Opinions
David Driscoll
COGECO Inc
CGO-T
BUY
Mar 25, 2025
$60.900
Stock price when the opinion was issued
communications
media
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TOP PICK
Second biggest cable supplier in Ontario and Québec, along with 400,000 subscribers in Pennsylvania, Florida and Maryland. The big thing is, it is purely a distributor. It doesn’t have the content, so is indifferent as to which channels you choose to pick and pay for. Trading at 10X earnings and has a 1.9% dividend yield. Share price is down 13% while it is the least affected of any of the telcos.
communications
media
BUY
The issue with the share price is that some of the larger US cable companies are alluding to weak ad business. He thinks it is pretty strong for a Canadian cable company. The cable slowdown is more transient, just affecting the back half of the year. It has a nice yield. The family manages the company fairly well in his view.
communications
media
Are protected from the giants (Rogers et al) because the CRTC is helping CGO get more wire lines. In the US, Cogeco is moving into streaming services, so they don't need to spend as much on capex as the giants. US operations are growing faster than here. So, their debt is lower than the giants. Is like an asset-lite telco. Can increase their dividend 10% annually, unlike Rogers. Pays a 5.5% yield. Low risk at 0.8 beta.