Prices on everything just seem to be going up lately. In Canada, communication costs are on the rise as well. Telecommunications company Bell Canada (TSE:BCE) recently joined a Parliament session where regulators grilled it about prices. This didn’t help Bell’s own stock price much, as it fell fractionally in Wednesday afternoon’s trading.
Bell, among others, took to Parliament to make clear that phone and internet costs are on the decline throughout Canada. However, Bell noted that it might not feel that way because Canadians are also using a lot more data, which might make bills seem and feel higher accordingly.
Indeed, Rogers Telecom (TSE:RCI), which also testified at the hearing, raised prices by $5, on average, for those who weren’t under a contract. Members of Parliament, meanwhile, suggested that the move was “tone deaf” at the least. Rogers, meanwhile, asserted that the price hike—which mostly impacted legacy plans—was done to “…make sure that these customers had choice.”
Bell, meanwhile, asserted that prices are on the decline, though it would not “…talk about price setting in a forum with my two competitors sitting right here.”
Big Yield or Value Trap?
Meanwhile, investors are likely eyeing Bell for one key reason: its hefty 8.6% dividend yield. Bell is a widely-held dividend stock for several reasons, and with share prices on the decline as of late, that’s made it—and its healthy yield—attractive. However, reports note that the yield is likely to decline starting in 2025, following the completion of a fiber expansion project. Thus, the current ratio is likely unsustainable, though some payout will likely remain in place going forward.
Is Bell Canada a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on BCE stock based on three Buys and nine Holds assigned in the past three months, as indicated by the graphic below. After an 18.26% loss in its share price over the past year, the average BCE price target of C$54.58 per share implies 18.27% upside potential.
