By the end of 2015, it’s estimated that nearly 4.9 billion people worldwide will use mobile phones, up 5% from last year. By 2018, it’s projected there will be 5.5 billion users, a 12% increase in a three-year period.

This growth provides a strong tailwind for select telecom stocks. I say “select” because mobile phone usage is not evenly divided across the world. In many countries, the market is already close to saturated. China, India and the United States, for example, have the highest mobile usage, in that order.

In the United States, there are more mobile phones in use than there are people living in the country, as many people have more than one active phone. The U.S. market is also fragmented. There are five major wireless providers and dozens of smaller ones.

#-ad_banner-#The picture is much different north of the border. In Canada, there is far less competition. In fact, there are only three main providers: BCE (NYSE: BCE), formerly known as Bell Canada Enterprises, Rogers Communications (NYSE: RCI) and Telus (NYSE: TU). 

Although Canada’s population and market is smaller than that of the United States, several factors point to strong mobile phone growth ahead. Currently, only about 79% of Canadians use mobile phones. In fact, Canada ranks 38th in cell phone use by country. 

Of the “big three” providers, my favorite is BCE. Not only is it Canada’s largest and most profitable telecommunications provider, but the company also pays the highest dividend among its competitors — $2.04 per share for a current forward annual yield of 2.6%.

At the end of 2014, BCE had nearly 7 million subscribers under contract, a 4.6% increase from the previous year. The number of total wireless subscribers grew 2.5% to 7.9 million last year. Average revenue per user hit $53.81, a 5.5% year-over-year increase thanks in part to higher data usage and fees.

A common problem for telecom companies is that as mobile phone use grows, people cut their landlines. To offset these revenue losses, the company has pushed its “Fibe” wireless fiber optic cable TV and high-speed Internet services. In the fourth quarter of 2014, BCE’s TV subscriber count increased 6.2% to 2.6 million. 

For the first quarter, set to be reported before the market open on April 30, analysts expect revenue of $5.2 billion, 2.1% higher than the comparable year-earlier period. Earnings are expected to decline 3.7% to $0.78 per share. However, for the full 2015 year, analysts expect a 4.4% increase in earnings to $3.32 per share on 4.8% revenue growth.

As I mentioned, BCE offers an attractive yield of 4.6%. This income is highly reliable, as the company issued its first dividend in 1881 and has not missed a payment since. The dividend should also help put a floor under the share price.  

From a technical perspective, BCE is showing strong momentum. 

A major uptrend line can be drawn from the June 2013 low near $35. This trendline currently intersects above $41 and provides strong support, with lateral support near $40 just below.

In early February, BCE hit a multiyear high above $48. Shares then retreated, and a minor downtrend line formed as the stock fell to support near $41. 

After briefly touching support, shares reversed course and broke up through the downtrend line. Since the mid-March low, BCE has rallied as much as 9%, forming a minor uptrend line that intersects the chart just below $44.

The next major resistance is the February peak at $48.27. At current levels, this target presents traders with roughly 9% returns. 

However, if this multiyear peak is penetrated, the stock could move much higher. Analysts following the company project shares could reach as high as $61.71. This target represents potential gains of nearly 40% from recent prices.

Given the bullish technical and fundamental outlook, I plan to go long on this Canadian telecom provider. My target of just below $55 is more conservative but would still provide traders with ample profits. And with the hefty 4.6% dividend yield, traders get paid while they wait.

Unfortunately, the company’s next dividend payment won’t be until this summer, meaning most investors won’t see any income for the next three months. But if you transfer your shares to a high-income brokerage account, you can collect an income payment immediately — as well as every month after that for as long as you hold the stock. Most investors can easily convert their existing brokerage account. If you’d like to learn how, click here.

Recommended Trade Setup:

— Buy BCE at the market price
— Set stop-loss at $39.95
— Set price target at $54.95 for a potential 24% gain by late 2015

This article was originally published on ProfitableTrading.com: The High-Yielding Dividend Stock Even Traders Will Love