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

Lots of drama with this name, so why this name? He expects synergies from Shaw. This trades at only 10.5x PE with a 16% growth rate. Too cheap to ignore.

It has been more consistent in execution in the past several quarters. It has a 3 1/2% dividend yield which is lower than Telus and BCE. However its payout ratio is lower at 3 1/2 to 7% and even if it doubled its dividend, its ratio would still be lower.

PE is much cheaper than months ago, but doesn't like the 3.4% dividend. BCE and Telus pay more. Also, they carry a lot of debt. Have lost customers, too.

Higher debt from the Shaw deal is a concern, but they will generate a lot of free cash flow and pay down that debt. They will have a larger footprint. Likes the telco sector for its low valuations. They have a bigger chance to raise their dividend than their peers. Boasts a lot under 7x operating cash flow.

In the telco space, Rogers is cheap and has been ignored, so that's the one to go to.

Passed a big regulatory hurdle. Now they can sit back, look at cutting costs, generating free cashflow, paying down debt, and focus on running the business. Probably a pretty good valuation going forward, now with some built-in growth. 

Very strong business with a safe dividend yield (~3.2%).
Stock performance improving in relation to S & P 500.
Does not own shares at this time.
Legacy assets that are very strong.
Shaw deal approval good for business.

Expects Shaw takeover to be approved. May see pop in the stock, but what next? Lots of shakeup over the last 1.5 years. Board and management turmoil. Wouldn't invest now. He prefers other, more stable telcos. See his Top Picks.

3% dividend, but perhaps a more robust growth rate and more diversified income stream than others. A better bet than Telus.