Higher Buy: BCE Stock vs Rogers Stock

Canada’s telecoms are amongst one of the best long-term options for any portfolio. But which of those telecoms should you concentrate on investing in? Let’s try to reply that query by taking a look at which is the higher buy at once, Rogers (TSX:RCI.B) or BCE (TSX:BCE)

The case for Rogers

Rogers isn’t only a telecom. The corporate boasts a booming media arm that comprises multiple media outlets across the country. The communications and media provider also owns an interest in skilled sports teams and sporting venues.

Telecoms generate a reliable and recurring revenue stream from their subscription-based offerings. Within the case of Rogers, the corporate saw revenue surge 6% in essentially the most recent quarter, to $4.2 billion. A healthy a part of that increase could be attributed to Rogers popular wireless segment.

In essentially the most recent quarter, that wireless segment saw a 37% year-over-year addition of postpaid phone net additions of 193,000.

While Rogers does offer a dividend (more on that in a moment), the corporate has shifted its focus from annual dividend hikes to longer-term strategic objectives. Specifically, the corporate is using funds to take a position in growth and pay down debt.

In consequence, Rogers offers a rather lower P/E of 19.6 over BCE. Certainly one of those growth initiatives is Rogers $20 billion deal to amass its smaller peer, Shaw Communications. Completion of that merger has stretched out for a while but a final decision is anticipated this 12 months.

On completion, Rogers is anticipated to appreciate multiple cost synergies and significant long-term growth potential.

By way of a dividend, Rogers offers a quarterly dividend that has a yield of three.08%. While the yield is lower than BCE, that could possibly be a great thing in a volatile market of rising rates of interest.

As of the time of writing, Rogers trades near flat over the trailing 12-month period, and 12 months so far shows a modest gain of just 2%.

The case for BCE

Like Rogers, BCE also operates a large media arm with TV and radio stations across the country. BCE maintains an interest in skilled sports teams as well.

So then, where does BCE differ, and is it enough to think about it a greater buy?

Prospective income investors will turn before everything to BCE’s quarterly dividend. BCE is certainly one of the few corporations in the marketplace today that has paid out dividends for over a century without fail. This makes it appealing from each an income and a defensive perspective.

By way of a yield, that dividend currently is available in at a juicy 6.33%, which makes it just over double the payout that Rogers offers. It also makes BCE certainly one of the highest-paying dividends in the marketplace.

By the use of example, a $40,000 investment in BCE will earn an income of just over $2,500. For some investors that income potential could also be reason enough to think about BCE over Rogers.

Turning to results, BCE also saw strong wireless growth in essentially the most recent quarter. Specifically, the corporate reported 122,621 net latest activations within the quarter. BCE also saw retail web net activations surge to 201,762 within the quarter. This was the very best figure for the segment in 16 years.

Prospective investors also needs to note that BCE trades down nearly 8% over the trailing 12-month period. This makes it a great time for long-term investors to think about it as a greater buy.

The winner, and higher buy: Rogers or BCE?

Each Rogers and BCE offer similar services and similarly wide moats. They each offer a recurring quarterly dividend, and each offer some type of growth.

Ultimately, it’s that growth vs income point that can influence a preference for one stock over the opposite as a greater buy at once.

Income-seeking investors will little question prefer the juicy 6% yield offered by BCE. Investors with long-term horizons may even appreciate the capability for those reinvested dividends to quickly grow a nest egg.

More conservative investors, in addition to people who prioritize growth, will see Rogers as the higher option. Specifically, the completion of the Shaw merger will unlock significant long-term potential for the corporate. A more conservative tackle dividends can be noteworthy on this current environment.

In my view, BCE’s dividend is just too hard to disregard, but either stock would do well as a small part in a bigger, well-diversified portfolio.

The post Higher Buy: BCE Stock vs Rogers Stock appeared first on The Motley Idiot Canada.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• TFSA Investors: 2 TSX Stocks for a Legit Shot at $1 Million in 20 Years
• 3 Protected TSX Stocks to Buy in an Unstable Market
• Why TELUS Stock Is Dipping to 52-Week Lows (Is it Time to Buy?)
• 5 Things to Know About BCE Stock in February 2023
• Ranked: 4 of the Best Telecom Stocks to Buy for Dividends

Idiot contributor Demetris Afxentiou has positions in Shaw Communications. The Motley Idiot recommends Rogers Communications. The Motley Idiot has a disclosure policy.