It’s getting harder and harder to find the best telecommunications stocks.
The communications sector is a stable sector, similar to the railroad industry, where companies operate in an oligopoly. While newcomers are admitted through the use of major telecommunications infrastructure, in the past they have offered sub-standard service but at a lower price.
Over the years, unfortunately for consumers, the smaller competitors have been absorbed by the larger telecommunications companies. It’s similar to what happened in the banking sector where the big banks started buying the online banks where you could get a higher interest rate.
Eligibility criteria for telecommunications stocks
How and why you choose one provider over another is a big question.
First, while your experience with a provider may influence your decision, the major telecommunications companies all have the same love-hate relationship with customers.
I’ve been with all three of them personally, and I’d say the day’s promotion has a huge impact on customers – and they know it. You have all the data you need to assess your customer loyalty.
Aside from trying to evaluate a company’s competitive advantage over the others, the following are the questions I ask myself.
- What is the company’s ability to offer attractive packages to consumers? Can the user have more than one service with the provider? How many consumers does it reach? Mobile can reach all provinces, but not the bundles.
- What is the telecommunications side business? Does it have a sports team? Does it have TV channels? Is it digital streaming? Is it another business?
Once the company is identified, you can evaluate the dividend yield and growth you want, and the entry point you want.
Best telecommunications stocks
BCE has the strongest infrastructure in Canada, but Telus is in the healthcare business. If you want a different game of data, consider Brookfield Infrastructure as it invests in data infrastructure while being a utility at the same time.
Below are your top 3 telecom stocks and the biggest wireless players who make most of their bottom line.
Rogers decided not to keep raising the dividend and investing in the company again. This can result in higher stock performance if the investment pays off. Investing in 5G will have an impact, but it’s not clear if it will put a lot of pressure on the dividend.
If you’re looking for a retirement income, stick with Bell. Holding BCE is like holding a bond. If you are looking for a stable, growth position in health and customer care, Telus is your choice. From my point of view, the strategy with Rogers is unclear.
Telecom growth is either due to acquisitions, which are heavily regulated in Canada but not in the US, which gives Cogeco the edge. However, the Quebec market is dominated by Quebecor and could grow faster through acquisitions within the province.
Telus remains a top choice for its customer service and telemedicine company.
Your best telecom inventory is based on what you need.
Bell Canada Enterprises is Canada’s largest telecommunications company. It offers a wide range of products and solutions to meet the communication needs of its customers.
The company owns Canada’s largest network of data centers, retail stores and Bell LTE, Canada’s national network.
BCE is a leading provider of household communications equipment, offering fiber-optic Fibe TV and Fibe Internet, connected home services and home telephones in seven provinces. It also provides national wireless services and a wide range of business communication services including data hosting and cloud computing across the country.
Bell Canada caters to a diversified customer base that includes residential, corporate and government customers. In addition, Bell Media, its multimedia company, is Canada’s premier media company that hosts the # 1 sports channel TSN.
The company operates in the Bell Wireline (52% of sales in fourth quarter of 18), Bell Wireless (35%) and Bell Media (13%) segments. Wireline is the largest segment in terms of sales. Revenue includes data, voice and other services (90% of landline revenue) and products (10%).
Quebecor is a leading telecommunications, entertainment and media company in Canada. Quebecor’s media platforms reach 99% of Quebecers every week and are leaders in news media, book publishing, music recording and cultural product distribution.
Almost 55% of the Quebec population read Quebecor newspapers. Quebecor Media Inc. is now a wholly owned subsidiary of Quebecor Inc. and operates in three businesses: telecommunications, media, and sports and entertainment.
Quebecor’s brands are popular because of their high quality and availability on multiple platforms in the form of bundled products. The Videotron brand is a leading telecommunications and entertainment provider in Canada.
Videotron was named Quebec’s Most Respected Telecommunications Provider for the 13th consecutive year, while its TVA network was Quebec’s most watched network. Quebecor has invested heavily in increasing the capacity and speed of its landline network over the past five years, and has continued to roll out ultra-fast services across its service area.
TELUS Corp. is a leading telecommunications company in Canada. It is the second largest in Canada and offers a wide range of communication products and services including data, IP, voice, television, entertainment and video.
It is Canada’s largest healthcare IT provider. TELUS has a strong presence in the human resources, business and healthcare sectors and offers a diversified income stream.
Wireless is the larger segment, accounting for 57% of total sales, while the wired segment accounts for the remaining 43%.
The company has industry-leading wireless churn rates below 1%. TELUS serves more than 13 million customer connections, including 8.9 million wireless subscribers, 1.7 million Internet subscribers, 1.3 million private network access lines and 1.1 million TELUS TV customers.
TELUS Corporation is a leading network provider for 99% of Canadians. The company generates recurring monthly fees from its subscribers that are growing in number and is well positioned to capitalize on a growing appetite for data.
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