Cogeco Communications (CCA-T)

Dividends are not in doubt, but there has to be some way to pay down debt while growing the business. Right now, all you're getting is the dividend but very little growth.

Allowed to hop on Wi-Fi networks of the other telcos, so it's becoming a more asset-light business. Passes through higher margins, and can continue to grow dividend more than 10% a year.

Still adding new money. He uses a name like this to offset higher beta/risk names like CSU and BN in client TFSAs. Due to price competition, telcos haven't grown. Being further tested due to less immigration. Flipside is that a 6-7% yield and a 2-3% price gain would give you a 10% total return.

Problem is all the leverage taken on to build out 5G, but not getting an economic return from it. Because CCA could hop on the fibre network paid for by others, its stock price has gone up, while the others have gone down.

FCF generation has allowed them to raise dividends faster than the other telecoms.

He bought it for the dividend, which grows 10% annually. All the telcos are down because they've had to borrow to upgrade to 5G, and rates have been high. Especially if rates decline, a lot of their debt will fall in the next 2 years and this oligopoly will enjoy profitablility.

Uncertain future, with RCI.B divesting its stake. Tough times with US broadband. Rogers is now in their backyard and ready to compete. Question marks, reflected in the share price. Won't see big dividend growth. Will investing in wireless give them more earnings? Wait a couple of quarters. Yield is 5.6%.

Pays a 6.3% dividend that's growing 10% annually vs. other telcos at 5%. CCA generates better cash flow. The knock is that CCA deals a lot in the US where consumers hop from one carrier to another in search of cheaper phone deals. They're gaining some market share in the US to compete with AT&T and Verizon.

Cheap share price at the moment.
Does not own shares.
Space looking attractive as interest rate come down.
Seem to be struggling with US assets.
Better names in sector (BCE etc.)

The US was a growth driver for them, but are facing more competition there. US telcos are falling as a whole. Also, in Canada there could be the launch of a wireless service without launching a network. And Rogers owns a big stake in CCA, so will Rogers delever following the Shaw deal? These are three overhands that have pressured shares. He prefers CCA's larger peers. Also, telecoms remain weakness.

Extremely compelling on stock price and valuation. You'll probably do OK if you buy now, but lots of overhangs. Intense competition for broadband in US, losing subscribers. Growth is anemic. Debating whether to roll out wireless. Clouds on horizon.

Not a high multiple. Increase in subscriptions. Tailwinds as they build out their network. US side has some issues, and these need to be sorted. Canadian part has done well. Owning here won't hurt you. Yield is 4.6%.

Cheap, nice dividend. Lots of competition from BCE with the fibre to home rollout, and from US markets. Doesn't see growth. Rogers is cheap and has been ignored, so that's the one to go to, followed by Telus.

It enjoyed a bump with the Rogers-Shaw deal greenlight. The last 6 months have seen 3 short-lived uptrends, but an overall downtrend since January. This needs to show an uptrend, or else it'll go sideways.