Two 5G Stocks To Buy As CRTC Reverses Wholesale Internet Rates

Summary

  • The CRTC decision is a big win for big telecommunications companies as 2019 prices will be set aside.
  • The flip-flop could also mean higher prices for consumers.
  • Exploring communication stocks could help you make gains in future.

The Canadian Radio-television and Telecommunications Commission (CRTC) has dropped its 2019 decision on wholesale internet on May 27, handing out a major victory to top telecommunication companies in the country.

The regulatory body admitted to making errors while ordering companies to slash their wholesale internet charges.

The CRTC’s decision is a big win for big telecommunications companies as 2019 prices will be set aside and wholesale rates set in 2016 will now remain in effect.

The flip-flop could also mean higher prices for consumers and increased profits for key players in the Canadian market.

As this juncture, investing in communication stocks may lead to future gains. Let's look at the stock and financial performances of two top Canadian companies - Rogers Communications Inc. (TSX:RCI.B) and BCE Inc. (TSX:BCE).

Rogers Communications Inc. (TSX:RCI.B)

The company claims to have more than 10 million subscribers and its wireless business accounted for 60 per cent of total sales in 2020.

One-year chart of stock performance, volume and moving average exponential of Rogers Communications (Source: Refinitiv)

Rogers is the largest wireless service provider in the country and keeping its stock on your watch list could be a good option. Its share prices went up by 1.5 per cent last month and their year-to-date growth is 4.5 per cent. The scrips closed at C$ 61.9 on Thursday, May 27.

The net income for the first quarter of 2021 increased to C$ 361 million and revenue increased to C$ 3,488 million.

BCE Inc. (TSX:BCE)

One of the three big companies in Canada, BCE (previously Bell Canada Enterprises) recently announced the expansion of 5G wireless network for Manitoba communities and is soon going to expand its operations.

With a current dividend yield of 5.9 per cent, BCE pays C$0.875 as a quarterly dividend and its return on equity is 13.6 per cent.

One-year chart of stock performance, volume and moving average exponential of BCE (Source: Refinitiv)

The average daily trading volume of BCE shares was over 2.8 million units in the past 30 days and the stock surged by 3.7 per cent in the past month. Upon market close, BCE scrips were priced at C$ 59.81 per unit.

In Q1 FY21, the company's free cash flow increased by 53.8 per cent year-over-year (YoY) to C$ 940 million and the adjusted EBITDA was C$ 2,429 million, reflecting an increase of 0.5 per cent YoY.

The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.

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