Q: Seen most of my Telecoms including Telus and Rogers depreciating in value, is this a lack of confidence in these investments?
Do you believe the dividend rates will might be cut?
Long term, do you feel a recovery is in sight?
Thanks in advance for your great service! Ted
Do you believe the dividend rates will might be cut?
Long term, do you feel a recovery is in sight?
Thanks in advance for your great service! Ted
5i Research Answer:
We have numerous comments on this in the Q&A forum. Capital spending in the sector is high, and growth is low. Investors worry about high interest rates and there are competing securities with no risk (GICs) that offer high yields. We think BCE and T can be slowly accumulated. Sentiment is low, but could change. Interest rates may move lower. The industry in Canada remains an oligopoly with little real competition. We do not believe BCE, T or RCI.B's dividend is at any real risk in the medium term.