Best Canadian Telecom Stocks

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Humans are social animals; the driving force that binds the fabric of our world is connectivity. Effective communication and timely data sharing between a firm and its consumers, company authorities, and other staff is the backbone of any business. With globalization, the civilization of uninhabited land, and the expansion of societies, the distances between humans grew. Thus, this basic necessity manifested itself in the form of the telecommunications industry, which has become the best telecom stocks in Canada. 

Companies in the telecommunications sector make communication possible worldwide, whether through the phone or the Internet, through wires, or wirelessly. These businesses built the infrastructure, allowing data to be transferred anywhere in the world through words, audio, or video. Telephone operators, satellite companies, cable companies, and Internet service providers are the leading corporations in the sector.

The industry has been swept up in rapid liberalization and innovation since the early 2000s. Government monopolies have been privatized in many nations worldwide, and they now confront many new competitors. In addition, traditional markets have been turned upside down as mobile service growth outpaces fixed-line service expansion and the Internet begins supplanting voice as the primary business.

5 Canadian Telecom Stocks You Should Invest In

Here are the top Canadian telecommunication stocks to invest in if you want to be sure you’ll make money since they are mostly Long-Term Stocks to Buy Now.

BCE Inc. (TSX:BCE)

BCE is an Internet service provider offering wireless broadband, television, and landline phone services in Canada. With roughly 10 million customers, it is one of the big three national wireless carriers, accounting for approximately 30% of the market and one of the top Canadian 5G Stocks to Invest In. It is also the ILEC (incumbent local exchange carrier—legacy telephone provider) in Canada’s eastern half, including Ontario and Quebec, the two most populous provinces. Bell Media’s prominent media brands are CTV, V, TSN, RDS, Crave, Noovo, and iHeartRadio. In addition, the company is a significant investment in Canadian content creation, including local television and radio news, sports and entertainment programming, and other original TV and film projects.

Bell acquired Longueuil-based internet provider EBOX  on Feb. 24, 2022. In addition, Bell was named the fastest 5G network in the country for the second year in a row at the Ookla® 2021 Speedtest Awards. By the end of 2021, Bell had met its goal of providing 5G coverage to more than 70% of the Canadian population.

The fourth quarter cash flows from operating activities increased 6.9% to $1,743 million, resulting in a $236 million rise in free cash flow year-over-year. Trading at $66.76 as of February 25, 2022 (11:11 am), the stock is bound to rise. Furthermore, a market cap of 60,688,514,738, a trading volume 5,685,235, and a dividend yield of 5.243% reflect these stocks’ stability and profitability.

 

Telus Corporation (TSX:T)

TELUS is a fast-growing, global communications and information technology firm with $16 billion in annual revenue. With about 90,800 employees globally, the company serves 15.2 million customers across wireless, broadband, IP, voice, television, entertainment, video and security, healthcare, and agriculture. For example, the agriculture sector provides interconnected farm management systems, enhancing profitability, efficiency, and insights. In addition, Telus is revolutionizing the medical field through new mental health services, virtual care solutions, and virtual pharmacy innovations to become the top of Telehealth Stocks in Canada.

With six Mobile Experience Awards and three 5G Mobile Experience Awards in 2021, TELUS once again leads the industry. In addition, UK-based Opensignal named TELUS the fastest mobile network experience for the eighth consecutive time. The year 2021 concluded with record total net customer additions of 960,000, reflecting the potency of its expansive PureFibre network capabilities.

Operating Revenue and Adjusted EBITDA are expected to rise 8 to 10% in 2022, with a Free Cash Flow of $1.0 billion to $1.2 billion. Consolidated revenue increased by 20%, Net Income by 145%, and Adjusted EBITDA grew by 7.6% in 2021. The company is ranked the third-best in the telecom sector, trading at $32.285 as of February 25, 2022 (12:04 pm). The dividend yield of 4.098% is good enough to ensure a sustainable profit.

 

Rogers Communications Inc. (TSX:RCI)

Founded in 1960, Rogers Communications has become a premier technology and media organization that provides Canadians and Canadian businesses with the finest wireless, home, and media services. It is Canada’s largest wireless service provider, with over 10 million users accounting for one-third of the country’s overall market. Rogers’ wireless business accounted for 60% of the company’s overall sales in 2021. Rogers’ cable division accounts for nearly a quarter of overall sales. It provides consumers and companies home Internet, television, and landline phone service, making it one of the Best Canadian Defensive Stocks. The company employs about 25,300 people across the globe.

Rogers has also successfully merged with Shaw to become the primary telecom services provider in Canada.

According to Ookla, Rogers is Canada’s most consistent national wireless and broadband provider, with the fastest Internet in Ontario, New Brunswick, and Newfoundland & Labrador. In addition, Casa Systems Inc. (Nasdaq: CASA) announced on February 17, 2022, that Casa Systems’ virtual convergent cable access platform (vCCAP) and distributed access architecture (DAA) solutions are powering Rogers’ next-generation broadband services.

 In 2021, wireless postpaid net subscriber additions included the addition of 141,000 new phones, growth of wireless service revenue by 6%, and adjusted EBITDA rise of 5%. The best time to invest in this stock is trading at $65.76 as of February 25, 2022 (12:40 pm). The P/E ratio of 19.80 and the dividend yield of 3.03% prove the profitability of this company and the growth potential it holds.

 

Quebecor Inc. (TSX:QBR)

Quebecor is the leading telecom operator in Quebec, primarily providing mobile and fixed-line services. Quebecor has over 1.8 million Internet members and serves more than 60% of the houses that transit via its network. It also has about 1.6 million mobile subscribers, accounting for over 20% of Quebec’s wireless market.

