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The Bank of Canada recently lowered interest rates by 0.25% and the United States is expected to start reducing interest rates later this year or in early 2025. The drop in borrowing costs could spark a return of investors to Canadian telecom and bank stocks that declined as rates rose through 2022 and 2023.
BCE
BCE (TSX:BCE) is Canada’s largest communications company, with a current market capitalization of nearly $41 billion. The stock trades near $44.50 at the time of writing compared to $74 at one point in 2022.
The steep decline surprised long-term holders of the stock. BCE trades close to a 10-year low, and some pundits speculate that the dividend could be at risk of being cut.
At the current share price, the dividend yield is 9%. When dividend yields get this high the market could be signalling concerns that the distribution is not sustainable. No dividend is 100% safe, but BCE’s payout should…
