Q: Would you feel it is worthwhile hanging on to Rogers Communications stock? Assume you had a portfolio with a lot of different stock holdings and wouldn't mind reducing that number somewhat. It certainly is cheap at about 8 times earnings, and has a good dividend rate, but is there much of a potential for the stock price over the next 2 - 3 years? The latest earnings report was rather unimpressive and they are forecasting 0 - 3% EBITDA growth next year.
5i Research Answer:
RCI shares are down 35% in the past year as a mix of news and sector aversion resulted in a big sell off. We would today consider it as a hold for income. Sentiment is so negative it would not take much in the way of positive news to move the stock higher. That being said, for a growth-oriented investor we would have no real objection moving on to something else. It may be a longer recovery here, but the 5% yield is likely secure if one is looking for income only.