BCE Stock: The Safest Double-Digit Dividend on the Market?
April 23, 2025
This Dividend Stock’s Flying Under the Radar
In a market where many investors are chasing growth and hype, dividend-paying stocks are quietly doing what they do best: delivering consistent income. And one dividend stock that keeps flying under the radar of many investors is BCE Inc (NYSE:BCE.)
Just so you know, BCE’s dividend yield is the highest among the large-cap North American telecom stocks.
For some reason, investors are trying to price in a worse-case scenario with BCE stock. The stock currently trades 32% below where it was at the same time last year. BCE also trades below its 50-day and 200-day moving averages (MAs), which suggests that the short-term and long-term trends are pointing downwards. Put simply: investor sentiment is bearish.
This might be a great time to start paying attention to BCE stock.
What Does BCE Inc Do?
BCE Inc, based in Montreal, Quebec, Canada, offers wireless, wireline, internet, and TV services to residential, business, and wholesale customers in Canada. More commonly just known as Bell Canada or Bell, it operates through two business segments: Bell Communication and Technology Services; and Bell Media.
The Bell Communication and Technology Services segment provides wireless products and services and wireline products and services comprising data and satellite TV and connectivity services. This segment of BCE also buys and sells local telephone, long-distance, and data services, and other services, from or to resellers and other carriers. In addition, it operates consumer electronic retail stores.
The Bell Media segment of the company offers conventional TV, specialty TV, pay TV, streaming, digital media, radio broadcasting, and out-of-home advertising services. (Source: “Profile.,” Yahoo! Finance, last accessed April 18, 2025.)
Income Investors Get Robust Dividends
BCE stock currently has a dividend yield of 13.02%, or pays $2.87 per share on an annual basis.
Generally speaking, a high yield like the one BCE stock offers raises red flags, but it’s important to understand that this company is different. BCE stock has a long history of paying and growing its dividend. Recently, the company paused dividend increases, but it makes substantial free cash flow from its core operations, which makes the dividends safe.
Also know that BCE Inc’s management is hard at work. They are trying to cut costs, increase profitability, and make sure the balance sheet is padded in case there’s a slowdown in the Canadian economy or the business faces further headwinds.
Chart courtesy of StockCharts.com
Immense Upside Potential with BCE Stock?
While the dividend yield is high with BCE stock, there could be huge capital appreciation as well.
Wall Street analysts are extremely bullish on BCE.
Looking at their estimates, the average target is at $27.98 at the time of writing. And there’s a high target of $34.17. Assuming that BCE stock hits analysts’ average target within a year, this would mean a gain of close to 27%. (Source: “Analysis,” Yahoo! Finance, April 18, 2025.)
Here’s something else to note: Wall Street analysts usually have a lot of influence on institutional investors. Speaking from experience, I can say that whenever analysts have a bullish view on a stock, institutional investors will start looking at it—at times, it can even induce buying from them.
You see, BCE stock has institutional investor ownership. Currently, 669 institutions own the stock; if more follow, this could be nothing but good news for BCE shareholders. Don’t forget that once institutional investors buy in, they build a support level for the stock, as they generally buy for the long term and don’t ditch their shares on minor fluctuations.
Lowdown on BCE Stock
BCE stock offers income investors a rare combination: a big dividend, institutional confidence, and a solid business model. While many investors are bearish, BCE is quietly doing what’s needed—delivering a decent financial performance and generating strong cash flow.
As per the most recent data, Royal Bank of Canada owns 54.04 million BCE shares, making it the stock’s biggest institutional owner. This amounts to $1.19 billion at the current price. (Source: “Holders,” Yahoo! Finance, accessed April 18, 2025.)
Lastly, this isn’t the first time that I’ve covered BCE stock here on Income Investors. I profiled it back in mid-February. Since then, the stock price has come down, but this has made it an even more compelling opportunity.
