Is this 8.7% Dividend-Yielding Stock the Best Deal for Income Investors?




If you’re looking for a top dividend stock to buy, one intriguing option today is BCE Inc (TSX:BCE)(NYSE:BCE). The Canadian telecom giant is an industry leader whose business is strong and resilient. Unfortunately, the stock has been struggling. Since the start of the year, shares of BCE have fallen by 12%.

The decline in price means that investors are getting a higher yield, which is now around 8.7%. While dividend yields that high may normally be concerning for investors, BCE has typically made for a safe dividend stock to own.

In February, the company released its year-end results for 2023 and also announced a 3.1% increase to its dividend. BCE noted that it achieved the guidance it set out for the year. Operating revenue of $24.7 billion was up by 2.1% and the company’s free cash flow of $3.1 billion also improved by 2.5%.

BCE has been doing well despite challenging macroeconomic conditions, including rising interest rates. And for 2024, it expects revenue growth of up to 4%.

Trading at just 15 times its estimated future profits, BCE’s stock provides investors with some great value. And with a high yield to go along with it, this has the potential to be an excellent dividend stock to load up on. BCE’s stock is trading near a 10-year low as rising interest rates have made dividend stocks less attractive to income investors who have pivoted to bonds.

But as interest rates come down, BCE is a stock which could quickly become a hot buy again.



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