Should you buy, sell or hold BCE (TSX:BCE) stock? BCE is historically viewed as a stellar long-term investment with one of the best dividends on the market.
Unfortunately, BCE’s performance has lagged in recent years. Specifically, the stock has dropped significantly in recent years when compared to its telecom peers.
This begs the question as to whether investors should look to buy, sell, or hold BCE in 2025.
Let’s try to answer that by looking at the case for each.
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The case to buy
Let’s start with the obvious. BCE is a defensive gem that has paid out juicy dividends for over a century without fail. BCE’s wireless segment alone is the envy of its peers, while its sprawling media segment provides an alternative revenue stream.
The bulk of BCE’s current issues could be traced back to the interest rate hikes we saw in recent years. Would it not be reasonable to assume that BCE will right the ship now that rates are beginning to drop again?
The icing on the cake for prospective investors considering BCE is the stock price. As of the time of writing, BCE trades at just over $34 per share, less than $3 off its 52-week low. Additionally, the stock has tanked well over 35% in the trailing 12 months.
This makes it a bargain buy for some longer-term investors, but that’s not all.
While the stock has dropped, the yield on BCE’s already juicy yield has swelled. As of the time of writing, the yield on that dividend has hit 11.6%. This makes it an insane investment where just a $12,000 investment will earn an income of nearly $1,400.
As to the sustainability of that dividend, BCE has announced it would cease its annual increases while it continues its restructuring.
So far, that includes shuddering some of the poorer performing media assets and selling off its stake in MLSE. Funds used from that whopping $4.7 billion sale were then used to acquire U.S.-based Ziply Fiber.
The U.S. is largely underserved when it comes to fibre penetration, and BCE’s expertise could prove lucrative over the longer run.
The case to sell
BCE’s core subscription business of wireless, internet, wireline, and TV have shown weakness in recent years. That’s especially true for both the wireline and TV segments, as subscribers continue to “cut the cord” and turn to streaming and wireless devices.
In other words, there are cracks in that core defensive moat. The company needs to address them, or evolve. To be fair, BCE has taken those hard steps to correct itself, including selling off parts of its media business as well as undergoing a massive restructuring.
Unfortunately, that means BCE is well in the midst of a multi-year transformation, which is something that not all investors will want to stay around for. In fact, things may need to get worse before they get better.
In short, rather than waiting for BCE to turn around, investors with shorter timelines may be better suited to look elsewhere for growth.
The case to hold
The hardest decision on whether to buy, hold, or sell BCE rests with existing investors of BCE. If BCE completes its planned turnaround, investors can expect solid growth to resume within a few years.
On the other hand, if that growth takes longer than expected, or the market outperforms BCE (as it did last year), investors will be missing out on some serious growth.
This leaves existing investors on a middle ground where the decision to hold is ultimately based on risk and the timeline.
Will you buy, sell, or hold BCE stock?
BCE was often referred to as a defensive investment with an impressive moat. But while that defensive appeal (and its corresponding opportunity) still exists, it is no longer the impenetrable fortress it once was.
In other words, buying BCE stock right now isn’t for everyone, but it could be ideal for those with longer timelines.
In my opinion, investors with an appetite for risk and longer timelines may want to consider a small position in BCE.
