TSX:RCI.B

Stock Analysis Report

Rogers Communications

Executive Summary

Rogers Communications Inc. operates as a communications and media company in Canada.

Rewards

Trading at 71.7% below its fair value

Earnings are forecast to grow 5.49% per year

Earnings grew by 1% over the past year

Pays a high and reliable dividend of 3.08%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Established dividend payer and fair value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0.5%

RCI.B

2.3%

CA Wireless Telecom

1.6%

CA Market


1 Year Return

-10.6%

RCI.B

0.6%

CA Wireless Telecom

10.0%

CA Market

Return vs Industry: RCI.B underperformed the Canadian Wireless Telecom industry which returned -0.4% over the past year.

Return vs Market: RCI.B underperformed the Canadian Market which returned 10.4% over the past year.


Shareholder returns

RCI.BIndustryMarket
7 Day0.5%2.3%1.6%
30 Day0.2%2.1%2.7%
90 Day-0.5%-2.2%6.4%
1 Year-7.9%-10.6%2.4%0.6%13.5%10.0%
3 Year34.6%23.0%7.6%2.7%17.5%6.8%
5 Year63.9%38.2%75.6%58.9%36.6%16.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Rogers Communications 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: RCI.B (CA$64.98) is trading below our estimate of fair value (CA$229.91)

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


Price To Earnings Ratio

PE vs Industry: RCI.B is good value based on its PE Ratio (16.1x) compared to the Wireless Telecom industry average (21.3x).

PE vs Market: RCI.B is poor value based on its PE Ratio (16.1x) compared to the Canadian market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: RCI.B is poor value based on its PEG Ratio (2.9x)


Price to Book Ratio

PB vs Industry: RCI.B is overvalued based on its PB Ratio (3.4x) compared to the XN Wireless Telecom industry average (2.4x).


Next Steps

Future Growth

How is Rogers Communications forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

4.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RCI.B's forecast earnings growth (5.5% per year) is above the savings rate (1.4%).

Earnings vs Market: RCI.B's earnings (5.5% per year) are forecast to grow slower than the Canadian market (10.3% per year).

High Growth Earnings: RCI.B's earnings are forecast to grow, but not significantly.

Revenue vs Market: RCI.B's revenue (1.7% per year) is forecast to grow slower than the Canadian market (5% per year).

High Growth Revenue: RCI.B's revenue (1.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RCI.B's Return on Equity is forecast to be high in 3 years time (20.4%)


Next Steps

Past Performance

How has Rogers Communications performed over the past 5 years?

12.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RCI.B has high quality earnings.

Growing Profit Margin: RCI.B's current net profit margins (13.8%) are lower than last year (13.8%).


Past Earnings Growth Analysis

Earnings Trend: RCI.B's earnings have grown by 12.7% per year over the past 5 years.

Accelerating Growth: RCI.B's earnings growth over the past year (1%) is below its 5-year average (12.7% per year).

Earnings vs Industry: RCI.B earnings growth over the past year (1%) exceeded the Wireless Telecom industry -35.6%.


Return on Equity

High ROE: Whilst RCI.B's Return on Equity (21.54%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Rogers Communications's financial position?


Financial Position Analysis

Short Term Liabilities: RCI.B's short term assets (CA$4.5B) do not cover its short term liabilities (CA$6.3B).

Long Term Liabilities: RCI.B's short term assets (CA$4.5B) do not cover its long term liabilities (CA$20.1B).


Debt to Equity History and Analysis

Debt Level: RCI.B's debt to equity ratio (186.5%) is considered high.

Reducing Debt: RCI.B's debt to equity ratio has reduced from 292.3% to 186.5% over the past 5 years.

Debt Coverage: RCI.B's debt is well covered by operating cash flow (24.5%).

Interest Coverage: RCI.B's interest payments on its debt are well covered by EBIT (5.3x coverage).


