Is a BCE Dividend Boost Coming?

Dec.16.09 | About: BCE Inc. (BCE)

By David Parkinson

BCE Inc. (NYSE:BCE) sent out a media alert a few minutes ago saying it will hold a conference call Thursday morning "to discuss the company’s plans for the use of surplus cash."

Count on it being a dividend increase.

Why would we say that? Well first of all, there are only so many things a company can do with surplus cash. The most obvious? Give some of it back to shareholders. Second, BCE has made it pretty clear that one of its key priorities is steadily increasing the dividend.

And third, a little bird tells us it's going to be a dividend increase. We listen to little birds around here.

If our bird and our intuition is right, this is going to be ahead of schedule - analysts had envisioned that BCE would wait until at least February for a dividend hike, which would have been consistent with the timing of increases announced in early 2007 and early 2009.

It would also market the third time in less than a year that the telecom giant has raised its dividend. It announced hikes last February and last August. The dividend sits at 40.5 cents a share now.

Each of those previous two increases this year were in the 5% range - 2 cents a share, to be precise. Expect this next increase to be on the same scale.