Here are some of the best telecom stocks to consider in Canada.
Canada is known for having strong industries in natural resources like mining or energy. But one industry that is often overlooked by investors is the Canadian telecom industry.
The telecom industry in Canada is effectively an oligopoly. This means that the market is dominated by several strong companies. The industry is similar to railroads and banks in Canada.
Most Canadians will be familiar with the major telecom companies that operate across the country. You may not like their service or pricing, but they can make for solid additions to your Canadian stock portfolio and often pay a generous dividend yield as well.
Best Telecom Stocks in Canada
Financial data sourced in December 2022.
1. BCE Inc
Here are some key facts about this stock:
- Ticker Symbol: BCE.TO
- Market Cap: $58.15 billion
- Dividend Yield: 5.77%
- PE Ratio: 20.64
- 52-Week Trading Range: $55.66 – $74.09
BCE Inc, more commonly known as Bell, is Canada’s largest telecom company, with nearly 10 million mobile customers as of Q3 2022. While its services are available throughout Canada, the company focuses on the markets of Ontario, Quebec, and the Maritime provinces.
Bell owns three major subsidiaries that compose over 80% of its annual revenue: Bell Mobility, Bell Canada, and Bell Media. The company also owns an 18% stake in the Montreal Canadiens and a 37.5% stake in Maple Leaf Sports & Entertainment.
In 2021, BCE reports $18.7 billion in annual revenue across all of its segments. Its Operational Cash Flow of more than $8 billion shows it has plenty of room to continue paying its generous 5.77% dividend yield.
2. Telus Corporation
Here are some key facts about this stock:
- Ticker Symbol: T.TO
- Market Cap: $40.58 billion
- Dividend Yield: 4.92%
- PE Ratio: 19.70
- 52-Week Trading Range: $26.30 – $34.65
Telus Corporation is one of Canada’s largest telecom and technology conglomerates. The company operates subsidiaries for mobility, internet and cable, healthcare, and home security, amongst others.
Its mobile and internet services are offered across Canada, but Telus’ main markets are in British Columbia and Alberta. Its 5G and LTE networks reach 99% of Canada’s total population.
With annual revenue in 2021 topping $13.4 billion and an operating cash flow of more than $4.5 billion, Telus is a profitable company that has continued to show growth. With a strong dividend yield of 4.92%, Telus is an affordable stock with room to grow.
3. Rogers Communications, Inc
Here are some key facts for this stock:
- Ticker Symbol: RCI.B.TO
- Market Cap: $31.55 billion
- Dividend Yield: 3.21%
- PE Ratio: 20.03
- 52 Week Trading Range: $50.53 – $80.85
Rogers Communications is perhaps Canada’s most well-known telecom company. Its roots can be traced all the way back to 1925, although it was officially founded in 1935. Rogers operates mobility, internet and cable, landline, and broadcasting services divisions.
The company has operations across Canada and has been criticized in the past for forming a duopoly with BCE in several provinces. Rogers also holds a major stake in Maple Leaf Sports & Entertainment and owns the Toronto Blue Jays MLB team. It operates one of Canada’s largest sports networks in Sportsnet, which owns broadcasting rights for the NHL in Canada.
In 2021, Rogers brought in a total of $11.7 billion with an operating cash flow of over $4.5 billion. With a 64.94% payout ratio, Rogers’ dividend does have a bit of volatile growth history. Still, at 3.21%, Rogers is a blue-chip Canadian stock for any portfolio.
4. Shaw Communications Inc Class B
Here are some key facts about this stock:
- Ticker Symbol: SJR.B.TO
- Market Cap: $18.35 billion
- Dividend Yield: 3.22%
- PE Ratio: 24.14
- 52-Week Trading Range: $32.96 – $39.49
Shaw Communications is another Canadian telecom company that has operations across numerous divisions. These include mobility, internet and cable, and specialty broadcasting. The company was founded in 1956 in Edmonton, Alberta.
As it operates primarily in Western Canada, Shaw competes directly with Telus and Rogers in British Columbia and Alberta. In fact, back in 2021, Rogers attempted to acquire Shaw, but the merger was eventually rejected by the Canadian Competition Bureau.
In 2022, Shaw reported an annual revenue of about $4.3 billion with about $1.8 billion in operating cash flow. Shaw’s stock is unique amongst the best Canadian telecom stocks in that it pays out a monthly dividend rather than a quarterly one.
