Humans are social animals; the driving force that binds the fabric of our world is connectivity. Effective communication and timely sharing of data between a firm and its consumers and between 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.
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 a slew of new competitors. In addition, traditional markets have been turned upside down as mobile service growth outpaces fixed-line service expansion and the Internet begins to supplant 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.
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. 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. CTV, V, TSN, RDS, Crave, Noovo, and iHeartRadio are among Bell Media’s prominent media brands. 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 of 5,685,235, and a dividend yield of 5.243% reflect these stocks’ stability and profitability.
Shaw Communications Inc. (TSX:SJR)
Shaw Communications is a Canadian telecom company that operates in British Columbia, Alberta, Saskatchewan, Manitoba, and northern Ontario. It is 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 is now a nationwide wireless service provider.
On January 26, 2022, the National accessArts Centre (NaAC), Canada’s oldest and largest disability arts organization, announced that Shaw Communications would fund the development of a digital learning platform that will provide virtual resources to connect and inspire and educate artists.
The Company added over 295,000 Wireless customers in fiscal 2021, bringing the total number of consumers to over 2.1 million. Additionally, in the first quarter of 2022, the adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 4.3 percent in the first quarter, while free cash flow increased by $236 million. Trading at $37.40 as of February 25, 2022 (11:37 am), the stocks are a confirmed long-term success as indicated by the dividend increase values. The dividend yield is 3.168%, while the P/E stands at 18.60.
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 across the globe, 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, resulting in enhanced profitability, efficiency, and insights. In addition, Telus is revolutionizing the medical field through new mental health services, virtual care solutions, and virtual pharmacy innovations.
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 is expected to rise by 8 to 10% in 2022, with Free Cash Flow of $1.0 billion to $1.2 billion. Consolidated revenue increased by 20%, Net Income by145%, and Adjusted EBITDA grew by 7.6% in 2021. Trading at $32.285 as of February 25, 2022 (12:04 pm), the company is ranked the third-best in the telecom sector. 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 dedicated to providing 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, which accounts for nearly a quarter of overall sales, provides consumers and companies with home Internet, television, and landline phone service. The company employs about 25,300 people across the globe.
According to Ookla, Rogers is the most consistent national wireless and broadband provider in Canada, 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%. Trading at $65.76 as of February 25, 2022 (12:40 pm), now is the best time to invest in this stock. 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, where it primarily provides mobile and fixed-line services. Quebecor has more than 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 more than 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 developing 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.
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 come to a halt. With the entire market closed, only the internet and online stores could survive the mayhem. 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 came up with 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. The market cap for this sector has already crossed trillions and projected steady growth in the future.
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.
Telecommunication Companies In Canada
BC (TSE: BCE) is also one of Canada’s largest telecommunications companies, with over $4 billion market capitalization. The latest statistics show that Telus is the second-largest telecommunications company in the country, with annual revenues of $1.2 billion and an average annual profit margin of 7.5%. BCE (TSE: BCE), a subsidiary of BCE Inc., the world’s largest telecommunications company.
The company has 54,000 employees, and its shares are traded on the Toronto Stock Exchange with a market capitalization of more than $1.5 billion. The provider also owns several other telecommunications companies, including Telus Canada, Rogers Communications and Rogers Wireless. In addition, BCE (TSE: BCE), the largest telecommunications company in Canada, is owned by the Montreal Canadiens, one of the largest sports and entertainment companies in the world, and owns the second-largest Canadian television network.
Telus, Rogers and Bell are the three national Canadian carriers with a market share of over 40% of the country’s total telecommunications market. Together they serve most of the eastern half of Canada and account for about 40 percent of all wireless services in Canada and about 30 percent in North America. Rogers, Telus and Bell offer a wide range of wireless services and Canada’s two largest mobile operators – owned by the two brands Rogers Communications and Rogers Wireless.
Long Lines is involved with all Canadian telephone companies, including Bell Canada, and the operation of the North American network. In addition to equipping most of the telephone service in Canada and North America that AT & T provides, which provides the bulk of its wireless service, BellCanada has many General Telephone subsidiaries (except its subsidiary) in the United States and Canada.
After two years of a price war, the two companies declared bankruptcy and ceded their telephone systems to the Bell Telephone Company of Canada. Both were reorganized and reorganized – owned by BCE, with BCE majority – which held a majority stake in the company in the United States and Canada and Bell Canada as a subsidiary of BCE.
That competition led to Unitel being on the verge of bankruptcy until three Canadian banks took it over. AT & T Allstream was later bought by MTS Manitoba and is now the primary facility-based interexchange carrier that competes with phone companies. In other words, the acquisition of Clearnet enabled Telus to compete with the two major US and US operators, AT&T and Verizon as the only Canadian operator.
The second major entity is the state-owned Canadian Overseas Telecommunications Corporation (COTc), which handles traffic outside the North American network.
Although the CRTC does not regulate retail prices for resellers of telecommunications services, it conducts public consultations asking them to provide information on the telecommunications services offered by their operators. In addition, although the CRTC does not regulate tariffs directly, it performs a public consultation to gather information on who offers cheap data plans and largely refrains from providing telecommunications services to operators.
TELUS, which we like very much, is first and second in terms of data protection, but its wire segment is in the middle of business, and it has hidden two units in its network. One of the problems with this is that they have two hidden units in their network, and these units are only available to customers with a certain number of subscribers. Telecommunications companies with little privacy relevance include Telus, Rogers, Bell, T-Mobile and Rogers Communications, and AT & T.
Two telephones were installed and leased to the Bell Telephone Company of Canada at around the same time. In the late 19th century, the telephone company Vernon Nelson changed its name to British Columbia Telephone Company Limited, having bought several small telephone companies in the province. AT&T was the company’s American division during the Bell acquisition. Headquartered in Montreal, QC, Bell has roots in Canada since its founding by Alexander Graham Bell. The American companies Bell and Telephon have agreed to transfer their shares to Bell Canada to pay off their debts to AT & T, but the other companies have since overtaken them.
The federal government has granted telecommunications companies several special privileges, such as tax credits, tax breaks and tax exemptions.
For example, in the United States, Northern Telecom was the largest telecommunications company in North America in the early 1990s and the second largest in Canada. The management publicly stated that it was preparing to become the world’s leading telecommunications equipment supplier by 2000. However, many in the telecommunications market remained skeptical, and it began to leave the market in the north. In 1915, over 1,500 telephone companies across Canada took on Bell and expanded the service to areas that had not yet been reached by the phone. Until 1990, Northern was one of the world’s sixth-largest telecommunications companies, with a market capitalization of more than $1.5 billion ($2.2 billion).