On November 11, 2021, Quebecor announced the formation of asterX, a new corporate venture capital arm that will continue to develop long-term relationships with growing enterprises. Quebecor has worked with roughly ten unique start-ups in fields ranging from AdTech to MedTech in the last year, investing millions of dollars in each.

In the third quarter of 2021, the revenue was $1.15 billion, up to $36.5 million (3.3 percent) from the same period in 2020. In addition, cash flows from operations saw an increase of $19.7 million (a 5.7% increase), while the net cash flow was $365.8 million. Trading at $27.90 as of February 25, 2022 (1:13 pm), the prospects for this company seem bright. With a market valuation of $6,714,345,394 and a P/E ratio of 13.60, this firm can deliver a good return on investment.

Cogeco Inc. (TSX:CGO)

Cogeco Inc. (TSX:CGO) presents a unique investment opportunity within the Canadian telecom sector. Cogeco has carved out a significant niche in these markets as a key regional player, particularly in Ontario and Quebec. The company offers a comprehensive range of services, including internet, video, and telephony, catering to residential and business customers. Its smaller size compared to national giants like BCE, Telus, and Rogers allows for potentially greater agility and responsiveness to local market needs. For investors, Cogeco’s focus on regional service could translate into a stable customer base and consistent performance, especially in areas with a strong market presence.

Shaw Communications Inc.

Shaw Communications (Now “Rogers, Together With Shaw) was a Canadian telecom company that operates in British Columbia, Alberta, Saskatchewan, Manitoba, and northern Ontario. It had become one of the largest providers of industry-leading Internet, Mobile, Television, Satellite, and Business connectivity solutions in these regions. Following the acquisition of Wind Mobile in 2016, Shaw was also a nationwide wireless service provider.

In 2023, “Shaw was amalgamated with Rogers and all of its common shares were delisted from the TSX-V, the TSX and the NYSE on or about April 4, 2023.”

By allowing this merger, the Canadian government sure is keen on increasing competition in internet and mobility services, eh?

Understanding Telco Stocks Canada

The Canadian telecommunications sector is at a pivotal juncture, marked by rapid technological advancements, a complex regulatory environment, intense competitive dynamics, and strategies for global expansion. Understanding these aspects is crucial for comprehensively analyzing the sector’s investment potential. The market cap for this sector has already crossed trillions and projected steady growth in the future, especially with Canadian AI stocks on the rise.

Technological Innovations

Canadian telecom companies invest in cutting-edge technologies to stay competitive and meet evolving consumer demands. Key areas of focus include:

  • 5G Deployment: Companies are aggressively rolling out 5G networks, promising faster speeds and more reliable connections, which are critical for the next generation of digital services.
  • Internet of Things (IoT): Investment in IoT technology is enabling smarter homes and cities and opening new revenue streams in sectors like healthcare, agriculture, and industrial automation.
  • Artificial Intelligence (AI): AI is leveraged for enhanced customer service, network optimization, and predictive maintenance, driving efficiency and improving user experiences.

Regulatory Environment

The regulatory landscape in Canada plays a significant role in shaping the telecom industry:

  • Policy Frameworks: Regulations around spectrum allocation, market competition, and consumer protection significantly influence telecom companies’ operational capabilities and strategic decisions.
  • Competition Concerns: Regulatory bodies are vigilant about maintaining healthy competition, particularly in light of significant mergers and acquisitions, such as the Rogers-Shaw merger.

Competitive Landscape

A mix of intense competition and cooperative dynamics characterizes the Canadian telecom sector:

  • Market Dominance: Large players like BCE, Telus, and Rogers dominate the market, but regional players like Quebecor and Cogeco also hold significant sway in their respective areas.
  • Emerging Competitors: New entrants and smaller companies challenge the status quo, bringing innovation and competitive pricing.

Global Expansion

Global expansion strategies are becoming increasingly important:

  • International Partnerships: Some Canadian telecom companies are forming alliances with global players to expand their reach and tap into new markets.
  • Diversification: By venturing into international markets, these companies seek to diversify their revenue streams and reduce dependence on the domestic market.

The Canadian telecom industry is evolving rapidly, driven by technological innovation, regulatory shifts, competitive pressures, and global expansion efforts. For investors and stakeholders, understanding these dynamics is critical to assessing the sector’s future trajectory and investment potential.

Why Should You Invest in Telecom Stocks in Canada

Like any other industry, Telecom has had its ups and downs, but it is the one industry that has continued to thrive despite the world being hit by a pandemic. The demand and desire for communication soared throughout the COVID-19 lockdown period since physical interactions had stopped. Only the internet and online stores could survive the mayhem with the entire market closed. As a result, cinemas became obsolete, and online streaming platforms and services gradually replaced them. All in all, the need for the Internet grew, and so did the market. In the relentless modern competition, the companies developed innovative solutions to stay relevant, further adding to the market. It is no wonder that under such circumstances, the telecom industry has made tremendous strides in such a short time, and it continues to grow at a breakneck speed.

Telecommunications stocks aren’t the kind of investments that make you rich overnight. On the other hand, Telecoms can be excellent investments for long-term investors seeking stability, consistency, and predictability in their portfolios in an uncertain market. Due to an ongoing health crisis, historically high global debt levels, and an uncertain political future in the United States, many investors are looking for blue-chip stocks to invest in.

Most telecommunications stock holds the two most attractive characteristics: high dividend yields and stable, predictable earnings. With interest rates on the verge of zero, this is an excellent opportunity to invest in the telecoms business and ensure a bright future.

The Bottom Line

As the internet becomes more accessible to the masses, the market for internet-enabled products expands. Consequently, the demand and business opportunities for telecommunications companies would skyrocket. As a result, Telecom is a stable and highly profitable long-term investment.

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