Q: td analysts see this going up 100% this year and also dividend raises. It has done well compared to other canadian telcos and pays a 6.5% dividend and has been raising some 8-10%[just raised 8%]. Am i missing something since bce drops 30% for year and will not raise dividend or possibly cut in future. what is your take on cogeco for future as a dividend investor
5i Research Answer:
We show two analysts covering CGO, one at a hold and another at a buy with an $85 price target (60% upside). One analyst is at a target of $106 with the other at $64. With the low analyst count, we wouldn't put too much weight in theprice target here. CGO is cheap at just under 6X forward earnings but there is not really any growth in the business which is the problem. They tend to be at best mid-to low single digit growth over the years. The dividend looks fine though with a payout ratio of 38% and looks to have plenty of room for increases over time.