Christopher BlumasRogers Communications (B)RCI.B.TOCOMMENTSep 17, 2019

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

He owns BCE. RCI is sideways, and he likes sideways because you can trade within that range of $54-70.

He likes telcos, and Rogers offer the most upside in coming years. With the Shaw deal done, Rogers will start paying down debt and strengthen their balance sheet, increase cash flow and raise their dividend eventually. Likes their valuation and growth. The sector is out of favour, so shares are cheap.

NPI has regulatory issues in Spain. A great stock that needs to be owned longer term by ESG investors. Not much EPS growth for the next couple of years, very expensive valuation.

Cheaper telecom. Synergies coming from Shaw. Nice dividend. Telcos will be facing more competition. 

Risk/reward is good for both, so you can get in and do well, but Rogers is the lower-risk play.

Aggressive price competition is coming, and Rogers has the best competitive response. It can take some costs out of Shaw, but the other players can't do that. 

Excellent company for long term investor.
Shaw deal finally approved.
Telecom will see steady growth going forward.
Tailwinds in the business. 

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.