Q: I know you have had mixed commentary on these two. Questions:
1. On BCE, do you think the dividend on common shares is "safe" (I own it for the dividend ... capital appreciation is less of a concern) Would I be better off simply selling my common BCE shares and buying some BCE preferred shares (and if so, which one). Or should I sell it and buy something else with more upside ?
2. SPB announced a major cut to their dividend this morning. And based on my reading, the latest quarter was less than staller. What are your thoughts on this one overall given this news?
I hate being reactionary but I'm down over 20% of both of these ....
1. On BCE, do you think the dividend on common shares is "safe" (I own it for the dividend ... capital appreciation is less of a concern) Would I be better off simply selling my common BCE shares and buying some BCE preferred shares (and if so, which one). Or should I sell it and buy something else with more upside ?
2. SPB announced a major cut to their dividend this morning. And based on my reading, the latest quarter was less than staller. What are your thoughts on this one overall given this news?
I hate being reactionary but I'm down over 20% of both of these ....
5i Research Answer:
We think BCE's dividend is 'secure', in that we do not expect it to cut. That being said, with today's lowered forecast and its earlier flip-flop on acquisitions, management has a credibility issue. Preferred shares are safer, but we might move to a different sector such as SLF with a nice dividend and more upside potential than preferreds would have (SLF up 19% YTD). We think BCE can be sold for tax losses if they apply, and can be re-considered at a later date.
We have comments posted now on SPB.