#1 Canadian Telecom Stock

It’s getting harder to find the best telecom stock.

The communication sector is a stable sector akin to the railway industry where the companies operate in an oligopoly. 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.

Over the years, unfortunately for consumers, the smaller competitors have been absorbed by the bigger telecoms. It’s similar to the banking sector where the big banks started acquiring the online only banks where you could get a higher interest rate.

Telecom Stocks Selection Criteria

How and why do you pick one provider over another is a big question.

First of all, 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 any competitive advantage one company has over the others, below are the questions I ask myself.

  • What is the ability for 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? Is it owning a sports team? Is it owning 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. 

TickerKeyTickerCompanySectorIndustryScoreQuoteMarket CapP/EFPEEPSYield RawYieldPayoutRatioPaymentsDividendChowderGrowthRatingIncomeRatingTollboothAmbassadorAchieverAristocratKingCountryGraph
TSE:BCEBCEBCECommunication ServicesTelecommunication Services0.5560.9255.3722.4022.403.010.05755.751.345043.500.108259Tollbooth - RegulatedNOYESYESNOCanada1
TSE:TTTelusCommunication ServicesTelecommunication Services0.6427.6435.6530.0530.051.020.04584.581.284441.270.110878Tollbooth - RegulatedNOYESYESNOCanada1
TSE:RCI.BRCI.BRogersCommunication ServicesTelecommunication Services0.3163.8132.4720.2720.273.440.03133.130.630942.000.039513Tollbooth - RegulatedNONONONOCanada1
TSE:SJR.BSJR.BShaw CommunicationsCommunication ServicesTelecommunication Services0.3635.6618.0024.9324.931.430.03323.320.8285121.190.034723Tollbooth - RegulatedNONONONOCanada1
TSE:QBR.BQBR.BQuebecor Inc.Communication ServicesTelecommunication Services0.5832.928.0913.9613.962.440.03343.340.387041.100.261453Tollbooth - RegulatedNONOYESNOCanada1
TSE:CCACCACogeco Cable IncCommunication ServicesTelecommunication Services0.68114.405.5214.1014.108.110.02242.240.291042.560.127376Tollbooth - RegulatedYESYESYESNOCanada1
TSE:CGOCGOCogecoCommunication ServicesTelecommunication Services0.6891.101.3510.7110.718.850.02392.390.238242.180.141876Tollbooth - RegulatedYESYESYESNOCanada1

Best Telecom Stocks

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

Below are your top 3 telecom stocks and biggest players in the wireless segment which generates the majority of their profits.

Rogers has decided to not always increase its dividend and re-invest in the company. That can lead to higher stock performance if their investment pays out. The investment into 5G is going to have an impact but it’s not clear if it will put a lot of pressure on the dividend.

Best Telecom Stock
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 is heavily regulated in Canada but not so in the US which gives the advantage Cogeco but as it happens, the Quebec market is dominated by Quebecor 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.

BCE

TSE:BCE Bell Canada Enterprises is Canada’s largest telecommunications company. It provides an extensive range of products and solutions for its customers’ communication needs.

The company owns Canada’s largest network of data centers, retail outlets, as well as Bell LTE, Canada’s national network.

BCE is a leading residential communications provider offering fiber-based Fibe TV and Fibe Internet, Connected Home services and home phones in seven provinces. It also provides national wireless services, and a wide range of business communications services including data hosting and cloud computing across the country.

Bell Canada caters to a diversified customer base which includes retail consumers, businesses and government customers. Moreover, its multimedia company, Bell Media is Canada's premier media company hosting the No.1 sports channel TSN.

The company operates through Bell Wireline (52% of Q4’18 revenues), Bell Wireless (35%) and Bell Media (13%) segments. By revenues, wireline is its largest segment, with revenues comprising of data, voice and other services (90% of wireline revenues) and products (10%).

Investment Data
 

Quebecor Inc.

QBR.B Quebecor Small Quebecor is a leading telecommunications, entertainment and media company in Canada. Quebecor’s media platforms reach 99% of Quebecers every week and it is a leader in the news media, book publishing, music recording, distribution of cultural products.

Almost 55% of the population in Quebec read Quebecor’s newspapers. Quebecor Media Inc. is now a wholly owned subsidiary of Quebecor Inc. and operates through three business segments, telecommunications, media, and sports and entertainment.

Quebecor’s brands are popular due to their high-quality and availability on multiplatform in the form of bundled products. Its Videotron brand is a telecommunications and entertainment leader in Canada.

Videotron has been named as Quebec’s most respected telecommunications provider for the 13th time in a row, while its TVA Network was the most watched network in Quebec. Quebecor has been investing heavily to boost the capacity and speed of its wireline network over the past five years and has continued to roll out ultra-fast service across its service area.

Investment Data
 

Telus

TSE:T TELUS Corp. is a leading telecom company in Canada. It is the second largest in Canada and provides a wide range of communications products and services such as data, IP, voice, television, entertainment, and video.

It is Canada's largest healthcare IT provider. TELUS has a strong presence in the personal, business and healthcare segments which provides a diversified stream of income.

Wireless is the larger segment accounting for 57% of total revenue while the wireline segment constitutes the remaining 43%.

The company has industry leading wireless churn rates of below 1%. TELUS serves more than 13 million customer connections, including 8.9 million wireless subscribers, 1.7 million Internet subscribers, 1.3 million residential network access lines and 1.1 million TELUS TV customers.

TELUS Corporation is a leading network provider catering to 99% of Canadians. The company generates recurring monthly fees from its subscribers, which are growing in number, and is well positioned to benefit from a growing appetite for data.

Investment Data
 

Build Your OWN Top List

My portfolio is generating over 12% annual returns since 2009. It's not from the beginning of the year or from 2019, it's from 2009 !!! That's a consistent return which means using the rule of 72, I double my portfolio every 6 years.

My approach is simple but you need key data that I have cultivated with the Dividend Snapshot Screeners. No other investment services provide you with easy to understand data but also actionable data. No hidden magic.

In fact, I have tried all of the investment services for dividend investors like a crash test dummy of investment services. Just ask me, and you'll learn why there was nothing I could use out there and build the Dividend Snapshot Screeners.

Join 128,000+ Monthly Investors & Build a Winning Portfolio

DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.