Rogers Communications Inc's Dividend Analysis
Assessing the Sustainability of Rogers Communications Inc's Dividend
Rogers Communications Inc (NYSE:RCI) recently announced a dividend of $0.5 per share, payable on 2024-01-02, with the ex-dividend date set for 2023-12-07. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Rogers Communications Inc's dividend performance and assess its sustainability.
What Does Rogers Communications Inc Do?
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Rogers Communications is the largest wireless service provider in Canada, with its more than 10 million subscribers equating to one third of the total Canadian market. Its wireless business accounted for more than half of total revenue and has increasingly been providing a bigger portion of total company sales over the last several years. Rogers' cable segment, which provides about 40% of total revenue after acquiring Shaw, offers home internet, television, and landline phone service to consumers and businesses. Remaining sales come from Rogers' media unit, which owns and operates various television and radio stations and the Toronto Blue Jays. Rogers' significant exposure to sports also includes ownership stakes in the Toronto Maple Leafs, Raptors, FC, and Argonauts.
A Glimpse at Rogers Communications Inc's Dividend History
Rogers Communications Inc has maintained a consistent dividend payment record since 2003, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2004, earning it the status of a dividend achiever, a distinction awarded to companies that have a history of increasing their dividend each year for at least the past 19 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Rogers Communications Inc's Dividend Yield and Growth
As of today, Rogers Communications Inc currently has a 12-month trailing dividend yield of 3.31% and a 12-month forward dividend yield of 3.25%, indicating an expected decrease in dividend payments over the next 12 months. Over a five-year horizon, this rate has increased by 0.90% per year, while the past decade has seen an annual dividends per share growth rate of 1.90%. The 5-year yield on cost for Rogers Communications Inc stock is approximately 3.46% as of today.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of Rogers Communications Inc's dividend is often evaluated through the company's payout ratio. The dividend payout ratio reflects the portion of earnings distributed as dividends. With a payout ratio of 1.00 as of 2023-09-30, there is a potential concern regarding the sustainability of the company's dividends. Additionally, Rogers Communications Inc's profitability rank is 8 out of 10, indicating good profitability prospects. The company has also reported positive net income each year over the past decade.
Growth Metrics: The Future Outlook
Rogers Communications Inc's growth rank of 8 out of 10 suggests a strong growth trajectory. The company's revenue per share and 3-year revenue growth rate reflect a solid revenue model, although the annual increase of approximately 1.20% is lower than 59.47% of global competitors. Moreover, the 3-year EPS growth rate and the 5-year EBITDA growth rate suggest underperformance compared to many global competitors, with annual decreases of -3.70% and -2.40%, respectively.
Next Steps
In conclusion, while Rogers Communications Inc has a strong history of consistent dividend payments and is a recognized dividend achiever, the company's payout ratio and growth metrics present a mixed picture. The recent dividend announcement and historical increases bode well for investors seeking steady income. However, the sustainability of these dividends could be challenged if current trends in payout ratios and growth metrics persist. Investors should keep an eye on these factors when considering the long-term viability of Rogers Communications Inc's dividends. For those interested in exploring further, GuruFocus Premium users can utilize the High Dividend Yield Screener to find other high-dividend yield investment opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
