Q: Both BCE and Telus are down significantly today on high volume and both have broken support levels. Is there any recent news to explain today's drops. Are their dividends safe
5i Research Answer:
The only 'real' news on BCE is that BCE's Bell Media division is considering an injunction against Rogers Warner Brothers Discovery content for two years. But this would not explain the drop. Investors continue to worry about growth and the dividend. On Telus, UBS previewed its Q2 and expressed concern about higher competition, and it expects low revenue growth (0.4%). It says TIXT will continued to be impacted by elongated sales cycles. We do not believe either dividend will be cut in the short term but of course no dividend is guaranteed, and business is certainly not great right now.