# Why sell bce ?



## AMABILE (Apr 3, 2009)

BCE just recently hit a 52 wk hi (51.09)
why or who is selling it *TO-DAY[*/U] as low
as $50.30, just a few days before the ex-dividend date?


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## My Own Advisor (Sep 24, 2012)

Not selling here.


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## dubmac (Jan 9, 2011)

I plan on dripping BCE for another 15 yrs then drawing down on the dividend in retirement
http://www.theglobeandmail.com/glob...-help-seniors-beat-inflation/article18593525/
The only reason that I can think someone would sell is because they expect it to drop (which sounds like speculation to me). If it drops, then I'll buy more.


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## the-royal-mail (Dec 11, 2009)

No way. I am keeping this one as a long term pillar of my TFSA. I only sell when the price spikes and I feel the price might come down a lot but even then I might tend to do that moreso with a speculative stock like ACQ. BCE is staying put with me.


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## Jon_Snow (May 20, 2009)

No way I'm selling. I bought 1000 shares of this when it tanked on the "Verizon entry into Canada" scare - got in around the $40 mark - the dividend yield at this price is around 6%. Of course I'm sitting on a large capital gain here, but the $2500 a year BCE is going to pay me annually (hopefully with some dividend increases in the future) is much more valuable to me than cashing in on a capital gain right now. $2500 is a large chunk of our 30k yearly spending. I love dividends. :biggrin:


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## yyz (Aug 11, 2013)

I hear you,the Verizon scare helped me alot with BCE and T.
That being said watch it when it goes ex div.It quite often drops by more than the dividend amount which I think soem people will sell it and then buy it back.It's almost like getting your dividend in real time.Take a look at what T did last week when it went ex div.It dropped by alot more than the dividend paid.


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## My Own Advisor (Sep 24, 2012)

Please bring us more telco scares....sounds like we all want to buy


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## Islenska (May 4, 2011)

That can be a scary part though, when a stock becomes "can't miss", there may be something out of left field.


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## AMABILE (Apr 3, 2009)

so, BCE is down 2% after the ex-dividend date, however 
if it had not been sold, it would have earned 5%.


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## yyz (Aug 11, 2013)

5% is the yearly dividend yield.
Today you have earned a quarterly dividend of $0.6175 meanwhile the stock has dropped at it lowest today so far by $1.23

So you tell me,but it seems to be a better bet to sell before it goes exdiv and buy it back after.You would have made money.And like I said before you'd already "have" your dividend


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## AMABILE (Apr 3, 2009)

YYZ, thanks so much for  clarifying this issue for me.
I have LOTS of BCE in my non-reg account that I will hold forever.
however, I also have quite a few shares in my reg'd account
which I will definitely try this strategy.... thanks again


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## yyz (Aug 11, 2013)

I have watched it as well as Telus and Rogers which I also own.It appears that when they go ex div the share price seems to drop by quite a bit more than the dividend.I might also try this approach,but it seems to me that sometimes when I hold a security at a good buy price like BCE which I bought at $41.30 I can't sell it at $50 and buy it back at $49 even though that is the right thing to do.My head gets stuck around the bargain price I bought in at.


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## lightcycle (Mar 24, 2012)

A couple of reasons you would hold instead of time the ex-dividend cliff:

1) avoiding capitals gains
2) claiming the dividend tax credit if you have no other income


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## HaroldCrump (Jun 10, 2009)

Also, a buy/sell commission each quarter.
That will eat into the capital gains.


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## atrp2biz (Sep 22, 2010)

Are you really globalizing a strategy with one day's performance? The broader market (ex. precious metals) is also down. Maybe that has something to do with the amount other than the dividend amount???



yyz said:


> 5% is the yearly dividend yield.
> Today you have earned a quarterly dividend of $0.6175 meanwhile the stock has dropped at it lowest today so far by $1.23
> 
> So you tell me,but it seems to be a better bet to sell before it goes exdiv and buy it back after.You would have made money.And like I said before you'd already "have" your dividend


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## yyz (Aug 11, 2013)

atrp2biz,
Why don't you go back and check the last X number of ex dividend dates and see? Check what Rogers did this week and Telus last week.Then go back a few quarters.It appears that when they go ex div they go beyond the dividend amount.Sometimes quite a bit.It's just something I noticed I wasn't really planning to write a book about it nor am I advocating doing it.

