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Rogers Communications Fundamentals Compared to other Canadian Wireless, Telecom and Cable Companies

By Edited Mar 3, 2016 0 0

Rogers Communications Inc. (TSX:RCI.B) is a well-known Canadian company traditionally engaged in cable operations. Over the past two decades it has expanded to include wireless communications, internet and home phone services in addition to a media operator and owner of the Toronto Blue Jays. It is a widely traded stock both in Canada and the US. This article will compare its investment fundamentals versus other Canadian companies that engage in the same types of services.

The list of competitors includes both traditional Cable companies and traditional Telecom companies as the paths of the two industries have crossed. The goal of a Canadian company is to "own the home" of each household in which they have penetration through a quad play of services - wireless phone, landline phone, internet and TV. With that understood, the list of Rogers' largest competitors is as follows:

BCE Inc TSX:BCE
Cogeco Cable Inc TSX:CCA
Manitoba Telecom Services Inc TSX:MBT
Shaw Communications Inc TSX:SJR.B
Telus Corporation TSX:T


Price to Earnings

CCA......12.3
BCE......12.8
RCI.B...13.7
T..........15.2
SJR.B...16.6
MBT.....18.1

The price to earnings metric is very tight amongst the six companies. CCA does appear the most undervalued under this metric, but not by much.


Price to Sales

MBT......1.0
CCA.......1.5
BCE.......1.5
T...........1.5
RCI.B....1.7
SJR.B....2.4

It's interesting to see that MBT has the lowest P/S but highest P/E which reflects a high cost structure as revenue is not flowing to earnings.


Price to Book

MBT......1.4
BCE.......1.5
CCA.......1.7
T...........2.0
SJR.B....3.2
RCI.B....4.9

Using the P/B metric we see both Shaw and Rogers have valuations far above what's on their balance sheet relative to the telecom companies.


Profit Margin

SJR.B....14.33%
RCI.B....12.60%
CCA.......12.28%
BCE.......11.74%
T...........10.43%
MBT.......5.74%

It is interesting to note that the three telecom companies are at the bottom in margins while the three cable companies are at the top. The issue with the telecom companies is that their high margin cash cows of long distance and landline services are heavily eroding as they are losing market share to the cable companies' phone services, cheaper long distance providers, wireless services and alternative methods of communication like email. They are replacing these revenues with lower margin internet and TV services. Building direct-to-home TV services is very capital intensive so expect these companies to underperform the cable companies on margin for years to come.


Dividend Yield %

MBT.......5.91%
BCE........5.22%
T............4.58%
SJR.B.....4.30%
RCI.B.....3.61%
CCA........1.70%

Again we see a split between the telecom companies and cable companies in terms of dividend yield. There are also other great resources for finding high-paying dividend stocks available on the web.

My investment blog


Disclaimer: The source of the information was taken from TD Waterhouse Market Research services and Yahoo Finance as of December 10, 2010. I do not own any positions in any of the stocks mentioned in this article.

Refer to my other investment articles if you are interested in learning about:

Junior Gold Explorers

Biotech Stocks and Beaten Down Biotech Stocks

Natural Gas

Penny Stocks

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