Barron’s Says That BCE (BCE) Most Appealing Among North American Telecoms

Barron’s reports that Canada’s BCE, Inc. (NYSE: BCE) is a better bet among North American telecom players than the United States’ AT&T (NYSE: T), and Verizon Communications, Inc. (NYSE: VZ).

With a market value of C$23 billion, and 2009 revenue of C$17.7 billion, BCE booked an EBITDA of C$7 billion, C$1.46 billion of which was free cash flow (FCF) for dividend payouts, and share repurchase. Earnings per share were up 11% to C$2.50 last year, and company guidance pegs EPS at C$2.65 to C$2.75 for 2010.

By contrast, AT&T, and Verizon are expected to have flat to slightly lower earnings. BCE expects FCF to rise to C$2 billion, this year. This will allow BCE to raise its dividend, which it did three times in 2009 to C$1.74 per share. The shares could easily trade 10% higher over the next year, offering a high-teens-percentage total return.

Morgan Stanley (NYSE: MS) analyst Simon Flannery puts the target price at C$31, with a potential upside of C$40.