Rogers Communications Inc. - Growth & Income

More Canadians signing up for smartphones means more revenue for Rogers Communications Inc (RCI). The communications and media company headquartered in Toronto delivered its 7th consecutive positive earnings surprise driven by gains in its wireless division.

The company also pays a dividend yielding an attractive 3.6% and trades at a discount to its peers. It is a Zacks #2 Rank (Buy) stock.

Third Quarter Results

Rogers reported third quarter earnings per share of 81 cents, beating the Zacks Consensus Estimate by 7 cents. This marked the 7th consecutive positive earnings surprise for the company.

Continued gains in wireless data revenues drove total operating revenue 3% higher compared to the same quarter in 2009. The Rogers retail division saw revenue drop 8% due to declines in video rental and sales.

Meanwhile, total operating profit improved 3% year-over-year while free cash flow grew an impressive 16%.

Growth

Estimates continue to rise as Rogers continues to beat expectations.

The Zacks Consensus Estimate for 2010 is $2.82. This represents a 13% increase over 2009 EPS. The 2011 estimate is currently $3.14, equating to 11% EPS growth.

It is a Zacks #2 Rank (Buy) stock.

Income

Rogers pays a juicy dividend yielding 3.6%. The company produces strong and stable cash flows, so its payout ratio of 44% is very manageable.

Valuation

Rogers trades at 11.1x forward estimates, a discount to the industry average of 17.5x. It also trades at 5.5x cash flow, which is in-line with its peers.

Read the September 16 article here.

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Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.

 
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