Rogers (RCI.B): A TSX telecom stock to buy as it seeks 911 calls deal?

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Rogers (RCI.B): A TSX telecom stock to buy as it seeks 911 calls deal?

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 Rogers (RCI.B): A TSX telecom stock to buy as it seeks 911 calls deal?
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Highlights

  • Rogers is to invest C$ 10 billion over the course of three years
  • Rogers posted a top line growth of four per cent year-over-year, taking its total revenue to C$ 3.61 billion in Q1 2022
  • Rogers’ net profit climbed nine per cent to C$ 392 million in Q1 2022 compared to Q1 2021

Investors may explore Canadian telecom stocks like Rogers Communications (TSX: RCI.B) for defensive play.

Rogers announced on Sunday, July 24, that it made "meaningful progress" on a formal deal to automatically switch emergency calls between carriers, even in case of an outage. This arrangement came in the wake of a massive outage on July 8 that failed its entire network system and resulted in nationwide disruptions.

The communication company also said it would physically separate wireless and internet services to build a reliable "always on" network to make sure that customers do not face outages of both cellular and internet services in the future. Besides this, Rogers added it would invest C$ 10 billion over the course of three years for more oversight, testing and Artificial Intelligence (AI) to ensure reliability.

With these developments in line, let us look at the financial and stock performances of this telecom company.

Rogers Communications Inc's (TSX: RCI.B) Q1 FY2022 results

Rogers posted a top line growth of four per cent year-over-year (YoY), taking its total revenue to C$ 3.61 billion in the first quarter of fiscal 2022. The telecom giant reported total service revenue of C$ 3.19 billion in the latest quarter, representing a rise of six per cent from Q1 2021.

Rogers’ net profit climbed nine per cent to C$ 392 million in Q1 2022 compared to Q1 2021. The communication service provider noted a free cash flow (FCF) surge of 31 per cent in the latest quarter compared to the same quarter a year ago.

Rogers (RCI.B): A TSX telecom stock to buy as it pursues 911 deal?

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Rogers’ stock performance

The RCI.B stock gained by almost seven per cent in the last nine months. According to Refinitiv findings, the largecap stock held a Relative Strength Index (RSI) value of 45.78 while writing on July 25, representing a moderate market situation.

Rogers recorded a return on equity (ROE) of over 15 per cent, a financial metric that measures profitability.

Bottom line

Long-term investors could explore Rogers Communications for long-term value as it steps up to improve its network infrastructure and works on solutions to responsibly tackle network outages in the future. Passive income seekers could also look into this Canadian telecom stock for dividend income.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

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