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Rogers Communications Inc Shs -B- Non-Voting RCI.B

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Stock XTSE Rating as of
CAD 52.57 +0.72 (1.39%)
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As of Delayed Price Closed
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Company Report

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Rogers Earnings: Solid Results Show No Signs of Waning Strength

Matthew Dolgin

We believe Rogers Communications is extremely undervalued as the market has overly discounted a challenging Canadian telecom industry, where growth for the Big Three incumbents is likely to slow amid heightened competition and fleeting tailwinds. Yet first-quarter results once again exceeded our expectations across many crucial data points, and management expects business to improve further throughout 2024. We’re maintaining our CAD 78 fair value estimate and see narrow-moat Rogers as one of our best ideas.

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Price vs Fair Value

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RCI.B is trading within a range we consider fairly valued.
Price
CAD 51.85
Fair Value
CAD 39.00
Uncertainty
Low
1-Star Price
CAD 66.80
5-Star Price
CAD 89.80
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

With the Canadian wireless market less penetrated than the US and Europe and the country receptive to immigrants and foreign workers, wireless subscriber growth should remain high. As the industry leader, Rogers is well positioned.

Bears

A heavy-handed regulatory environment and competition will prevent Rogers from raising prices substantially, thus damping hopes for material revenue growth.

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Trading Information

Previous Close Price
CAD 51.85
Day Range
CAD 51.98–52.79
52-Week Range
CAD 50.15–66.62
Bid/Ask
CAD 52.52 / CAD 52.60
Market Cap
CAD 27.93 Bil
Volume/Avg
1.6 Mil / 1.7 Mil

Key Statistics

Price/Earnings (Normalized)
11.46
Price/Sales
1.35
Dividend Yield (Trailing)
3.86%
Dividend Yield (Forward)
3.86%
Total Yield
3.88%

Company Profile

Rogers Communications is the largest wireless service provider in Canada, with its more than 11 million subscribers equating to one third of the total Canadian market. Its wireless business accounted for more than half of total revenue and has increasingly been providing a bigger portion of total company sales over the last several years. Rogers' cable segment, which provides about 35% of total revenue after acquiring Shaw, offers home internet, television, and landline phone service to consumers and businesses. Remaining sales come from Rogers' media unit, which owns and operates various television and radio stations and the Toronto Blue Jays. Rogers' significant exposure to sports also includes ownership stakes in the Toronto Maple Leafs, Raptors, FC, and Argonauts.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Core
Total Number of Employees
26,000
Website
https://www.rogers.com

Competitors

Valuation

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Metric
RCI.B
BCE
QBR.B
Price/Earnings (Normalized)
 11.4614.469.93
Price/Book Value
 2.602.473.79
Price/Sales
 1.351.651.23
Price/Cash Flow
 4.475.254.27
Price/Earnings
RCI.B
BCE
QBR.B

Financial Strength

Metric
RCI.B
BCE
QBR.B
Quick Ratio
 0.580.520.41
Current Ratio
 0.770.650.66
Interest Coverage
 1.463.053.17
Quick Ratio
RCI.B
BCE
QBR.B

Profitability

Metric
RCI.B
BCE
QBR.B
Return on Assets (Normalized)
 3.56%3.96%5.79%
Return on Equity (Normalized)
 22.19%16.39%44.26%
Return on Invested Capital (Normalized)
 6.65%6.68%10.47%
Return on Assets
RCI.B
BCE
QBR.B
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