media’s digital revenue also performed well, up by 20%. Still, Bell Media’s total media revenue fell by 1.9% due to the ongoing advertising recession.
BCE has a high dividend that costs an over 100% payout ratio. This is due to its trailing capex and the required cost to build out the business.
Enbridge is very compelling. Shares offer yields at around 7%. Its dividend is safe since it paid and raised them for 26 years. S&P 500 rates it a BBB+.
Enbridge has high debt. EBITDA and DCF are good, which management uses to reward investors. However, the firm did not mention any debt reduction plans.
