Would you have any insight to why BCE is struggling while markets seem to be bolstering with prospects of interest rate reductions next year? Paying a 7.0% dividend and last quarter report seemed positive, any detractors you are aware of beyond CRTC ruling on opening its fibre network while exempting BC?
Merry Xmas to all, Ted!
The primary reason BCE has struggled this year is due to weak earnings growth, higher interest rates and its high debt load. Although the interest rate outlook is positive for next year, BCE has over $34B in net debt so if rates are held at the current high levels for the next little while, this could continue to hurt BCE's earnings. We do think BCE has executed well in this challenging environment, and with rates set to pivot we think it will do better. As a regulated company there are always issues to deal with, but BCE has of course lots of experience adapting to regulatory issues. We consider the stock fine right now, primarily for income investors. We wrote a recent blog on BCE vs T:
https://www.5iresearch.ca/blog/this-or-that-telus-t-or-bce-bce