TSX:CGO

Stock Analysis Report

Executive Summary

Cogeco Inc., through its subsidiaries, operates in the communications and media sectors in Canada and the United States.

Rewards

Trading at 74.3% below its fair value

Earnings are forecast to grow 35.09% per year

Risk Analysis

Has a high level of debt

Profit margins (2.8%) are lower than last year (6.7%)



Snowflake Analysis

Adequate balance sheet and fair value.


Similar Companies

Share Price & News

How has Cogeco's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CGO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.8%

CGO

-0.6%

CA Media

-0.3%

CA Market


1 Year Return

67.1%

CGO

19.7%

CA Media

10.7%

CA Market

Return vs Industry: CGO exceeded the Canadian Media industry which returned 19.7% over the past year.

Return vs Market: CGO exceeded the Canadian Market which returned 10.7% over the past year.


Shareholder returns

CGOIndustryMarket
7 Day0.8%-0.6%-0.3%
30 Day3.5%2.6%0.1%
90 Day8.9%5.9%1.7%
1 Year70.7%67.1%24.2%19.7%14.4%10.7%
3 Year97.6%85.1%33.3%17.5%16.0%5.6%
5 Year92.0%72.4%25.0%-0.1%41.5%20.6%

Price Volatility Vs. Market

How volatile is Cogeco's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cogeco undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CGO (CA$103.81) is trading below our estimate of fair value (CA$403.32)

Significantly Below Fair Value: CGO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CGO is poor value based on its PE Ratio (24.7x) compared to the Media industry average (16.4x).

PE vs Market: CGO is poor value based on its PE Ratio (24.7x) compared to the Canadian market (15.3x).


Price to Earnings Growth Ratio

PEG Ratio: CGO is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: CGO is overvalued based on its PB Ratio (2.2x) compared to the CA Media industry average (0.9x).


Next Steps

Future Growth

How is Cogeco forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

35.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CGO's forecast earnings growth (35.1% per year) is above the savings rate (1.4%).

Earnings vs Market: CGO's earnings (35.1% per year) are forecast to grow faster than the Canadian market (10.7% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CGO's revenue (2.2% per year) is forecast to grow slower than the Canadian market (4.9% per year).

High Growth Revenue: CGO's revenue (2.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if CGO's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Cogeco performed over the past 5 years?

11.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CGO has high quality earnings.

Growing Profit Margin: CGO's current net profit margins (2.8%) are lower than last year (6.7%).


Past Earnings Growth Analysis

Earnings Trend: CGO's earnings have grown by 11.4% per year over the past 5 years.

Accelerating Growth: CGO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CGO had negative earnings growth (-55.1%) over the past year, making it difficult to compare to the Media industry average (-2.1%).


Return on Equity

High ROE: CGO's Return on Equity (14%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cogeco's financial position?


Financial Position Analysis

Short Term Liabilities: CGO's short term assets (CA$700.8M) exceed its short term liabilities (CA$403.2M).

Long Term Liabilities: CGO's short term assets (CA$700.8M) do not cover its long term liabilities (CA$4.1B).


Debt to Equity History and Analysis

Debt Level: CGO's debt to equity ratio (133.7%) is considered high.

Reducing Debt: CGO's debt to equity ratio has reduced from 183.3% to 133.7% over the past 5 years.

Debt Coverage: CGO's debt is well covered by operating cash flow (26.6%).

Interest Coverage: CGO's interest payments on its debt are well covered by EBIT (3.6x coverage).


Balance Sheet

Inventory Level: CGO has a high level of physical assets or inventory.

Debt Coverage by Assets: CGO's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Cogeco's current dividend yield, its reliability and sustainability?

1.83%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%2.0%markettop25%5.7%industryaverage3.0%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: CGO's dividend (1.83%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.02%).

High Dividend: CGO's dividend (1.83%) is low compared to the top 25% of dividend payers in the Canadian market (5.68%).


Stability and Growth of Payments

Stable Dividend: CGO's dividends per share have been stable in the past 10 years.

Growing Dividend: CGO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (41%), CGO's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Cogeco's salary, the management and board of directors tenure and is there insider trading?

4.0yrs

Average management tenure


CEO

Philippe Jetté (54yo)

1.3yrs

Tenure

CA$832,851

Compensation

Mr. Philippe Jetté, P.Eng, has been President and Chief Executive Officer of Cogeco Inc. and Cogeco Communications Inc., since September 01, 2018 respectively. He serves as Director of Cogeco Inc. since Ja ...


CEO Compensation Analysis

Compensation vs Market: Philippe's total compensation ($USD0.00) is below average for companies of similar size in the Canadian market ($USD2.15M).

Compensation vs Earnings: Philippe's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.0yrs

Average Tenure

55.5yo

Average Age

Experienced Management: CGO's management team is considered experienced (4 years average tenure).