And a buy and sell is $20 no big deal when you are talking a few hundred dollars

Capital gains not a problem in a TFSA,RRSP etc. and that also negates the dividend tax credit

You really don't "time" the ex dividend cliff,the dates are known.It's a case of how far to let it drop before you re buy it if you would choose to do this

Here for BCE is the last 4 ex dividends

June 11 2014 closed at $50.30
June 12 2014 ex dividend closes at $49.40 high $49.61 Low $49.07 total drop $0.90 max drop intra day $1.23 actual dividend paid $0.6175

March 11 2014 closed at $48.26
March 12 2014 ex dividend closes at $47.40 high $47.53 low $47.13 total drop $0.86 max drop intra day $1.13 actual dividend paid $0.5825

Dec 11 2013 closed at $46.37
Dec 12 2013 ex dividend closes at $45.62 high $45.83 low $45.38 total drop $0.75 max drop intra day $1.24 actual dividend paid $0.5825

Sept 11 2013 closed at $44.81
Sept 12 2013 ex dividend closes at $43.49 high $44.35 low $43.36 total drop $1.32 max drop intra day $1.45 actual dividend paid $0.5825



Coincidence?

Using the above 4 dates you could almost make double the dividend in 3 out of 4 times. Multiply that by 1000 shares and you aren't talking chump change.And at a $20 sell and buy commission you could come out a fair bit ahead. At that it's only $0.02 per share buy and sell total
But in all 4 of the last instances you would have been better off to sell it the day before ex dividend and buy it back the next day.


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## Eder (Feb 16, 2011)

Am I willing to bet my retirement on this strategy?...


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## dubmac (Jan 9, 2011)

seems like a lot of work.
I'd rather just buy it, drip it, and forget about it.


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## yyz (Aug 11, 2013)

No one said to bet your retirement . And I am not sure how selling a stock could put your retirement in jeopardy.

I never told anyone to do it just pointed out a previous poster thought the stock dropped 2% and they got a 5% dividend and they were ahead.Not true
And if you think 1 sell and 1 buy is alot of work whatever.At 1000 shares you could easily make $300-400 extra per quarter.For 5 minutes work.Obviously you guys must get paid more than me.


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## AMABILE (Apr 3, 2009)

Right on, yyz.......as soon as BCE nears $51.00 again,
I'm going to sell the 500 shares in my RRSP that I
bought for $25.30, then buy in again around $49ish.


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## lightcycle (Mar 24, 2012)

Capital gains, tax credits and commissions aside, I agree there is a clear pattern.

However there is an element of risk involved, where you have to calculate how far the drop you want to weather before you buy back in, given you have to make back the $0.6175 dividend you lost. In December 2013, if you were more than $0.17 greedier over and above the quarterly dividend, then the price would have moved on you and you would have lost your chance at keeping BCE and watching it move up a whopping $6 over the next year and a half. Either that, or you would have been scrambling to buy back in at a higher price.

Another factor is the underlying market movement of the day. In an up-market day, the ex-dividend cliff may be less than the dividend payout. A couple of up-market days in a row and you'd be priced out of the market again.

Just some things to think about.


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## yyz (Aug 11, 2013)

Exactly,
It appears to be a pattern at least from what I have seen with the 3 big telcos. They seem to overshoot the dividend to the downside .Is it risky yes but in the stock market there is not much without risk.
I honestly don't know if even in an up market you would see the ex dividend price not taken into account by the market.It might be interesting to go back further and take a look and see if this trend continues.


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## HaroldCrump (Jun 10, 2009)

In this day and age of high volume institutional and automated trading, it has become increasingly difficult for small investors to take advantage of the ex dividend dates.
Used to be that sleepy, blue-chip stocks would dip approx. the same amount as the upcoming dividend after the ex date.
One could play it several ways:
- If you are dividend-crazy, you could buy before the dividend and sell after (accounting for a round trip commission every quarter).
- Or, you could convert dividend income to more tax-advantaged capital gains by selling just before the ex date and re-buying afterwards

But these days, with so much noise & global forces affecting stocks, dividend just gets lost in the noise.
Stocks move higher/lower regardless of dividends.

This affect can still be observed in some low volume, high yield stocks like small income trusts, REITs, etc.
But given the low volume and high spreads, it is probably not too profitable anyway.


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## atrp2biz (Sep 22, 2010)

If you can figure out an intraday high and low (or even just the low), maybe you should right a book! That's what I call cherry-picking analysis. Your analysis is really the equivalent of "On any given day, the intraday low of the next day will be below the close of the previous day. Therefore, I should sell my stock everyday."

Good luck anyways.




yyz said:


> atrp2biz,
> June 11 2014 closed at $50.30
> June 12 2014 ex dividend closes at $49.40 high $49.61 Low $49.07 total drop $0.90 max drop intra day $1.23 actual dividend paid $0.6175
> 
> ...


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## AMABILE (Apr 3, 2009)

BMO Capital Mkts upgrades the price target to $52.
with over 2 million shares traded, closed at $49.56
who and why did they sell ?


