Q: Why has the stock price of this blue chip company been beaten down so low.
Is the dividend secure? Such a high dividend yield is a red flag, no?
Is the dividend secure? Such a high dividend yield is a red flag, no?
5i Research Answer:
Certainly investors are concerned about the dividend. BCE has already indicated its dividend growth rate will slow. It is a high capital intensity business, and competition has increased. BCE has had a fairly bloated cost structure and earnings growth has not been impressive. It is taking steps to reduce costs. High interest rates have not helped sentiment towards the stock, either. We have dozens of comments posted on this one. But when 'everyone' is concerned, sometimes opportunities present themselves. We do not believe the dividend is going to be cut in the near term.