This is why I think the BT share price is a bargain buy in the stock market crash

first_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Manika Premsingh | Saturday, 23rd May, 2020 | More on: BT-A There are few FTSE 100 stocks whose share price is lower right now than it was on 23 March, when the index touched bottom in the stock market crash. Telecom biggie BT (LSE: BT-A), however, has shown that share price trend. At last close at time of writing, it was 114.7p, which is almost 2.5% lower than on the day. BT share price falls on weak results and dividend suspensionShare price weakness is nothing new for BT. It has been struggling for years now. But I still liked the stock for its double-digit dividend yield, to the extent that I’ve actually bought BT shares. But the Covid-19 crisis and the subsequent stock market crash has taken its toll on dividend payouts across FTSE 100 companies, and BT bit this bullet recently too. It suspended dividends until 2022 citing concerns regarding the impact of Covid-19 on its business. It also said that it would like to use these funds to make investments into BT’s networks. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The BT share price tanked on the announcement, which came with its 2020 results. By the close of the trading day, its share price had fallen by as much at 8.2% from the day before. Of course, slashing dividends wasn’t the only reason that the BT share price fell. Both its revenue and income were down from the year before and it hasn’t given guidance for the next year either. Positives for BTYet, two weeks after the announcement, the BT share price has recovered quite a bit. It’s now up over 8% from then. It’s worth noting, though, that even with this increase it is lower than at the stock market’s absolute bottom. That in itself says to me that there’s room for share price increase going forward. But there are other reasons too. One, if BT’s going to benefit from diverting the funds that would otherwise have gone into paying dividends into capital spending, it’s a positive for investors. Moreover, the company will start paying dividends in 2022. It has also already said that it will pay 7.7p per share. This is lower than the amount suspended, but in terms of the dividend yield, it isn’t bad. At the current share price, this dividend will translate into a 6.8% yield. Share price projectionsNow, two years is a long time. Many FTSE 100 companies that have suspended dividends for now, but at least some of them could start paying them again. What actually happens will depend on the state of the economy and growth prospects. I reckon though, that even then BT’s yield would be quite competitive.According to Financial Times data, analysts forecast BT’s share price to be at an average of 138p one year from now. That looks optimistic going by the trend over the past years. If this plays out and the BT share price remains at this level up to 2022 as well, the yield would still be at 5.6%, even if I bought the share only then. For an investor with at least a three- to five-year horizon in mind, buying the BT share is unlikely to result in a loss. I’d consider buying it today.  Simply click below to discover how you can take advantage of this. Enter Your Email Address “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images. This is why I think the BT share price is a bargain buy in the stock market crashcenter_img Manika Premsingh owns shares of BT GROUP PLC ORD 5P. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. 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