Three telecom stocks for dividend investors

Three telecom stocks for dividend investors

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These three Canadian telecom stocks with high dividend yields could be attractive for income investors. 

Collectively known as “Robellus,” Rogers Communications (RCI), BCE or Bell (BCE), and Telus (TU) are the three largest companies in Canada’s mobile carrier market. Despite generating respectable profits and revenue, all three are at yearly lows. It might be time for investors to take a serious look at these high dividend yield firms.

First it's useful to note that Rogers and Telus are at yearly lows in US currency (US$). Thanks to a drop in the Canadian dollar (C$), the share price of these firms has dropped in recent months. Rogers Communications offers an annual dividend of US$1.51 per share, a 4.44 percent yield. In the fourth quarter, Rogers earned C$0.69 per share on revenue of C$3.36 billion. 

Rogers’ stock is not without risk. The firm has invested in content, announcing a 12-year, C$5.23 billion deal to broadcast NHL games in 2013. The move has neither helped nor hurt profits so far. In the fourth quarter, Rogers boosted its consolidated adjusted operating profit margin from 36.0 to 36.6 percent. Wireless profit margin was 42.6 percent while cable was 48.7 percent.

Telus, which is a pure play telecoms firm, demonstrated a record-low postpaid wireless churn rate in its fourth quarter, at just 0.94 percent (download pdf). This measure refers to the portion of customers that leave the provider for whatever reason. Revenue and earnings were up, while free cash flow jumped by 148 percent to C$337 million.

Telus pays an annual dividend of US$1.27 per share, yielding 3.83 percent.

BCE's share prices peaked at US$48.27 this year, and the stock offers an annual dividend of US$2.04 per share. The yield is 4.79 percent. In the fourth quarter, revenue grew 2.7 percent from last year to C$5.53 billion, while earnings were up 2.9 percent to C$0.72 per share.

BCE is not without risk, either. Its content unit, Bell Media, is facing challenges in generating profitability. Last quarter, EBITDA (earnings before interest, taxes, depreciation and amortization) from the division dropped 16.5 percent. Still, Bell’s other main businesses, such as high-speed internet and wireless, increased by a healthy amount. Wireless revenue grew 9.6 percent while the high-speed internet customer count grew 4.7 percent to 2.29 million customers.

Interest rates are at all-time lows, which may make buying low volatility telecom firms in Canada an attractive proposition. 

Written by Chris Lau​​

Click on the interactive chart to view data over time. 

 

All amounts in US$:

1. BCE Inc. (BCE, Earnings, Analysts, Financials): Provides wireline voice and wireless communications services, Internet access, data services, and video services to residential, business, and wholesale customers in Canada. Market cap at $35.77B, most recent closing price at $42.60.

BCE's annual dividend is $2.04 per share, a 4.79 percent yield.

 

2. Rogers Communications Inc. (RCI, Earnings, Analysts, Financials): Operates as a communications and media company in Canada. Market cap at $17.65B, most recent closing price at $34.04.

Rogers' annual dividend is $1.51 per share, a 4.44 percent yield.

 

 

3. TELUS Corporation (TU, Earnings, Analysts, Financials): Provides telecommunications products and services primarily in Canada. Market cap at $20.21B, most recent closing price at $33.20.

Telus' annual dividend is $1.27 per share, a 3.83 percent yield.

 

(List compiled by Chris Lau. Monthly returns data soured from Zacks Investment Research. Dividends, yields and all other data sourced from FINVIZ.)

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3 responses to “Three telecom stocks for dividend investors”

  1. I truly make sure your content within this website have become wonderful and extremely educational and necessary to visitors. This stuff included in the document is incredibly full, clear-cut and can become accounted. I enjoy reading preferably I'm able to present to different readers.

  2. Rodrick Reynolds says:

    I have telecom stocks at the top of my invest list for 2016. I'm long on T, RCI and VZ. I’m also long on this telecom stock http://yhoo.it/1IjHPil. The company has reported an increase in revenues by over 1000% in 2015, and already has a presence in 21 countries, 31 major cities including 16 in the U.S. I'm excited for what's to come in 2016 for this particular company and telecom stocks in general.

  3. dianabolbulk says:

    great article I would like to tell you that you are doing great work by giving investment ideas to the visitors of the website. It is by which it is so popular and good for the sake of telecom investors. Thanks

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