BCE downgraded to Hold on dividend concerns at TD Securities

TD Securities downgraded BCE to Hold from Buy with a price target of C$58, down from C$61. The firm says its new free cash flow estimates “raise serious questions” about BCE’s dividend quality and dividend sustainability. A big reason why BCE is trading at a premium valuation to peers is because of its industry-leading dividend yield, combined with consistent 5% dividend growth, the analyst tells investors in a research note. However, TD says that if the yield is being boosted by a “chronically high” payout ratio, it should be given less valuation credit by investors.