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Rogers’ Dividends Have Fallen vs Telus and Bell, But Rebound Looms: Analyst

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As the quarterly earnings season starts, analysts are placing their bets on the companies they follow. This time around, as Canadian carriers prepare to report their fourth-quarter earnings, Rogers seems to be the preferred wireless player of TD Securities analyst Vince Valentini, and he backs his claim with a few hints (via Financial Post).

Rogers logo svg

While Valentini recommends “buy” for both Quebecor (the parent company of Videotron) and Rogers, he prefers the latter, because Rogers shares have been negatively affected by several surprise events in recent months, such as the $500 million IPTV write-down and delay.

Another thing that affected Rogers’ stock price was the telecom regulator’s ruling that forced incumbents to reduce the wholesale rates independent players pay to access their networks. Rogers is also undergoing a leadership transition, and the quarterly earnings call may bring new information about the start date of the incoming CEO Joe Natale.

These factors have pushed Rogers’ stock price down by 9%, which compares to Telus’ 1% gain and Bell’s 3% drop.

Valentini says Rogers could restore investor confidence if it reports a 3% jump in average revenue per user and wireless EBITDA growth of 4%–5%. He also foresees an up to 5% increase in dividends, but the latter may not happen yet, due to the CEO transition, the analyst said.

He also notes that a continuation of high Capex and an increase in debt leverage at Telus in the fourth quarter of 2016 could make Rogers’ relatively conservative dividend growth and debt-reduction strategy more attractive to investors.

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  • Don

    I had 2 wireless phones with Rogers. Switched to Telus. Much better wireless service overall. They share towers with Bell, so many more available towers to connect to. The Rogers service was so poor in my part of Cambridge, Ont, Rogers actually waived over $200 of my remaining hardware recovery fee.

  • DoctorT

    I noticed the same thing when I switched from Rogers to Telus too.
    Just as a side fact: Bell and Telus only share their 3G towers – not the LTE ones anymore.

  • Chris

    Bell and Telus do share LTE as well. Just look at AWS-1 holdings. Depending on the part of the country, one holds 20MHz and the other holds 10MHz, however, as a Telus client, band 4 is at 30MHz (15×15).
    My limited knowledge (mostly from reading Howardforums . com) understands that Bell and Telus share towers, spectrum for the most part and ran but have different core networks.

  • Brian W Pietrzyk

    Blah blah blah about the numbers. Its the poor customer service that is still what they have not addressed. We had to totally abandon Rogers a few years ago. We could no longer handle the stress they brought into our lives with almost every bill and any attempts to problem solve. Telus/Koodo for the cell phones and Teksavvy for the internet and we’ve never looked back.

    Then my elderly parents moved into a new house and wanted cable. I shuddered when I heard Rogers had the monopoly there. Sure enough, the most gut wrenching frustrating experiance ensued. Not sure how they could mess up something as simple as completing a cable TV installation. It took over a week of bungled hand-offs and missteps, i spend over 5 hours over several calls buffering my parents from the madness. They felt so humiliated they just wanted to give up. Its wasnt until I was forced to go on a #rogerssucks twitter rampage they got the install completed. This was just last week.

    All this about Rogers improving thier service is crap. The staff say things are better and try to help but they get thrown under the buss by the disconnects in thier workflow systems and thier lingering management cuture.

    What a shame to see a Canadian company self destruct from its former glory this way. I feel bad for the employees. How they have survived this long amazes me.

    Yup. Rogers still sucks.

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