BCE INC (BCE.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:BCE - CA05534B7604 - Common Stock
34.31 CAD
-0.36 (-1.04%)
Overall BCE gets a fundamental rating of 3 out of 10. We evaluated BCE against 30 industry peers in the Diversified Telecommunication Services industry. Both the profitability and financial health of BCE have multiple concerns. BCE is valied quite expensively at the moment, while it does show a decent growth rate. BCE also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- BCE had positive earnings in the past year.
- In the past year BCE had a positive cash flow from operations.
- Each year in the past 5 years BCE has been profitable.
- In the past 5 years BCE always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of BCE (7.85%) is worse than 66.67% of its industry peers.
- Looking at the Return On Equity, with a value of 27.48%, BCE is doing worse than 73.33% of the companies in the same industry.
- With a Return On Invested Capital value of 4.52%, BCE is not doing good in the industry: 83.33% of the companies in the same industry are doing better.
- BCE had an Average Return On Invested Capital over the past 3 years of 4.90%. This is in line with the industry average of 5.00%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.85% | ||
| ROE | 27.48% | ||
| ROIC | 4.52% |
ROA(3y)2.34%
ROA(5y)3.04%
ROE(3y)7.82%
ROE(5y)9.47%
ROIC(3y)4.9%
ROIC(5y)4.97%
1.3 Margins
- BCE has a worse Profit Margin (25.21%) than 66.67% of its industry peers.
- BCE's Profit Margin has declined in the last couple of years.
- With a Operating Margin value of 22.38%, BCE is not doing good in the industry: 80.00% of the companies in the same industry are doing better.
- BCE's Operating Margin has been stable in the last couple of years.
- BCE's Gross Margin of 67.92% is on the low side compared to the rest of the industry. BCE is outperformed by 76.67% of its industry peers.
- In the last couple of years the Gross Margin of BCE has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.38% | ||
| PM (TTM) | 25.21% | ||
| GM | 67.92% |
OM growth 3Y0.29%
OM growth 5Y-0.91%
PM growth 3Y-61.33%
PM growth 5Y-44.58%
GM growth 3Y-0.23%
GM growth 5Y-0.19%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so BCE is destroying value.
- Compared to 1 year ago, BCE has about the same amount of shares outstanding.
- The number of shares outstanding for BCE has been increased compared to 5 years ago.
- The debt/assets ratio for BCE is higher compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.73, we must say that BCE is in the distress zone and has some risk of bankruptcy.
- BCE's Altman-Z score of 0.73 is amongst the best of the industry. BCE outperforms 86.67% of its industry peers.
- BCE has a debt to FCF ratio of 10.36. This is a negative value and a sign of low solvency as BCE would need 10.36 years to pay back of all of its debts.
- BCE's Debt to FCF ratio of 10.36 is on the low side compared to the rest of the industry. BCE is outperformed by 80.00% of its industry peers.
- A Debt/Equity ratio of 1.57 is on the high side and indicates that BCE has dependencies on debt financing.
- BCE has a worse Debt to Equity ratio (1.57) than 73.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 10.36 | ||
| Altman-Z | 0.73 |
ROIC/WACC0.9
WACC5.02%
2.3 Liquidity
- BCE has a Current Ratio of 0.58. This is a bad value and indicates that BCE is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Current ratio of BCE (0.58) is worse than 83.33% of its industry peers.
- A Quick Ratio of 0.55 indicates that BCE may have some problems paying its short term obligations.
- With a Quick ratio value of 0.55, BCE is not doing good in the industry: 83.33% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.58 | ||
| Quick Ratio | 0.55 |
3. Growth
3.1 Past
- BCE shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.65%.
- Measured over the past years, BCE shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.78% on average per year.
- The Revenue has been growing slightly by 0.11% in the past year.
- The Revenue has been growing slightly by 0.51% on average over the past years.
EPS 1Y (TTM)-3.65%
EPS 3Y-1.59%
EPS 5Y-2.78%
EPS Q2Q%5.33%
Revenue 1Y (TTM)0.11%
Revenue growth 3Y1.35%
Revenue growth 5Y0.51%
Sales Q2Q%1.31%
3.2 Future
- The Earnings Per Share is expected to grow by 0.73% on average over the next years.
- BCE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.65% yearly.
EPS Next Y-9.1%
EPS Next 2Y-5.62%
EPS Next 3Y-3.12%
EPS Next 5Y0.73%
Revenue Next Year1.43%
Revenue Next 2Y2.23%
Revenue Next 3Y1.9%
Revenue Next 5Y1.65%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 11.83, the valuation of BCE can be described as very reasonable.
- BCE's Price/Earnings ratio is a bit more expensive when compared to the industry. BCE is more expensive than 73.33% of the companies in the same industry.
- When comparing the Price/Earnings ratio of BCE to the average of the S&P500 Index (28.60), we can say BCE is valued rather cheaply.
- BCE is valuated correctly with a Price/Forward Earnings ratio of 12.67.
- Based on the Price/Forward Earnings ratio, BCE is valued more expensive than 80.00% of the companies in the same industry.
- BCE's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.83 | ||
| Fwd PE | 12.67 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, BCE is valued a bit more expensive than 73.33% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, BCE is valued a bit more expensive than 73.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.09 | ||
| EV/EBITDA | 6.84 |
4.3 Compensation for Growth
- A cheap valuation may be justified as BCE's earnings are expected to decrease with -3.12% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-5.62%
EPS Next 3Y-3.12%
5. Dividend
5.1 Amount
- BCE has a Yearly Dividend Yield of 6.15%, which is a nice return.
- Compared to an average industry Dividend Yield of 5.16, BCE pays a better dividend. On top of this BCE pays more dividend than 96.67% of the companies listed in the same industry.
- BCE's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.15% |
5.2 History
- The dividend of BCE has a limited annual growth rate of 4.82%.
- BCE has paid a dividend for at least 10 years, which is a reliable track record.
- BCE has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)4.82%
Div Incr Years16
Div Non Decr Years16
5.3 Sustainability
- BCE pays out 43.52% of its income as dividend. This is a bit on the high side, but may be sustainable.
- The dividend of BCE is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP43.52%
EPS Next 2Y-5.62%
EPS Next 3Y-3.12%
BCE INC / BCE.CA FAQ
Can you provide the ChartMill fundamental rating for BCE INC?
ChartMill assigns a fundamental rating of 3 / 10 to BCE.CA.
What is the valuation status for BCE stock?
ChartMill assigns a valuation rating of 2 / 10 to BCE INC (BCE.CA). This can be considered as Overvalued.
How profitable is BCE INC (BCE.CA) stock?
BCE INC (BCE.CA) has a profitability rating of 3 / 10.
Can you provide the expected EPS growth for BCE stock?
The Earnings per Share (EPS) of BCE INC (BCE.CA) is expected to decline by -9.1% in the next year.
Is the dividend of BCE INC sustainable?
The dividend rating of BCE INC (BCE.CA) is 8 / 10 and the dividend payout ratio is 43.52%.