During the past few months, interest rates across Canada probed all-time lows, creating more challenges for income-seeking investors. The yield on five-year Canadian government bonds also hit bottom. Bank deposits earn next to nothing. Fortunately, many stocks still offer attractive yields with only moderate risk. A prime example and the top holding in our portfolio is BCE (TSX: BCE; NYSE: BCE), the largest Canadian telecom and media company.

BCE—originally named Bell Canada Enterprises after Alexander Graham Bell—traces its history back to the late 1800s, when it was the Canadian operating division of the U.S.-based American Bell Telephone Company. The modern Bell Canada dominates local telecommunications and broadcasting while hosting a pervasive collection of landline, wireless, Internet and television services that most Canadians depend on.

At the end of 2013, there were 21 million subscribers to BCE services (remember, Canada’s population is only about 35 million). Most popular is the mobile wireless service to which one of every four Canadians subscribes. As part of this service, BCE offers fourth-generation, long-term-evolution wireless technology to more than 80% of the population, powering smartphones for mobile business, gaming and television viewing. The Super Bowl and 2014 Sochi Winter Olympics set new Canadian records for mobile streaming of sports and entertainment.

The typical Canadian uses several BCE services daily. In my workday, for example, I speak to family members, colleagues and friends on my mobile phone, and at least one of those conversations will be with a BCE subscriber through Virgin Mobile or Bell Mobility. Then I’ll watch the fast-moving Bell Business News Network with the suave Catherine Murray and Mark Bunting, swing by BCE-owned electronics retailer The Source during lunchtime to check out the latest deals, and conclude the day watching the news on CTV with Lisa LaFlamme and sports on TSN.

While driving, I may also have listened to Virgin Radio, one of the 106 radio stations BCE owns, or passed some of Bell Media’s 9,500 billboards along the road.

A True Dividend Champion

Aside from its size, BCE offers income-seeking investors the reassurance of steady dividend payments, currently at 4.7%. In fact, the company has a 60-year track record of sustaining and growing dividends. For the past decade, dividends grew an average of 9% per year, comfortably ahead of inflation.

A rock-solid balance sheet and comfortable interest coverage ratios—in other words, plenty of cash and assets to cover the dividend—add to BCE’s strengths. Having said that, I should point out that BCE used up a chunk of its capital in 2014 to buy bandwidth and the rest of Bell Aliant, Eastern Canada’s top provider of TV, Internet, phone and data. That pushed debt levels higher, which should drop as these investments start to pay off.

When they do, investors will reap the benefits of another BCE trait: The company converts a high proportion of its revenue into cash (currently around 32%) to easily cover dividend payments. The consensus calls for earnings and dividends per share to grow around 5% per year for the next two years.

Besides BCE’s excellent dividend-paying credentials, yield-starved investors also benefit from the attractive valuation.

The ratio between BCE’s dividend yield and that of five-year Canadian government bonds is at its highest level in years. So BCE is cheap compared with five-year bonds.

Companies that increase profits and dividends steadily over time, often because they have limited competition and real pricing power, enjoy premium valuations compared with companies that have a more cyclical business. In the world of investment valuations, boring is better.

Select railway, utility and pipeline companies also fall into this elite category. In my view, the top Canadian telecoms also belong in this group with valuations that may eventually mirror those of their elite peers. Currently, BCE trades at a considerable discount ranging between 15% and 30% compared with select railway, pipeline and utility companies.

BCE has three operating divisions: Bell Wireless, Bell Wireline and Bell Media. Apart from those main operating interests, BCE also owns a stake in several interesting and potentially valuable companies.

Maple Leaf Sports

Some of the assets in this portfolio include IT company Q9 Networks, Maple Leaf Sports and Entertainment (which owns the Toronto Maple Leafs along with some prominent real estate), Montreal Canadians Hockey Club and Bell Centre, The Globe and Mail, Virgin Mobile and The Source, with its 700 stores.

Detailed information about the performance of these businesses is hard to come by since BCE acquired them, so an exact valuation isn’t possible. Roughly, their total value amounts to CAN1.7 billion or CAN2.18 per BCE share. The actual total market value could be much higher.

BCE announced in July 2014 that it intends to acquire all the shares that it does not already own in Bell Aliant for around CAN3.95 billion. The transaction should generate additional free cash flow of approximately $200 million a year.

That’s important because BCE has a declared policy of paying dividends based on 65% to 75% of free cash flow. I estimate this transaction could add roughly CAN0.26 of free cash flow per share and CAN0.18 (7%) per share to the annual dividend.

Risks and Compensations

Despite all the positives that support BCE’s share price, investors should consider some risks.

For instance, the Canadian government wants to see more wireless competition and lower costs.

To further this objective, it intends to limit participation of the main telecoms in wireless spectrum auctions and take other measures to increase available airwaves 60% by the end of 2015. The government is also expected to make changes to the current model for TV distribution that may negatively impact TV broadcasters, including BCE’s media division.

In addition, the landline business for most telecoms is declining, and BCE is no exception, with the number of residential lines dropping sharply at the latest measure. Although this decline hurts the overall business, the growth in wireless and high-speed Internet offers compensations.

Lastly, the latest surge in BCE’s share price resulted in part from the sharp decline in fixed-income yields. Interest rates may rise at some point and negatively affect the prices of higher-yielding companies.

U.S. businessman and politician Robert G. Allen once rhetorically asked, “How many millionaires do you know who have become wealthy by investing in savings accounts?”

BCE isn’t without risk, and the share price already appreciated more than 15% over the past six months. In my opinion, though, it still offers income-seeking investors an attractive opportunity outside of low-yielding savings accounts.

The dividend seems secure and should at least grow modestly over the next few years, with the potential for additional growth.

BCE is a Buy up to $49.