Rogers Communications (B) (RCI.B.TO)

The new CEO is going to do good things. They are saying they have to really ramp up their cap-X program. He would prefer T-T as they are way ahead of the pack. It’s a great business and a very profitable sector. You could hang on but be conscious that you may not see such aggressive dividend hikes going forward.

(A Top Pick Jan 5/17. Up 28%.) Has been the leader of the telcos this year. They’ve all done well with new subscriber growth. New management is talking about spending more on the system than what was anticipated. In the shorter term, they are considering selling the Blue Jays, which makes some sense.

T-T vs. RCI.B-T vs. SJR.B-T. He sold T-T last year because of tepid growth and valuation at the top of its range. He sold it to make way for a more cyclical investment. RCI.B-T is the strongest of the telcos. The whole space is expensive.

He owns T-T. However the best Telco today is RCI.B-T with the highest subscriber growth. He does not think interest rate concerns will affect them. Rogers has more room for dividend increases. He holds T-T just because of the significant tax liability so many of his clients have.

A well run company. The areas they are operating in are growing. He can’t see anything that is really going to impede the stock on a growth basis. Not a bad stock to own.

It has done well year to date. It has outdone the rivals more than 20 percentage points. It is arguably the best of the three. It has no wire line business in telcom. It is less exposed in Western Canada. It is trading at about a 14% premium right now. Don’t commit fresh money to this one at the moment.

A symptom of the ailment of Canada, which really started in trying to protect Canadian culture from the Americans. The government tried desperately and futilely to get competition into the market, without allowing foreigners to approach. So essentially, you have a bad product in the end. It has been doing well, and will probably continue to do so. 2.9% dividend yield.

He loved this when everybody hated it. The stock had gone nowhere for years. Now people clearly like the stock, and the stock has gone up to the right. People are addicted to their phones. Even with people reducing cable spending and cutting the cord, the company has done a terrific job of increasing cable and reducing the churn. He doesn’t think this is as undervalued as it was. Feels all the telcos have been bid up because of the consistency of earnings and dividends. He still likes the telcos.

Seasonally it is strong from the middle of October until January and then from the end of February until the end of May. It did not work last year. We are about to enter the period and it is in an upward trend, testing the all time high. If it breaks out it could go to the $75 level. Stick with it or buy some more.

They are going to need new devices for their network. Everybody seems to have a cell phone and are carrying it around. They are going to need new Sim cards on the network to charge with. That is going to be the next phase of growth. It is probably 6-9 months away before you will see this ramp up.

It has a bit better growth than some other telecoms, but it is reflected now. Unless they make an acquisition there is not much growth for them. Hold it for the yield, but it is not that attractive otherwise.

He is diversified in this group. This one has been the outperformer. Now its value is in line with the other three so it is not the screaming buy it was in January. A challenge is the spectrum that is coming up. It is not his favourite of the 4.

Sell Rogers (RCI.B-T) and buy Bell (BCE-T)?A really interesting question, particularly with the 1^st salvo we’ve had from the trade negotiations were the US has said that they want to have greater access to our telecommunications industry. In that case, he’s not sure you want to own any of these. His preference would be with Bell, but only because it is dominant within the wireless industry. He feels Bell would be a little more secure in the longer-term.

A new CEO with a terrific track record. Telus (T-T) is the breeding ground for smart capital allocation. This company has flatlined for years and has been a revolving door for CEOs. If it all works out, he thinks there will be a better cost cuts coming. There has been an improving focus on customer service. Feels the debt is now under control. He is pretty certain there is going to be a dividend increase in 2018. Dividend yield of 3%. (Analysts’ price target is $63.)

This company is going to make a lot of money this year on their NHL franchise. He likes this a lot, because of their diverse streams of revenue. They have a lot of arrows in the quiver. Good dividend.