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Rogers Communications Inc Shs -B- Non-Voting RCI

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Stock XNYS Rating as of
$38.30 +0.41 (1.08%)
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As of Delayed Price Closed
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Company Report

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Rogers, Telus, and BCE: The Selloff is Overdone; We Favor Rogers, but All Three Look Like Bargains

Matthew Dolgin

The Big Three Canadian telecom firms have all sold off substantially over the past month after members of Parliament summoned the three CEOs to testify before a House of Commons committee. The CEOs were grilled on March 18 and the MPs have not yet taken action. While vilifying telecom firms is popular, and consumers undoubtedly desire lower prices, we don’t expect major regulatory changes. We’re maintaining our fair value estimates of CAD 78 for Rogers, CAD 33 for Telus, and CAD 60 for BCE.

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Price vs Fair Value

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RCI is trading at a 35% discount.
Price
$37.89
Fair Value
$51.00
Uncertainty
Low
1-Star Price
$95.10
5-Star Price
$33.70
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 U.S. 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
$37.89
Day Range
$37.75–38.48
52-Week Range
$36.55–50.00
Bid/Ask
$36.03 / $40.53
Market Cap
$20.35 Bil
Volume/Avg
701,481 / 579,673

Key Statistics

Price/Earnings (Normalized)
11.15
Price/Sales
1.40
Dividend Yield (Trailing)
3.89%
Dividend Yield (Forward)
2.84%
Total Yield
3.89%

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
QBR.B
T
Price/Earnings (Normalized)
 11.159.9721.48
Price/Book Value
 2.583.811.98
Price/Sales
 1.401.241.58
Price/Cash Flow
 4.634.296.55
Price/Earnings
RCI
QBR.B
T

Financial Strength

Metric
RCI
QBR.B
T
Quick Ratio
 0.710.410.54
Current Ratio
 0.890.660.67
Interest Coverage
 1.593.171.82
Quick Ratio
RCI
QBR.B
T

Profitability

Metric
RCI
QBR.B
T
Return on Assets (Normalized)
 3.73%5.79%2.47%
Return on Equity (Normalized)
 22.52%44.26%8.37%
Return on Invested Capital (Normalized)
 6.69%10.47%5.34%
Return on Assets
RCI
QBR.B
T
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Telecom Services Industry Comparables

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Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
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Comcast Corp Class AMzzxkqtcsFny$154.8 Bil
T
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DTEGY
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KDDI Corp ADRHxbzvbvtqYjdxl$56.8 Bil
AMX
America Movil SAB de CV ADR - Series BWmqwxbrpCpbpv$55.8 Bil
CHTR
Charter Communications Inc Class AKhvbmdkfVvrrcgb$37.5 Bil
ORAN
Orange SA ADRWyfzhsxyMylbp$29.8 Bil
BCE
BCE IncVvskdxpgHyhtnz$29.3 Bil

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