Q: I have decided to buy a large position in BCE
after x div date Dec 15th. Technically it shows no signs of recovery yet.
I belive its pays a higher divident and has as much upside potential as Aqn,Spb and Pgi.un which I will sell.
On the negative side, my fear is that companies like Att ,Vodaphone and Telephonica have been a loosing investment for 20 years.
What are your comments.
Thank you,
Joe
after x div date Dec 15th. Technically it shows no signs of recovery yet.
I belive its pays a higher divident and has as much upside potential as Aqn,Spb and Pgi.un which I will sell.
On the negative side, my fear is that companies like Att ,Vodaphone and Telephonica have been a loosing investment for 20 years.
What are your comments.
Thank you,
Joe
5i Research Answer:
Portfolio allocation is a personal decision, after all, but we think trying to play around with the turnaround situation is largely a coin-flip, and the timing of the recovery is highly uncertain. BCE could recover eventually if the company can manage to integrate acquisitions, improve organic growth, reduce capex and debt, etc. But it could take years for investors to see the light at the end of the tunnel. The high-dividend yield has often been a classic value trap for names like these. We think BCE might be OK over the long-term, but investors will likely need a lot of patience.