Balance Sheet

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

Debt Coverage by Assets: RCI.B's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

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

3.08%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%1.9%markettop25%5.4%industryaverage5.0%forecastin3Years3.2%

Current dividend yield vs market & industry

Notable Dividend: RCI.B's dividend (3.08%) is higher than the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: RCI.B's dividend (3.08%) is low compared to the top 25% of dividend payers in the Canadian market (5.48%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (49%), RCI.B's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RCI.B's dividends in 3 years are forecast to be well covered by earnings (46.2% payout ratio).


Next Steps

Management

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

2.5yrs

Average management tenure


CEO

Joe Natale (55yo)

2.8yrs

Tenure

CA$11,549,593

Compensation

Mr. Joseph M. Natale, also known as Joe, is a Co-Founder and Managing Partner of Relay Ventures. Mr. Natale has been Chief Executive Officer, President and Director at Rogers Communications Inc. since Apri ...


CEO Compensation Analysis

Compensation vs Market: Joe's total compensation ($USD8.84M) is about average for companies of similar size in the Canadian market ($USD7.32M).

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


Management Age and Tenure

2.5yrs

Average Tenure

Experienced Management: RCI.B's management team is considered experienced (2.5 years average tenure).


Board Age and Tenure

11.4yrs

Average Tenure

61yo

Average Age

Experienced Board: RCI.B's board of directors are seasoned and experienced ( 11.4 years average tenure).


Insider Trading

Insider Buying: RCI.B insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellCA$9,29910 Dec 19
Philip Hartling
EntityIndividual
Shares145
Max PriceCA$64.13
BuyCA$92,82929 Oct 19
Bonnie Brooks
EntityIndividual
Shares1,500
Max PriceCA$61.91
SellCA$13,18425 Sep 19
Philip Hartling
EntityIndividual
Shares200
Max PriceCA$65.92
BuyCA$42,56923 Aug 19
Brent Johnston
EntityIndividual
Role
Senior Key Executive
President of Wireless Division
Shares630
Max PriceCA$67.57
SellCA$39,46801 Aug 19
Anthony Staffieri
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares574
Max PriceCA$68.76
BuyCA$7,499,99903 Jul 19
Rogers Enterprises, Inc.
EntityCompany
Shares106,990
Max PriceCA$70.10
SellCA$24,48124 Jun 19
Philip Hartling
EntityIndividual
Shares351
Max PriceCA$69.75
BuyCA$20,078,03229 Apr 19
Edward Rogers
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares297,000
Max PriceCA$67.60
BuyCA$95,000,01022 Feb 19
Rogers Enterprises, Inc.
EntityCompany
Shares1,301,370
Max PriceCA$73.00
SellCA$95,000,01022 Feb 19
Rogers Enterprises, Inc.
EntityCompany
Shares1,301,370
Max PriceCA$73.00
SellCA$20,000,02922 Feb 19
The Rogers Foundation, Endowment Arm
EntityCompany
Shares273,973
Max PriceCA$73.00
SellCA$1,423,557,44722 Feb 19
Rogers Control Trust
EntityCompany
Shares19,500,787
Max PriceCA$73.00
BuyCA$1,518,557,45722 Feb 19
Rogers Control Trust
EntityCompany
Shares20,802,157
Max PriceCA$73.00

Ownership Breakdown

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


Management Team

  • Graeme McPhail

    Chief Legal & Regulatory Officer and Secretary

    • Tenure: 2yrs
  • Dean Prevost

    President of Rogers for Business

    • Tenure: 2.3yrs
    • Compensation: CA$3.14m
  • Jim Reid

    Chief Human Resources Officer

    • Tenure: 8.4yrs
    • Compensation: CA$2.64m
  • Joe Natale (55yo)

