Monday, April 29, 2013

2013 Dividend Machine BCE - Canada's largest Communications Company

In 2013 I changed my dividend machine strategy.    I still use the same four criteria to screen for these stocks that I used in 2011 and 2012.   The difference is that in 2011 I picked one stock every week with no regard for anything other than the four criteria.   I did not try to diversify, I did not try to buy on dips, I did not select a stock that was trendy.     In 2012, I used that same technique, but I picked 48 stocks over the year instead of one per week.  My approach in 2013 has changed.

2013 Dividend Machine Strategy change:

You can see both income portfolios (see pages on 2011 DIVIDEND MACHINES and 2012 DIVIDEND MACHINES) and see that the technique created two successful portfolios.    The portfolios are diversified, their income is nearly four percent and growing and they each have capital gains.    In 2013, I am simply picking stocks as I find a stock that meets all four criteria and that I think is a good fit based on either industry or price for me instead of picking based on a schedule.

When I find a stock that I want to add to my holdings, I profile it in my 2013 DIVIDEND MACHINE list.  We will see over time if this more personal technique, which I think is more similar to how most investors buy stocks, beats the scheduled technique.

With that in mind, the next 2013 Dividend Machine is profiled below:

BCE Telecom
Price when profiled
Last 4 Qtrs Earnings
Last 4 Qtrs Dividends
Current Qtr Dividend
Annualized Div Yield
No. Years Div Increase
        since 2006
Debt/Equity ratio
BCE Company, symbol BCE 2013 Dividend Machine:

BCE Company is Canada’s largest communications company.   I like to own several companies in one arena.   I already own AT&T, it is an income investor’s dream, but with the stock price at or near highs and the challenges it faces, I have a stop on it.    I own two China telecoms and Vodafone so adding BCE is a good fit.

BCE Dividend Machine Fundamentals:

I remain committed to stocks that meet all four of my dividend machine criteria and BCE fills the bill.     Based on the closing price on 4/29/2013 of $46.20 the annualized dividend is $2.33 for a yield of 4.92%.    Earnings far exceed the dividend; their last four quarter earnings were $3.45.   Debt to equity ratio (D/E) is within industry standards at 1.15.  The table on the right clearly illustrates why BCE will be in my portfolio soon.

Income investors, if you want income to retire, consider BCE for your portfolio.