Would you tell me the intrinsic value of BCE?
Surely, $30 is undervaluing the company by a lot?
I know 5i looks for growth stocks, but I would like to know if BCE would serve
as solid dividend paying business, with a good chance for share price increase.
Basically, if 5i were to issue a report on BCE, what would be the letter grade you would give it?
A rating would likely be in the B- range, with an 'own for income' type of view. In our view, BCE has sort of fumbled the ball while being in a position of a near oligopoly type of industry which are some missteps that should not be ignored from an investors point of view. Now they have painted themselves into a bit of a tough corner between debt and the dividend as teh Canadian economy slows alongside population growth likely to slow down.
With that said, sentiment is pretty horrible on the name right now and a few steps by the company in the right direction could probably get shares moving again, they just haven't seemed too willing to make those hard decisions. So overall, long-term, BCE will probably do fine from these levels but we also think there are a lot of other companies out there with far less issues and better growth prospects at the industry and company level.