NEW YORK (TheStreet) -- Bell Canada (BCE - Get Report) is Canada's largest telecommunications company, with cellular/wireless services, wireline broadband and TV, wireline voice, as well as radio and varying media services.
Both of these technology companies can be referred to as "one-stop shops," operating in services segments with intense competition and varying degrees of regulation.
So which one is the better investment? Let's look at some key metrics for these two telecom stocks.
First, we'll look at BCE. Then we'll bring AT&T into the analysis, along with a few other telecommunications stocks.
BCE has a dividend yield of about 4.8%, which amounts to 65 Canadian cents per share, paid quarterly to holders of common shares. That's about 50 cents in the U.S. right now.
Over the past five years, BCE has increased its dividend about 50% to its current level from 43.5 Canadian cents. (The actual dividend amounts received by U.S. investors may vary, due to fluctuations in the value of the two currencies.)
BCE offers investors the choice of either common shares or preferred stock, and there are a number of different series of preferred shares, with a range of yields and maturation dates.
So how has BCE stock been performing? Well, the 52-week range for the common stock is $39.73 - $48.27. (This is in dollars and is for the shares traded on the New York Stock Exchange. BCE is also listed on the Toronto Stock Exchange.) Shares were recently trading at $41.27 at the lower end of their 52-week range. They were roughly 3.9% above the low and 14.5% below the high.
What do analysts think about BCE?
S&P Capital IQ provides the following: a 3-star hold rating, one-year price target of $47.00 and a fair value calculation of $41.00.
Morningstar provides the following: a 3-star hold rating and a fair value estimate of $43.00.
Source: Yahoo Finance
Source: Yahoo Finance
Many investors hold shares in these companies for income purposes, because of their reliably high dividend yields. Few investors hold shares in these companies for capital appreciation purposes. Dividend growth rates are usually low with these types of telecommunications/utility companies.
So should you consider owning BCE over AT&T, or perhaps one of the other companies shown in the tables above?
BCE is the largest (by market cap) and most diverse Canadian telecom services provider. AT&T is not only the largest U.S. telecom services provider, but it has now completed the acquisition of DIRECTV and is continuing to pursue additional service provision opportunities deeper into Mexico and Latin America.
It would appear that AT&T has more geographic room in which to expand and capitalize on opportunities.
Speaking of geography, there isn't much overlap between BCE and AT&T in areas served, so perhaps it's wise to own both for diversification purposes.