Men in Suits Reporting to Deadpool?
Updated: Oct 4, 2020
"Men in suits look real impressive until you find out they work for people in pyjamas."
-Unknown
Back in 2011, BCE (in partnership with Rogers Communications) purchased the NHL's Toronto Maple Leafs and NBA's Toronto Raptors for $1.3 billion. The main reason for the purchase was to own the rights to stream live content for their sports channels, digital properties and smartphones.
The press release stated "People have wireless devices like smartphones and tablets and they want to watch live sports. Advertisers pay a premium for such viewers. Nobody wants to watch a game two days later".
Fast forward to June 14, 2019 and I saw George Cope, CEO of BCE, with the Raptors management team watching Game 6 in Oracle Arena in Oakland, California. The Toronto Raptors beat Golden State Warriors and won the series. This was the Toronto Raptors (and Canada's) first NBA Championship title.
The Toronto Raptors and Maple Leafs are worth more than $3.5 billion today. This confirms that BCE buying the teams back in 2011 was a smart business decision.
We bought BCE stock several years ago. It's Canada's largest and oldest telecom carrier. Some facts about BCE based on today's date:
Market Capitalization (what the company is worth): $51 billion
2019 Revenue (sales): $24 billion
Total Employees: 52,000
Dividend yield: 6%
Companies it owns: Bell Canada, Virgin Mobile, Virgin Radio stations, BNN Bloomberg, TSN, CTV, Toronto Raptors, Toronto Maple Leafs
In USA a similar but much larger telecom company would be AT&T. The market cap is $215 billion US. It's 2019 Revenue was $181 billion US, employed 248,000 employees and has a
current dividend yield of 7%.
AT&T owns DC Comics which owns iconic characters like Superman, Batman, The Flash and Wonder Woman. It also owns TV shows, including Green Arrow, The Flash, Supergirl and Black Lightning.
So in this case, Superman and Batman have to report to the suits at AT&T who then have to make the shareholders happy. Explains all the superhero movies that keep getting made and released every summer.
We focus and buy shares of companies like BCE because they have a history of growing their dividends over time. BCE paid its first dividend in 1881 and hasn't missed a payment since. In fact, BCE has increased its dividend per share for 11 consecutive years.
Publicly traded corporations such as BCE are made up mainly of Shareholders/Lenders, Managers and Employees.
If you are the shareholder in pyjamas, or Air Jordan/Raptors gear like me, then all employees and managers, including CEO, in the company ultimately report to you.
BCE distributes majority of its profits (more than 60%) in payouts to shareholders. Everyday 52,000 employees and managers at BCE go to work and make this happen. They work hard on increasing sales, keeping costs down and making tough business decisions on a daily basis.
BCE is able to consistently raise dividends because the corporation runs many businesses that have the ability to generate cash in both good and bad times. For example, almost half of BCE's sales and profit comes from their cellphone division. People love their cellphones and use lots of data. Great for BCE shareholders.
If they succeed the dividend grows and the stock price also increases. So far they have done a great job.
Total shareholder return from dividends and capital appreciation from December 31, 2008 has been 311%, with an average annual rate of 14.4%. Most bank accounts pay less than 1% if you leave money in a savings account.
Our BCE dividends get deposited into our bank account every three months so I can buy Raptors gear (my brother likes the Bucks).
BCE isn't the kind of company that will make you rich over night but over the long term it should continue to do well. Anyone of us can buy shares in companies like BCE. We can all be shareholders in pyjamas and have the people in suits report to us. They all fear unsatisfied shareholders. More than bad guys fear Deadpool.