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BCE's Bell Media Adds New TV Network, Bell MTS' Fiber Focus

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On May 15, BCE Inc.’s (BCE - Free Report) operating segment, Bell Media, announced that it has completed the acquisitions of French-language TV network V and ad-supported Video On Demand service from Groupe V Media. Bell is wholly owned by BCE, Canada’s largest communications company. The unit is a leading content creation company with premier assets in Quebec. Bell Media owns Montreal-based Astral, an out-of-home advertising network of 50,000 faces in five provinces.

The move will strengthen choice for TV viewers in Quebec while enhancing the company’s investment in French-language content creation. Also, the addition of the V team to Bell’s broad range of media properties will help deliver the most compelling content to customers. The acquisition of V underscores Bell Media’s commitment to increase the production of original local content in Quebec. V Media operates television stations in Montreal, Quebec City, Saguenay, Sherbrooke and Trois-Rivieres.

In another development, Bell MTS — a subsidiary of BCE that operates telecommunications services in the Canadian province of Manitoba — announced an investment to bring its all-fiber network to around 3,300 residences and business locations throughout the City of Morden. The network expansion will provide fast consumer Internet speeds in Canada to the Pembina Valley community.

The move is part of Bell MTS’ C$1 billion investment plan to deploy the most advanced fiber and wireless broadband networks across Manitoba. The construction of the Morden fiber project is set to begin this summer, while the first customers are expected to have access to Bell MTS Gigabit Fibe Internet, Whole Home Wi-Fi and Fibe TV this fall. The expansion will deliver home Internet speeds of up to 1.5 Gigabits per second, the fastest available in Canada. Meanwhile, Bell MTS is bringing direct fiber connections to homes and businesses in La Salle, Flin Flon and Churchill this year.

However, due to uncertainties related to COVID-19, BCE has withdrawn all of its 2020 financial guidance. That said, the company’s underlying business fundamentals are strong. Its strong liquidity position, underpinned by a healthy balance sheet, substantial free cash flow generation and access to the debt and bank capital markets, is expected to provide financial flexibility to execute its planned capital expenditures for 2020.

BCE’s shares have lost 19.6% compared with 24.1% decline of the industry in the past six months.

The company topped earnings estimates twice in the last four quarters and missed the same in the remaining two quarters. It has a trailing four-quarter positive earnings surprise of 0.7%, on average. The stock is currently trading with a forward P/E of 16.4X.

BCE has a dividend yield of 6.1% compared with 5.3% of the industry. The company has a long-term earnings growth expectation of 4.6% compared with the industry’s 8.2%.

BCE currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader sector are Turtle Beach Corporation (HEAR - Free Report) , Plantronics, Inc. (PLT - Free Report) and Ooma, Inc. (OOMA - Free Report) . While Turtle Beach sports a Zacks Rank #1 (Strong Buy), Plantronics and Ooma carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Turtle Beach has a trailing four-quarter positive earnings surprise of 46.4%, on average.

Plantronics has a trailing four-quarter positive earnings surprise of 27.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.

Ooma has a trailing four-quarter positive earnings surprise of 124%, on average.

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