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## Synergy (Mar 18, 2013)

The Fool, bullish on BCE: The Safest 5% Yield on the TSX



> Perhaps the biggest advantage BCE has is this: the sheer cost to reproduce its network. When Warren Buffett is considering an investment he asks himself this question: “Give me a billion dollars and how much can I hurt the guy?”
> 
> In the case of BCE, a billion dollars would do little to hurt the company. Its mobile broadband network, which covers 98% of Canada’s population, would cost tens of billions to recreate, and no amount of money could reproduce a loyal fan base like the Montreal Canadiens or the Toronto Maple Leafs.


http://www.fool.ca/2014/06/17/the-s...110243117&mc_cid=0f754beeb2&mc_eid=2dbce3e242


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## favelle75 (Feb 6, 2013)

Down 3 days in a row....maybe selling before the ex-dividend and buying back is a good idea...


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## Cal (Jun 17, 2009)

dubmac said:


> I'd rather just buy it, drip it, and forget about it.


This is the stock for that!


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## Moneytoo (Mar 26, 2014)

So does anybody know what's going on with BCE? I was gonna buy today at $49, but the electronic transfer got stuck, and it's at $48.50ish now... hopefully the money will make it to the account before it bounces back up


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## plasmasnake (Apr 17, 2014)

Any opinions as to why BCE is so much more overvalued than RCI?


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## plasmasnake (Apr 17, 2014)

Synergy said:


> In the case of BCE, a billion dollars would do little to hurt the company. Its mobile broadband network, which covers 98% of Canada’s population, would cost tens of billions to recreate


I might be inclined to agree but I wonder how much of an impact Videotron would have if they do expand into the rest of Canada and possibly buy out Mobilicity and/or Wind Mobile. They had 503,300 wireless subscribers at the end of 2013: http://www.marketwired.com/press-re...13-consolidated-results-tsx-qbr.a-1888345.htm


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## doctrine (Sep 30, 2011)

It's not that BCE is more expensive, it is that Rogers has had the most profit issues of the group, so it has the highest discount. Also, Rogers has the most to lose in a Videotron scenario. New competitors are pushing the hardest in the big cities, where Rogers is the dominant provider.


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## HaroldCrump (Jun 10, 2009)

Rogers is also the most exposed among the Big 3 to low-margin and money-losing businesses like print and TV media.
They also have very high debt (esp. after the NHL rights acquisition).
The dual-class share structure doesn't help matters, either.


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## Moneytoo (Mar 26, 2014)

On the corporate front, Bell Media, the radio and television division of BCE Inc., is laying off as many as 120 jobs or about five per cent of its Toronto workforce due to “financial pressure” in its advertising and subscription TV services. BCE shares dipped three cents to $48.50 (Canadian).


Had a limit Buy order at $48.40, the lowest it dipped was $48.47 - oh well, will wait a bit more...


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## Nemo2 (Mar 1, 2012)

Bought some yesterday @ $48.455


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## favelle75 (Feb 6, 2013)

My average buy in is around $45....I'd hate to buy above that now... Think we'll get back to that level this year?


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## Synergy (Mar 18, 2013)

favelle75 said:


> My average buy in is around $45....I'd hate to buy above that now... Think we'll get back to that level this year?


If inflation spikes and interest rates start rising too quickly you could see some weakness (buying opportunies) in the interest sensiive sectors - REIT's, Pipe's, Telco's, etc.


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## doctrine (Sep 30, 2011)

I don't think BCE drops below $41, although it could hit $45. At $41, the yield would be 6%, which BCE hasn't had in quite a while. Even with higher interest rates, a 6% yield on BCE would be very attractive given their ability to raise the dividend over time.


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## leeder (Jan 28, 2012)

BCE would look attractive below $45 per share. Does anyone have any issue with their payout ratio and the potential to raise dividend? It's sitting at about 95% of earnings. Competitors, like Telus and Rogers, have payout ratios at 74% and 59%, respectively.


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## favelle75 (Feb 6, 2013)

I would buy as many shares as I could under $45.


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## plasmasnake (Apr 17, 2014)

HaroldCrump said:


> Rogers is also the most exposed among the Big 3 to low-margin and money-losing businesses like print and TV media.
> They also have very high debt (esp. after the NHL rights acquisition).
> The dual-class share structure doesn't help matters, either.


Good points. Considering the expectation that interest rates will rise, I can see how their high debt would have an impact on their share price. I think it's a given that that their internet and wireless businesses will remain competitive with BCE and T, but if their debt costs rise that may have an impact on dividend growth.

I've been thinking about the "Internet of Things", and how that might become a new driver for wireless revenue growth with things like smart cars, smart appliances, etc. (since the growth from wireless customers is slowing down now that the majority of Canadians use smartphones). I wonder if any one of the Big 3 will do a better job than the rest in taking advantage of this opportunity. (Edit: I guess this may be somewhat off-topic, but it still concerns BCE I think)


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