Board Age and Tenure

1.1yrs

Average Tenure

64yo

Average Age

Experienced Board: CGO's board of directors are not considered experienced ( 1.1 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: CGO insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellCA$52,67219 Nov 19
Philippe Bonin
EntityIndividual
Shares500
Max PriceCA$105.49
SellCA$47,32419 Nov 19
Nathalie Dorval
EntityIndividual
Shares450
Max PriceCA$105.17
SellCA$312,23819 Nov 19
Patrice Ouimet
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares2,942
Max PriceCA$106.50
SellCA$67,93215 Nov 19
Philippe Bonin
EntityIndividual
Shares652
Max PriceCA$104.31
SellCA$30,91415 Nov 19
Elizabeth Alves
EntityIndividual
Shares301
Max PriceCA$102.72
SellCA$42,23615 Nov 19
Luc Noiseux
EntityIndividual
Role
Chief Technology Officer
Senior VP & Chief Technology and Strategy Officer
Shares400
Max PriceCA$105.59
SellCA$60,73023 Aug 19
Luc Noiseux
EntityIndividual
Role
Chief Technology Officer
Senior VP & Chief Technology and Strategy Officer
Shares640
Max PriceCA$94.89
SellCA$72,17819 Jul 19
Christian Jolivet
EntityIndividual
Role
Chief Legal Officer
Senior VP of Corporate Affairs
Shares765
Max PriceCA$94.35
SellCA$29,65719 Jul 19
Andrée Pinard
EntityIndividual
Role
Treasurer
VP & Treasurer
Shares314
Max PriceCA$94.45
SellCA$356,44718 Jul 19
Patrice Ouimet
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares4,000
Max PriceCA$91.24
SellCA$40,24415 Jul 19
Pierre Maheux
EntityIndividual
Shares444
Max PriceCA$90.64
SellCA$1,43813 May 19
Nathalie Dorval
EntityIndividual
Shares20
Max PriceCA$71.90
SellCA$30,25023 Apr 19
Philippe Bonin
EntityIndividual
Shares373
Max PriceCA$81.10
SellCA$28,86001 Mar 19
Nathalie Dorval
EntityIndividual
Shares400
Max PriceCA$72.15
SellCA$27,14301 Mar 19
Elizabeth Alves
EntityIndividual
Shares376
Max PriceCA$72.20

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Louis Audet (68yo)

    Executive Chairman

    • Tenure: 1.3yrs
    • Compensation: CA$5.17m
  • Christian Jolivet

    Senior VP of Corporate Affairs

    • Tenure: 6.1yrs
    • Compensation: CA$1.14m
  • Andrée Pinard

    VP & Treasurer

    • Tenure: 8yrs
  • Rich Shea (57yo)

    CEO & President of Atlantic Broadband Inc

    • Tenure: 4.9yrs
    • Compensation: CA$3.02m
  • Diane Nyisztor (52yo)

    Senior VP & Chief Human Resources Officer

    • Tenure: 4.2yrs
  • Philippe Jetté (54yo)

    President

    • Tenure: 1.3yrs
    • Compensation: CA$832.85k
  • Marie-Hélène Labrie

    Senior VP & Chief Public Affairs and Communications Officer

    • Tenure: 1.1yrs
  • Patrice Ouimet

    Senior VP & CFO

    • Tenure: 5.1yrs
    • Compensation: CA$2.17m
  • Ken Smithard

    President of Cogeco Connexion

    • Tenure: 3.9yrs
    • Compensation: CA$1.80m
  • Luc Noiseux

    Senior VP & Chief Technology and Strategy Officer

    • Tenure: 3.3yrs

Board Members

  • David McAusland (65yo)

    Independent Director

    • Tenure: 21.9yrs
    • Compensation: CA$78.00k
  • Louis Audet (68yo)

    Executive Chairman

    • Tenure: 1.3yrs
    • Compensation: CA$5.17m
  • James Cherry (65yo)

    Lead Director

    • Tenure: 0.9yrs
    • Compensation: CA$133.50k
  • Mary-Ann Bell (59yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: CA$129.50k
  • Normand Legault (64yo)

    Independent Director

    • Tenure: 7.9yrs
    • Compensation: CA$120.50k
  • Philippe Jetté (54yo)

    President

    • Tenure: 1.3yrs
    • Compensation: CA$832.85k
  • Samih Elhage (58yo)

    Independent Director

    • Tenure: 0.9yrs
  • Arun Bajaj

    Director

    • Tenure: 0.3yrs

Company Information

Cogeco Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cogeco Inc.
  • Ticker: CGO
  • Exchange: TSX
  • Founded: 1957
  • Industry: Cable and Satellite
  • Sector: Media
  • Market Cap: CA$1.645b
  • Shares outstanding: 15.99m
  • Website: https://corpo.cogeco.com

Number of Employees


Location

  • Cogeco Inc.
  • 5, Place Ville Marie
  • Suite 1700
  • Montreal
  • Quebec
  • H3B 0B3
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CGOTSX (The Toronto Stock Exchange)YesSubordinate Voting SharesCACADDec 1986
CGEC.FOTCPK (Pink Sheets LLC)YesSubordinate Voting SharesUSUSDDec 1986
76EBST (Boerse-Stuttgart)YesSubordinate Voting SharesDEEURDec 1986

Biography

Cogeco Inc., through its subsidiaries, operates in the communications and media sectors in Canada and the United States. It operates in two segments, Communications and Other. The company provides Internet ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/08 23:33
End of Day Share Price2019/12/06 00:00
Earnings2019/08/31
Annual Earnings2019/08/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.