BCE INC (BCE.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:BCE - CA05534B7604 - Common Stock
34.48 CAD
-0.04 (-0.12%)
BCE gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 30 industry peers in the Diversified Telecommunication Services industry. Both the profitability and financial health of BCE have multiple concerns. BCE is quite expensive at the moment. It does show a decent growth rate. Finally 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.
- In the past 5 years BCE has always been profitable.
- BCE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- BCE's Return On Assets of 7.85% is on the low side compared to the rest of the industry. BCE is outperformed by 66.67% of its industry peers.
- BCE has a Return On Equity of 27.48%. This is in the lower half of the industry: BCE underperforms 73.33% of its industry peers.
- 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
- The Profit Margin of BCE (25.21%) is worse than 66.67% of its industry peers.
- 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.
- BCE's Operating Margin has been stable in the last couple of years.
- 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.
- 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.
- The number of shares outstanding for BCE remains at a similar level compared to 1 year ago.
- Compared to 5 years ago, BCE has more shares outstanding
- Compared to 1 year ago, BCE has a worse debt to assets ratio.
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.
- With an excellent Altman-Z score value of 0.74, BCE belongs to the best of the industry, outperforming 86.67% of the companies in the same industry.
- 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.
- The Debt to FCF ratio of BCE (10.36) is worse than 80.00% of its industry peers.
- BCE has a Debt/Equity ratio of 1.57. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 1.57, BCE is doing worse than 73.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 10.36 | ||
| Altman-Z | 0.74 |
ROIC/WACC0.9
WACC5.03%
2.3 Liquidity
- A Current Ratio of 0.58 indicates that BCE may have some problems paying its short term obligations.
- BCE's Current ratio of 0.58 is on the low side compared to the rest of the industry. BCE is outperformed by 83.33% of its industry peers.
- BCE has a Quick 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 worse Quick ratio (0.55) than 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.58 | ||
| Quick Ratio | 0.55 |
3. Growth
3.1 Past
- The earnings per share for BCE have decreased by -3.65% in the last year.
- The Earnings Per Share has been decreasing by -2.78% on average over the past years.
- BCE shows a small growth in Revenue. In the last year, the Revenue has grown by 0.11%.
- BCE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.51% yearly.
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.
- Based on estimates for the next years, BCE will show a small growth in Revenue. The Revenue will grow by 1.65% on average per year.
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 11.89, the valuation of BCE can be described as reasonable.
- Based on the Price/Earnings ratio, BCE is valued a bit more expensive than the industry average as 73.33% of the companies are valued more cheaply.
- The average S&P500 Price/Earnings ratio is at 27.25. BCE is valued rather cheaply when compared to this.
- With a Price/Forward Earnings ratio of 12.73, BCE is valued correctly.
- Based on the Price/Forward Earnings ratio, BCE is valued expensively inside the industry as 80.00% of the companies are valued cheaper.
- BCE's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.89 | ||
| Fwd PE | 12.73 |
4.2 Price Multiples
- 73.33% of the companies in the same industry are cheaper than BCE, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, BCE is valued a bit more expensive than the industry average as 73.33% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.13 | ||
| EV/EBITDA | 6.86 |
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
- BCE has a Yearly Dividend Yield of 6.15%, which is a nice return.
- BCE's Dividend Yield is rather good when compared to the industry average which is at 5.16. BCE pays more dividend than 96.67% of the companies 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%.