Q: Hi Peter and 5i Team,
It now seems certain that BCE will be forced to cut its dividend. Based on your experience, what is your "crystal-ball" prediction on the effect such a dividend cut would have on the share price?
Incidentally, as BCE shareholders in a RRIF, we recently voted against the CEO and every single board member. I suspect that the upcoming AGM will be a rather robust event, putting it mildly. For us, and so many other small retail investors, we had faith in this "dividend aristocrat" and "safe widows and orphans" stock. Thank goodness 5i always stresses diversification, but the almost 50% decline in SP for our BCE holding is hard to take.
Thanks in advance for answering this question, and for reading my "rant".
It now seems certain that BCE will be forced to cut its dividend. Based on your experience, what is your "crystal-ball" prediction on the effect such a dividend cut would have on the share price?
Incidentally, as BCE shareholders in a RRIF, we recently voted against the CEO and every single board member. I suspect that the upcoming AGM will be a rather robust event, putting it mildly. For us, and so many other small retail investors, we had faith in this "dividend aristocrat" and "safe widows and orphans" stock. Thank goodness 5i always stresses diversification, but the almost 50% decline in SP for our BCE holding is hard to take.
Thanks in advance for answering this question, and for reading my "rant".
5i Research Answer:
It has been a very rough ride for shareholders of a 'stable' stock. We think the market reaction to a cut would be positive, assuming it is about a 50% cut. We think less than that investors will continue to have many of the same worries. More than that we think might scare some investors and we might see a small sell off. Either way we doubt a sell off will be dramatic, at least after the first initial reaction. This has been discussed and worried about for more than a year now, and we think 'most' investors are prepared.