BCE (NYSE: BCE) and BT Group PLC (NYSE:BT) are both large-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Earnings & Valuation

This table compares BCE and BT Group PLC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BCE $17.50 billion 2.46 $6.56 billion $2.44 19.64
BT Group PLC $31.04 billion 1.21 $8.82 billion $1.04 18.14

BT Group PLC has higher revenue and earnings than BCE. BT Group PLC is trading at a lower price-to-earnings ratio than BCE, indicating that it is currently the more affordable of the two stocks.

Dividends

BCE pays an annual dividend of $2.13 per share and has a dividend yield of 4.4%. BT Group PLC pays an annual dividend of $0.95 per share and has a dividend yield of 5.0%. BCE pays out 87.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BT Group PLC pays out 91.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BT Group PLC has increased its dividend for 5 consecutive years. BT Group PLC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares BCE and BT Group PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BCE 12.85% 21.08% 5.78%
BT Group PLC 7.14% 39.24% 6.77%

Insider & Institutional Ownership

43.0% of BCE shares are held by institutional investors. Comparatively, 1.0% of BT Group PLC shares are held by institutional investors. 0.2% of BCE shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

BCE has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500. Comparatively, BT Group PLC has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for BCE and BT Group PLC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BCE 0 4 4 0 2.50
BT Group PLC 3 7 8 0 2.28

BCE presently has a consensus target price of $57.25, indicating a potential upside of 19.49%. BT Group PLC has a consensus target price of $357.94, indicating a potential upside of 1,796.88%. Given BT Group PLC’s higher probable upside, analysts clearly believe BT Group PLC is more favorable than BCE.

Summary

BT Group PLC beats BCE on 9 of the 17 factors compared between the two stocks.

About BCE

BCE Inc. is a communications company. The Company’s segments include Bell Wireless, Bell Wireline and Bell Media. Its Bell Wireless segment provides wireless voice and data communications products and services to its residential, small and medium-sized business and large enterprise customers across Canada. Its Bell Wireline segment provides data, including Internet access and Internet protocol television (IPTV), local telephone, long distance, as well as other communications services and products to its residential, small and medium-sized business and large enterprise customers, primarily in Ontario, Quebec and the Atlantic provinces, while Satellite television (TV) service and connectivity to business customers are available nationally across Canada. Its Bell Media segment provides conventional, specialty and pay Television, digital media, and radio broadcasting services and out of home (OOH) advertising services to customers across Canada.

About BT Group PLC

BT Group plc is a communications services company. The Company is engaged in selling fixed-voice services, broadband, mobile and television products and services, as well as managed networked information technology (IT) solutions and cyber security protection. Its segments include Consumer, which provides fixed-voice, broadband, TV and mobile services; EE, which is a mobile network operator in the United Kingdom and provides mobile and fixed communications services to consumers; Business and Public Sector, which provides communications and IT services to businesses and the public sector in the United Kingdom and the Republic of Ireland (RoI) ;Global Services, which provides managed networked IT services to corporate customers; Wholesale and Ventures, which provides fixed and mobile services to communications providers (CPs); and Openreach, which provides copper and fiber connections between its exchanges and homes and businesses.

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