TSX:CGO

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

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


Snowflake Analysis

Adequate balance sheet average dividend payer.


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

3.2%

CGO

1.2%

CA Media

1.6%

CA Market


1 Year Return

-1.0%

CGO

-12.2%

CA Media

-14.5%

CA Market

Return vs Industry: CGO exceeded the Canadian Media industry which returned -11.9% over the past year.

Return vs Market: CGO exceeded the Canadian Market which returned -14.7% over the past year.


Shareholder returns

CGOIndustryMarket
7 Day3.2%1.2%1.6%
30 Day-0.7%-1.3%3.6%
90 Day-10.5%-10.7%-15.0%
1 Year1.0%-1.0%-9.3%-12.2%-11.5%-14.5%
3 Year35.2%26.7%2.8%-8.1%-2.2%-11.3%
5 Year79.2%60.6%17.7%-3.9%11.8%-4.4%

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$83.1) is trading below our estimate of fair value (CA$311.81)

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 (18.2x) compared to the Media industry average (12.5x).

PE vs Market: CGO is poor value based on its PE Ratio (18.2x) compared to the Canadian market (13x).


Price to Earnings Growth Ratio

PEG Ratio: CGO is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: CGO is overvalued based on its PB Ratio (1.7x) compared to the CA Media industry average (0.8x).


Next Steps

Future Growth

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

36.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CGO's forecast earnings growth (36.7% per year) is above the savings rate (1.7%).

Earnings vs Market: CGO's earnings (36.7% per year) are forecast to grow faster than the Canadian market (21.4% per year).

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

Revenue vs Market: CGO's revenue (2.4% per year) is forecast to grow slower than the Canadian market (5.5% per year).

High Growth Revenue: CGO's revenue (2.4% 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?

11.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CGO has high quality earnings.

Growing Profit Margin: CGO's current net profit margins (3%) are lower than last year (4.8%).


Past Earnings Growth Analysis

Earnings Trend: CGO's earnings have grown by 11.8% 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 (-37.3%) over the past year, making it difficult to compare to the Media industry average (50.6%).


Return on Equity

High ROE: CGO's Return on Equity (15.1%) is considered low.


Next Steps

Financial Health

How is Cogeco's financial position?


Financial Position Analysis

Short Term Liabilities: CGO's short term assets (CA$668.8M) exceed its short term liabilities (CA$555.0M).

Long Term Liabilities: CGO's short term assets (CA$668.8M) do not cover its long term liabilities (CA$3.9B).


Debt to Equity History and Analysis

Debt Level: CGO's debt to equity ratio (128.8%) is considered high.

Reducing Debt: CGO's debt to equity ratio has reduced from 184.2% to 128.8% over the past 5 years.

Debt Coverage: CGO's debt is well covered by operating cash flow (29.2%).

Interest Coverage: CGO's interest payments on its debt are well covered by EBIT (3.8x coverage).


Balance Sheet


Next Steps

Dividend

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

2.24%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CGO's dividend (2.29%) is higher than the bottom 25% of dividend payers in the Canadian market (2.1%).

High Dividend: CGO's dividend (2.29%) is low compared to the top 25% of dividend payers in the Canadian market (6.75%).


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 (39.6%), 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

How experienced are the management team and are they aligned to shareholders interests?

3.8yrs

Average management tenure


CEO

Philippe Jetté (54yo)

1.67yrs

Tenure

CA$3,371,615

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 ($USD2.40M) is above average for companies of similar size in the Canadian market ($USD1.77M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Louis Audet
Executive Chairman1.67yrsCA$2.24m0.83% CA$11.2m
Philippe Jetté
President1.67yrsCA$3.37m0.0089% CA$120.7k
Patrice Ouimet
Senior VP & CFO5.5yrsCA$1.44m0.00036% CA$4.9k
Kenneth Smithard
President of Cogeco Connexion4.33yrsCA$1.38mno data
Patrick Bratton
Senior VPno dataCA$1.25mno data
Luc Noiseux
Senior VP & Chief Technology and Strategy Officer3.75yrsno data0.00010% CA$1.3k
Christian Jolivet
Senior VP of Corporate Affairs6.5yrsCA$1.14m0.022% CA$294.1k
Marie-Hélène Labrie
Senior VP & Chief Public Affairs and Communications Officer1.5yrsno data0.00054% CA$7.3k
Elina Tea
Vice President of Corporate Development0.33yrno datano data
Diane Nyisztor
Senior VP & Chief Human Resources Officer4.58yrsno data0.014% CA$182.8k

3.8yrs

Average Tenure

53yo

Average Age

Experienced Management: CGO's management team is considered experienced (3.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Louis Audet
Executive Chairman1.67yrsCA$2.24m0.83% CA$11.2m
Philippe Jetté
President1.67yrsCA$3.37m0.0089% CA$120.7k
David McAusland
Independent Director22.33yrsCA$75.00k0.026% CA$354.5k
Patricia Curadeau-Grou
Independent Director0.33yrno datano data
James Cherry
Lead Director1.33yrsCA$103.13k0.0095% CA$127.5k
Mary-Ann Bell
Independent Director4.33yrsCA$129.25k0.014% CA$195.5k
Normand Legault
Independent Director8.33yrsCA$127.50kno data
Samih Elhage
Independent Director1.33yrsCA$94.00kno data
Arun Bajaj
Independent Director0.75yrno datano data

1.3yrs

Average Tenure

64yo

Average Age

Experienced Board: CGO's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$1.349b
  • Shares outstanding: 15.87m
  • 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
76EDB (Deutsche Boerse AG)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, video, and telephony services; and colocation, network connectivity, hosting, cloud, and managed services. It also owns and operates 23 radio stations; and Cogeco News, a news agency. The company provides its services under the Cogeco Connexion name in Quebec and Ontario; and Atlantic Broadband name in the United States. It serves residential and business customers. The company was founded in 1957 and is headquartered in Montreal, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/26 01:32
End of Day Share Price2020/05/25 00:00
Earnings2020/02/29
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.