Down by 15%: Is BCE Stock a Good Investment in January 2023?

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Dial moving from 4G to 5G

The TSX is full of stocks that can only be good investments under the right circumstances. Undervaluation, underpricing and sector-specific bullish phases are some of the characteristics that make a stock attractive, at least for a period of time.

If that attraction is removed and the stock offers little else over the long term, it is generally better to exit your position and divert capital to more productive avenues.

Dividend stocks are more resilient to these “purities” because they can provide consistent dividend-based income. Blue-chip stocksWith strong long-term prospects, dividends remain resilient. These solid stocks deserve a place in your portfolio for years to come.

The best time to buy such stocks is when they are discounted, even if it doesn’t affect their capital appreciation potential, you can still get better returns.

Canada’s telecom giant

B.S.M (TSX:BCE) is Canada’s largest telecommunications company by market cap, currently valued at $56 billion. It is registered in Canada and the US, but mostly operates in Canada. Although it does not boast the largest number of subscribers in the country, it has a large presence across multiple domains, including over 6,000 retail points.

There are eight different companies under the Bell umbrella, including one of the top residential Internet companies in Atlantic Canada and the country’s largest technology retailer (The Source). The company is expanding its presence in innovative new markets under the “Bell Ventures” umbrella and already has a portfolio of investments including AI-focused companies and ventures.

This diversified business model looks promising, especially when you consider the new opportunities we will see as IoT becomes more common and millions of new devices come online. B.S.M 5G shares In Canada, it may still benefit from the promising opportunities of 5G as it overlaps with IoT.

A good choice

BCE is currently trading at a 15.6% discount from its 2022 peak, pushing the already attractive yield to a slightly higher figure of 5.9%. The discount does nothing to make the value more attractive, and the price-to-earnings ratio is currently 20, but it’s in line with its peers.

Assuming BCE sees a strong uptrend in 2023, now is a good time to consider adding it to your portfolio. Several institutional investors have already increased their positions in the telecom company, and the big money move is a good sign of confidence in BCE’s short-term prospects.

From a long-term perspective, BCE is a strong enough investment for its dividend alone. It is an established aristocracy that has managed to sustain and grow its payments through at least two major financial crises. It hasn’t fared well in capital appreciation, but prices have risen about 40% over the past decade, enough to neutralize (to an extent) the impact of inflation.

Stupid carrying

A reliable stock like BCE can be a strong addition to your portfolio, both for its dividend and its growth prospects. The company has a strong presence in the market and a leadership position in the industry, making it relatively resilient against future market downturns.

Position 15% Decline: Is BCE Stock a Good Investment in January 2023? appeared first Motley Fool Canada.

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Fool Contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. A motley fool Disclosure Policy.


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