Best Telecom Stocks In Canada For February 2024

Dividend Earner

Dividend Earner

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It’s getting harder to find the best telecom stock, or more specifically, our expectations need to be adjusted.

The telecommunication industry is stable, akin to the railway industry, where the companies operate in an oligopoly. Other oligopolies in Canada are energy pipelines and utility companies that feed your home with gas or electricity.

While newcomers are allowed in by leveraging the infrastructure of the big telecoms, they historically have provided a sub-standard service but a lower price.

Unfortunately for consumers, bigger telecoms have absorbed the smaller competitors over the years. This is similar to the banking sector, where the big banks started acquiring online-only banks where you could get a higher interest rate.

Telecoms have also become a utility stock, generating consistent income for investors. Nowadays, children are on the internet from an early age.

Telecom Stocks Selection Criteria

How and why you pick one of these blue-chip stocks over another is a big question.

First, while your experience with one provider can influence your decision, the big telecoms all have the same love/hate relationship with customers.

I have personally been with all three and I would say the promotion of the day has a big influence on customers – and they know that. They have all the data to assess their customer retention.

Aside from attempting to assess one company’s competitive advantage over the others, below are the questions I ask myself.

  • What is the ability of the company to provide attractive bundles to consumers? Can the user have more than one service with the provider? How many consumers does it reach? Mobile can reach all provinces but not the bundles.
  • What’s the secondary business for the telecom? Does it own a sports team? Does it own TV channels? Is it digital streaming? Is it another business?

Once the business is identified, you can assess the dividend yield & dividend growth you might want, as well as the entry point you would like. 

Ticker Ticker Company Market Cap P/E Yield Aristocrat Graph SectorID IndustryID
BCE TSE:BCE BCE 42.53 24.16 8.56 YES 1 2 99
T TSE:T Telus 33.09 43.10 6.95 YES 1 2 99
RCI.B TSE:RCI.B Rogers 29.26 50.99 3.63 NO 1 2 99
QBR.B TSE:QBR.B Quebecor 6.63 9.88 4.52 YES 1 2 99
CCA TSE:CCA Cogeco Cable 2.21 6.29 6.53 YES 1 2 99
CGO TSE:CGO Cogeco 0.46 11.41 7.20 YES 1 2 99

Best Telecom Stocks

BCE has the most robust infrastructure in Canada, but Telus is venturing into the health business. If you want a different play on data, think of Brookfield Infrastructure Partners as it is investing in data infrastructure along with being a utility.

Below are your top telecom stocks and the biggest players in the wireless segment that generate the majority of their profits.

Rogers has decided not to increase its dividend annually and re-invest in the company. That can lead to higher stock performance if their investment pays out.

Best Telecoms June 2023
Dividend Adjusted Chart by Stock Rover - Try it out.

If you are looking for retirement income, stick to Bell. Holding BCE is like holding a bond. If you want a stable holding with growth potential in health and customer support, Telus is your pick. The strategy with Rogers is unclear from my point of view.

As for telecom growth, it’s either from acquisitions which are heavily regulated in Canada but not so in the US, which gives the advantage to Cogeco. However, the Quebec market is dominated by Quebecors and could see more growth from within the province with acquisitions.

Telus remains a top choice for its venture in customer service and telehealth. Your best telecom stock is based on what you need.

Note that screening stocks for income requires unique dividend data. Not many screeners focus on dividend data and dividend strength. You should consider a screener such as Dividend Snapshot Screeners.

TSE T SMALL

Telus

tse:t | Communication Services | Telecommunication Services

TSE QBR B SMALL

Quebecor

tse:qbr.b | Communication Services | Telecommunication Services