Bell Canada (BCE) Downgraded to “Sell” at Zacks Investment Research

Zacks Investment Research lowered shares of Bell Canada (NYSE:BCE) (TSE:BCE) from a hold rating to a sell rating in a research note released on Monday morning.

According to Zacks, “BCE continues to struggle with stringent regulatory norms, losses in network access services lines, price competition and operational risks. Successful implementation of the company’s six core goals is the key factor in determining its future profitability. The execution requires improved employee skills, more capital investment and targeted cost reductions. Failure in any of these initiatives could have an adverse impact on the company’s financials and growth prospects, leading to lower revenues and profitability. The company’s local line access for traditional telephony service also faces a decline due to higher wireless substitution and migration to IP-based services. The stock has underperformed the industry in the last three months. However, the company remains poised to benefit from solid activities in the wireless business, strong subscriber addition, drop in churn rates, and technology upgrade initiatives.”

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Other research analysts also recently issued reports about the stock. Barclays upped their price target on shares of Bell Canada from $51.00 to $52.00 and gave the stock an overweight rating in a report on Friday, February 9th. Desjardins downgraded shares of Bell Canada from a buy rating to a hold rating in a report on Friday, January 12th. One equities research analyst has rated the stock with a sell rating, four have given a hold rating, three have given a buy rating and one has assigned a strong buy rating to the company’s stock. The stock currently has a consensus rating of Hold and an average target price of $56.00.

Shares of NYSE:BCE opened at $43.11 on Monday. The firm has a market cap of $38,520.08, a PE ratio of 16.45, a P/E/G ratio of 4.48 and a beta of 0.33. The company has a debt-to-equity ratio of 1.18, a current ratio of 0.43 and a quick ratio of 0.39. Bell Canada has a 52-week low of $42.01 and a 52-week high of $49.06.

Bell Canada (NYSE:BCE) (TSE:BCE) last announced its quarterly earnings results on Thursday, February 8th. The utilities provider reported $0.60 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.59 by $0.01. The company had revenue of $5.96 billion during the quarter, compared to the consensus estimate of $5.96 billion. Bell Canada had a net margin of 12.25% and a return on equity of 19.85%. The company’s revenue for the quarter was up 4.5% compared to the same quarter last year. During the same period in the prior year, the business earned $0.76 earnings per share. sell-side analysts anticipate that Bell Canada will post 2.73 EPS for the current year.

The business also recently disclosed a quarterly dividend, which was paid on Sunday, April 15th. Investors of record on Thursday, March 15th were issued a $0.601 dividend. This represents a $2.40 dividend on an annualized basis and a yield of 5.58%. This is an increase from Bell Canada’s previous quarterly dividend of $0.56. The ex-dividend date of this dividend was Wednesday, March 14th. Bell Canada’s dividend payout ratio is presently 91.60%.

Bell Canada announced that its board has authorized a share buyback plan on Thursday, February 8th that authorizes the company to repurchase $175.00 million in shares. This repurchase authorization authorizes the utilities provider to repurchase shares of its stock through open market purchases. Stock repurchase plans are usually a sign that the company’s leadership believes its stock is undervalued.

Hedge funds and other institutional investors have recently bought and sold shares of the stock. DAVENPORT & Co LLC increased its holdings in Bell Canada by 6.5% in the fourth quarter. DAVENPORT & Co LLC now owns 61,496 shares of the utilities provider’s stock valued at $2,952,000 after purchasing an additional 3,729 shares during the period. MHI Funds LLC acquired a new stake in Bell Canada in the fourth quarter valued at $2,760,000. APG Asset Management N.V. increased its holdings in Bell Canada by 39.4% in the fourth quarter. APG Asset Management N.V. now owns 6,260,116 shares of the utilities provider’s stock valued at $251,237,000 after purchasing an additional 1,768,100 shares during the period. Candriam Luxembourg S.C.A. increased its holdings in Bell Canada by 1.7% in the fourth quarter. Candriam Luxembourg S.C.A. now owns 73,746 shares of the utilities provider’s stock valued at $3,554,000 after purchasing an additional 1,227 shares during the period. Finally, Scotia Capital Inc. increased its holdings in Bell Canada by 4.0% in the fourth quarter. Scotia Capital Inc. now owns 3,971,304 shares of the utilities provider’s stock valued at $190,667,000 after purchasing an additional 151,787 shares during the period. Institutional investors and hedge funds own 44.93% of the company’s stock.

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Bell Canada Company Profile

BCE Inc, a telecommunications and media company, provides wireless, wireline, Internet, and television (TV) services to residential, business, and wholesale customers in Canada. The company operates through three segments: Bell Wireless, Bell Wireline, and Bell Media. The Bell Wireless segment offers integrated digital wireless voice and data communications products and services.

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