    President

    • Tenure: 2.8yrs
    • Compensation: CA$11.55m
  • Terrie Tweddle

    Senior Vice President of Communications & Social Media

    • Tenure: 5.7yrs
  • Jorge Fernandes

    Chief Technology & Information Officer

    • Tenure: 1.9yrs
    • Compensation: CA$5.42m
  • Tony Staffieri

    Chief Financial Officer

    • Tenure: 7.8yrs
    • Compensation: CA$4.78m
  • Brent Johnston

    President of Wireless Division

    • Tenure: 1.6yrs
    • Compensation: CA$7.54m
  • Glenn Brandt

    Senior Vice President of Corporate Finance

    • Paul Carpino

      Vice President of Investor Relations


      Board Members

      • Phil Lind (75yo)

        Vice Chairman of the Board

        • Tenure: 29yrs
        • Compensation: CA$950.00k
      • Alan Horn (67yo)

        Director

        • Tenure: 14yrs
        • Compensation: CA$252.75k
      • David Peterson (75yo)

        Independent Director

        • Tenure: 28.8yrs
        • Compensation: CA$478.50k
      • Loretta Rogers (79yo)

        Director

        • Tenure: 40.1yrs
        • Compensation: CA$225.00k
      • Melinda Rogers (48yo)

        Deputy Chair

        • Tenure: 2yrs
        • Compensation: CA$501.73k
      • Joe Natale (55yo)

        President

        • Tenure: 2.8yrs
        • Compensation: CA$11.55m
      • Isabelle Marcoux (49yo)

        Independent Director

        • Tenure: 11.8yrs
        • Compensation: CA$511.25k
      • Martha Rogers (46yo)

        Director

        • Tenure: 11.1yrs
        • Compensation: CA$225.00k
      • Edward Rogers (49yo)

        Chairman of the Board

        • Tenure: 2yrs
        • Compensation: CA$1.00m
      • John Clappison (72yo)

        Lead Director

        • Tenure: 1.8yrs
        • Compensation: CA$352.38k

      Company Information

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


      Key Information

      • Name: Rogers Communications Inc.
      • Ticker: RCI.B
      • Exchange: TSX
      • Founded: 1960
      • Industry: Wireless Telecommunication Services
      • Sector: Telecom
      • Market Cap: CA$33.307b
      • Shares outstanding: 510.60m
      • Website: https://www.rogers.com

      Number of Employees


      Location

      • Rogers Communications Inc.
      • 333 Bloor Street East
      • Toronto
      • Ontario
      • M4W 1G9
      • Canada

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      RCI.ATSX (The Toronto Stock Exchange)Class A Common SharesCACADDec 1972
      RCIA.FOTCPK (Pink Sheets LLC)Class A Common SharesUSUSDDec 1972
      RCINYSE (New York Stock Exchange)YesClass B Non-Voting Common SharesUSUSDNov 1979
      RCI.BTSX (The Toronto Stock Exchange)YesClass B Non-Voting Common SharesCACADNov 1979
      RCIBDB (Deutsche Boerse AG)YesClass B Non-Voting Common SharesDEEURNov 1979

      Biography

      Rogers Communications Inc. operates as a communications and media company in Canada. It operates through three segments: Wireless, Cable, and Media. The Wireless segment offers wireless voice and data communication services to individual consumers, businesses, governments, and other telecommunications service providers; postpaid and prepaid wireless services under the Rogers, Fido, and chatr brands; and wireless devices, services, and applications to consumers and businesses. It provides its services to approximately 10.8 million subscribers. The Cable segment provides high-speed Internet, television, voice communication, and smart home monitoring services to consumers, businesses, governments, and wholesale resellers; and operates a transcontinental fiber-optic network that extends approximately 70,000 route kilometers, which provides voice and data communications and advanced services, including data centers and cloud computing to the enterprise, public sector, and carrier wholesale markets. Its service territory covers approximately 4.4 million homes. The Media segment owns the Toronto Blue Jays league baseball team and the Rogers Centre event venue; and offers television and radio broadcasting, multi-platform shopping experience, digital media, and publishing services. Rogers Communications Inc. was founded in 1960 and is based in Toronto, Canada. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/18 23:42
      End of Day Share Price2020/01/17 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      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.