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  5. BCE: Can you explain your reasons for keeping BCE in the income portfolio? [BCE Inc.]
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Q: Can you explain your reasons for keeping BCE in the income portfolio?

Thanks
Asked by Stephen on February 13, 2025
5i Research Answer:

While BCE has been declining over the past year, and is now likely becoming a value trap name, it pays a yield of 11.9%, which helps improve the overall yield in the income model portfolio. With forward sales and earnings expected to be fairly muted, we feel that its dividends can be well-covered by its free cash flows, and any marginal improvement in profit margins could be a major positive shock to the market. Certainly, the momentum is not great, but it operates in an oligopoly and we think a lot of bad news has been priced in already.

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