Good earnings news from BCE Inc. BCE-T- on Thursday morning translated into a decent pop for the stock. The communications company nailed expectations with its quarterly results, but its full-year earnings forecast was slightly higher than analysts’ own forecasts.
So what are analysts saying now?
Greg MacDonald at National Bank Financial raised his price target on the stock to $32 from $30 previously. He also raised his recommendation to “outperform” and “sector perform.” Part of his newfound enthusiasm for the stock comes from hopes for a bigger dividend: Right now, BCE pays out a quarterly dividend of 43.5 cents a share, after raising the dividend twice over the past year. That equates into an annual payout of $1.74.
However, Mr. MacDonald estimates that that could rise to $1.80 by 2011 – giving the stock a dividend yield of 5.6 per cent if the analyst’s $32 price target is hit.
