Investors Step Back Into Rogers, BCE and Telus After a Brutal Stretch for Canadian Telecoms
Analysts at RBC and National Bank say Canada's battered telecom sector may finally be stabilizing, with Rogers emerging as the consensus top pick on deleveraging progress and its sports-media holdings.
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By Principle Post Staff·Published
The Rogers Communications logo illuminated at a company event · Source: Cole Burston/Bloomberg
Canadian telecom stocks are drawing renewed buying interest after two punishing years that saw BCE and Telus both cut dividends to manage debt loads swollen by 5G and fiber spending. Investors who had already been holding BCE and Rogers added to those positions through the recent selloff, while bargain hunters began stepping back into Telus once it slipped under roughly $12 a share. The sector's slump had been driven as much by rising bond yields, which made the stocks' once-reliable dividend yields look less attractive relative to safer fixed income, as by anything specific to the carriers' own operations.
Rogers emerges as the consensus favorite
Analysts at RBC and National Bank of Canada point to Rogers Communications as the sector's top pick, citing accelerating free cash flow, continued debt paydown and a potential windfall from its consolidated sports holdings. Unlike its rivals, Rogers has held its quarterly dividend steady at $0.50 a share since 2019 rather than cutting it, a distinction analysts say reflects a balance sheet that has deleveraged faster than the market has given it credit for.
Telus, for its part, is targeting roughly $2.7 billion in savings through 2028 after trimming its payout, while BCE has leaned on asset sales, including a major tower divestiture, to shore up its balance sheet. Both companies have framed their dividend cuts as one-time resets rather than the start of a longer decline, a claim investors are still testing with each successive earnings report.
The Starlink overhang
Concerns about Starlink's competitive threat still linger over the sector, particularly in rural and remote parts of Canada where satellite broadband is increasingly viable against traditional fixed-line and wireless offerings. None of the Big Three carriers have reported material subscriber losses to satellite internet yet, but analysts say the risk is priced into the stocks more heavily than the current data justifies, which is part of why they now see the sector's valuation as more attractive than its recent share-price performance would suggest.
