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

In a growth phase from buying Shaw, and they really levered up their balance sheet.

Telecom space very hard right now. Interest rates weighing on the business. Regulatory issues not in the companies favor. Paying a strong dividend. Will continue to own. Presenting good value at this price. 

Good company, and likes the space. Does not own shares at this time. Waiting for share price to fall before buying. Expecting a sale on sports assets soon (vertical integration not going well as TV demand falling). If can wait ~5 years, good be a good investment. 

Impressed with execution. #1 in cable and wireless. 5G coast to coast. Stock's dropped along with the others, but forward guidance of 20% on free cashflow is fantastic. Valuation is around 9.5x forward free cashflow. Acquired Shaw, synergies have been realized, took on lots of debt but making strides to reduce it. Yield is 3.7%, very stable.

Its earnings reported last week were in line with expectations although it missed on the media side. They have done their capital expenditures, have consolidated the SHAW assets and are a year ahead of schedule on cost savings. It trades at 6X operating cash flow and more of free cash flow will go to dividend payments. He is not really concerned about there now being 4 players in the wireless space since wireless continues to grow with usage and penetration.             Buy 17  Hold 1  Sell 0

Watching closely. Pattern not great at the moment (falling trend). Would wait if price rises to $60 before buying. Technical trends in favor. 

Not sure all has been sorted out in the boardroom. Tends to be more levered than peers. Yield's not as high as BCE in terms of income.

About 60% of revenue is wireless (largest of its peers), 30% from internet and cable, 10% from media. Took on a material amount of debt, biggest knock against it despite recurring revenue. Technical outages, board succession issues. 

Beginning to see benefits, synergies, and increased scale of Shaw merger. Sees more free cash coming, will help delever balance sheet. Wireless impressive in Q3. Merger will help them take bold steps in 10G in coaxial cable, can really help longer term. 10x 2025 and 16% EPS growth, cheaper than BCE and Telus. On risk/reward the name won't hurt you. Decent yield of 3.2%.

Performing very well in wireless business. Will see benefits of Shaw deal soon. Trading at lower multiple than Telus. Better growth rate than peers. Expecting strong share price performance in 2024. Net subscribers up 18% YoY. Dividend strong for defensive investors looking for safety. 

All telcos are down this year. The valuation has fallen so low that he's buying more shares. The pandemic showed the need to sustain and improve the networks. Rogers and their peers enjoy an oligopoly too.

BCE dividend is north of 7%, while Rogers is not that high. BCE has media assets. Tends to increase dividend every year, so it's a bit more geared to income. For the more conservative and income-focused investor.

They both share the sports teams in Toronto.

Rogers tends to be more focused on the cellular side. With Shaw acquisition, you should see more growth in the West. Cell ads will come. More competition. More growthy and volatile. If you made him pick, he'd choose this one now, as the Shaw acquisition will help grow the company.

Telcos in Canada are in a unique spot. Quebecor has really upped the competitive pressure, positive for the consumer but negative for BCE and Telus. Stay away from those two, and see how things shake out. Prefers RCI.B, with its ability to shave costs from Shaw, or QBR.B.

He targets $47 or 13% lower. It yields 3.7% that they can cover. But the market isn't excited, plus this is sensitive to interest rates. It's only slightly better than BCE. Maybe it's interesting at $41.

It has good penetration into the New Canadian population which is leading to explosive population growth. There has been a lot of noise over the SHAW acquisition but it looks like the integration of the acquisition is going well. It sits at an attractive valuation.    Buy 15  Hold 3  Sell 1