The two Canadian telecoms I want to look at today have put together a solid year on the back of wireless growth and an investing environment that has favoured wide-moat income-generating equities. Utilities, REITs, and telecoms have all thrived as bond yields have retreated and central banks have softened on rate policy.
That trend does not look like it will reverse in 2020. Quite the contrary, the Bank of Canada is expected to move forward on its own rate cut early next year.
BCE (TSX:BCE)(NYSE:BCE) stock has climbed 22% in 2019 as of close on November 25. The company reported record wireless net additions in the third quarter. Adjusted EBITDA increased 5.6% year-over-year and net earnings posted 6.3% growth. Cash flows from operating activities also rose 10.5% to $2.25 billion.
Shares of BCE still possess a price-to-earnings ratio of 18 but a high price-to-book value of 3.4. The stock offers a quarterly dividend of $0.7925 per share, representing a 5% yield.
Shares of Telus (TSX:T)(NYSE:TU) have climbed 13.8% in 2019. The stock has achieved average annual returns of 14% over the past 10 years, which is fantastic for a dividend payer of its calibre.
It also posted a strong third quarter with 13% growth in net wireless additions and consolidated EBITDA growth of 8.3%. Telus hiked its quarterly dividend to $0.5825 per share, which now represents a 4.6% yield. The stock also boasts a P/E ratio of 17 and a P/B value of 2.8, putting it in solid value territory.
