Roger That

Rogers Communications recently announced that it is doubling its annual common share dividend to $1 from 50 cents, effective immediately.

The Toronto-based cable TV, broadcasting and publishing company also announced that it plans to buy back up to 15 million of its Class B shares or $300-million worth, whichever is less.

Rogers Communications shares closed down -5.75% Monday and analysts believe investors misinterpreted the results and put too much emphasis the slightly lower wireless adds, while the focus should be on a more important milestone:

Rogers doubling its dividend from $0.50 to $1.00/share (2% yield) and announcing a $300 million share buyback, the first in company history.

It is believed that the wireless business is still in great shape and investors should look to RCI’s trend of returning capital, growing free cash flow and providing shareholder value.

Rogers is trending away from being a higher risk investment into a blue-chip stock:

  • Consistent profitability
  • Decreasing debt
  • Return capital (as evidenced by this announcement)

Although wireless results were less than expected, the business is still in strong shape.

With the advent of “number portability” in Canada in March of 2007, Rogers has gained over 50% market share.

What do you think?


  1. I agree with your assessment here. Rogers is in a very good position in Canada currently and I might start to watch the stock if the valuation gets down a bit. The emphasisi on dividend growth really gets me interested.

    Interestingly Telus, which I own, is talking about building their network into GSM as opposed to CDMA, which is old technology.

  2. I am a bigger fan of Telus that Rogers, but doubling a dividend is a great way to get some attention!
    Thanks for the comment.

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