Q: In the 2008 financial crisis Manulife a good mom and pop steady dividend payer cut its dividend that many small investors depended on and Manulife took over a decade to start to recover. I see BCE much the same as many of its stock owners have depended on it for growth and dividends and is in most Canadian portfolios. These small investors once bitten are unforgiving and will not return. What do you think?
5i Research Answer:
Any dividend cut certainly does impair future sentiment and (likely) valuation. We might argue that MFC's cut was more of a surprise. The company had made a massive bet on equities that nearly threatened the company in the financial crisis. BCE's dividend should be less of a surprise, at least, as investors have discussed it for more than a year now at least.