BCE INC (BCE.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:BCE - CA05534B7604 - Common Stock
34.67 CAD
+0.19 (+0.55%)
Overall BCE gets a fundamental rating of 3 out of 10. We evaluated BCE against 30 industry peers in the Diversified Telecommunication Services industry. BCE has a bad profitability rating. Also its financial health evaluation is rather negative. BCE is quite expensive at the moment. 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.
- BCE had a positive operating cash flow in the past year.
- 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
- With a Return On Assets value of 7.85%, BCE is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
- 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.
- Looking at the Return On Invested Capital, with a value of 4.52%, BCE is doing worse than 83.33% of the companies in the same industry.
- 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
- Looking at the Profit Margin, with a value of 25.21%, BCE is doing worse than 66.67% of the companies in the same industry.
- In the last couple of years the Profit Margin of BCE has declined.
- Looking at the Operating Margin, with a value of 22.38%, BCE is doing worse than 80.00% of the companies in the same industry.
- In the last couple of years the Operating Margin of BCE has remained more or less at the same level.
- With a Gross Margin value of 67.92%, BCE is not doing good in the industry: 76.67% of the companies in the same industry are doing better.
- BCE's Gross Margin has been stable in the last couple of years.
| 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.
- BCE has about the same amout of shares outstanding than it did 1 year ago.
- BCE has more shares outstanding than it did 5 years ago.
- BCE has a worse debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 0.74, we must say that BCE is in the distress zone and has some risk of bankruptcy.
- BCE has a better Altman-Z score (0.74) than 86.67% of its industry peers.
- The Debt to FCF ratio of BCE is 10.36, which is on the high side as it means it would take BCE, 10.36 years of fcf income to pay off all of its debts.
- With a Debt to FCF ratio value of 10.36, BCE is not doing good in the industry: 80.00% of the companies in the same industry are doing better.
- BCE has a Debt/Equity ratio of 1.57. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 1.57, BCE is not doing good in the industry: 73.33% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 10.36 | ||
| Altman-Z | 0.74 |
ROIC/WACC0.9
WACC5.03%
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.
- BCE has a Current ratio of 0.58. This is amonst the worse of the industry: BCE underperforms 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.
- Measured over the past years, BCE shows a small growth in Revenue. The Revenue has been growing by 0.51% on average per year.
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
- BCE is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.73% yearly.
- 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
- Based on the Price/Earnings ratio of 11.96, the valuation of BCE can be described as 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 (28.87), we can say BCE is valued rather cheaply.
- The Price/Forward Earnings ratio is 12.80, which indicates a correct valuation of BCE.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of BCE indicates a rather expensive valuation: BCE more expensive than 80.00% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.96, BCE is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.96 | ||
| Fwd PE | 12.8 |
4.2 Price Multiples
- BCE's Enterprise Value to EBITDA 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.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of BCE indicates a slightly more expensive valuation: BCE is more expensive than 73.33% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.17 | ||
| EV/EBITDA | 6.87 |
4.3 Compensation for Growth
- BCE's earnings are expected to decrease with -3.12% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-5.62%
EPS Next 3Y-3.12%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 6.15%, BCE is a good candidate for dividend investing.
- 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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.82%
Div Incr Years16
Div Non Decr Years16
5.3 Sustainability
- 43.52% of the earnings are spent on dividend by BCE. 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%.