5. Quebecor Inc
Here are some key facts about this stock:
- Ticker Symbol: QBR.B.TO
- Market Cap: $6.58 billion
- Dividend Yield: 4.24%
- PE Ratio: 11.22
- 52-Week Trading Range: $23.84 – $32.72
Quebecor, as its name suggests, is a Canadian telecom company that serves the province of Quebec. The company was founded in 1965 and is based out of Montreal.
It has a diversified media platform that reaches 99% of the citizens in Quebec daily. Not only does Quebecor offer broadcasting through its television stations, but it also has several newspapers, including Le Journal de Montreal and Le Journal de Quebec.
Last year, Quebecor earned over $4.5 billion in annual revenue across all its segments. Quebecor currently pays out a 4.24% dividend yield of $0.30 per share every quarter.
6. Cogeco Communications Inc
Here are some key facts about this stock:
- Ticker Symbol: CCA.TO
- Market Cap: $3.43 billion
- Dividend Yield: 4.14%
- PE Ratio: 8.25
- 52-Week Trading Range: $62.35 – $114.66
Cogeco Communications is the first of two Cogeco stocks to close out this list. This branch of Cogeco operates the Canadian and American telecommunication divisions. Within Canada, most of Cogeco’s operations are based in Ontario and Quebec, and in the US, it operates in thirteen different states.
This company is the eighth largest hybrid fibre coaxial cable operator in North America and provides internet and cable services to more than 1.3 million Canadians.
7. Cogeco Inc
Here are some key facts about this stock:
- Ticker Symbol: CGO.TO
- Market Cap: $840.58 million
- Dividend Yield: 4.93%
- PE Ratio: 6.33
- 52-Week Trading Range: $52.06 – $85.00
Cogeco Inc operates several television networks, radio stations, and internet services for Ontario and Quebec.
While it would seem natural to assume that Cogeco Communications is larger because of its higher market cap, Cogeco Inc is the parent company. It owns 83% of the voting rights for Cogeco Communications.
Neither of these companies operates in the top-heavy mobility sector in Canada, and Cogeco remains a strong investment for those bullish on the Canadian cable and internet industry.
How To Buy Telecom Stocks in Canada
When building your long-term portfolio of Canadian stocks, it is important to use a brokerage that saves on commission fees. For the cheapest trading fees and access to all of the best telecom stocks in Canada, consider some of Canada’s best discount brokerages.
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Why You May Want to Consider Investing in Communication Stocks
The telecom industry in Canada does not see much competition, with the companies in this article making up the majority of the market share. While this does not necessarily create the best environment for consumers, it does make these companies safer investments.
As shown in their 52-week price ranges, most Canadian telecom stocks see little volatility and often outperform the broader market. Add in a strong dividend yield, and telecom stocks can be great compounders for your long-term portfolio.
Downsides of Investing in Telecom Stocks
Like many blue-chip or value stocks, Canadian telecom stocks do not provide much in terms of growth. They offset this with a higher dividend payout and stability for your stock account.
Telecom services can be a high-cost business as well. Rolling out new infrastructure to keep up with evolving technology can be a costly endeavour and have an impact on their bottom lines.
Best Canadian Telecom ETFs
For those of you who are unable to decide on which stock to buy, consider our choices for the best Canadian telecom ETFs to own:
- First Trust Indxx NextG ETF (NXTG.TO)
- iShares Global Comm Services ETF (NYSEARCA: IXP)
- SPDR S&P Telecom ETF (NYSEARCA: XTL)
- iShares US Telecommunications ETF (NYSEARCA: IYZ)
- BMO Global Communications Index ETF (COMM.TO)
Conclusion
Whether looking at Canadian telecom stocks or telecom ETFs, the bottom line is that telecom companies make great bedrock investments.
A strong dividend and oligopolistic market make these companies solid, foundational blue-chip investments in the Canadian economy.
Related: Best China ETFs in Canada.
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FAQs
The telecom company with the largest market capitalization in Canada is BCE, Inc. As of December 2022, the stock has a market cap of over $58 billion.
Of the Canadian telecom companies, the group known as the Big 3 include Rogers, Telus, and BCE. These three brands account for a majority of Canadian mobility and internet services.
As of 2022, Telus had the largest fibre optic network and the largest LTE network for mobile services in Canada.
