It is no surprise that in Canada we basically have a monopoly on telecommunication companies. Is this good for consumers? Not really, it means that their prices are not very competitive and that we will basically have to pay top dollar for our plans no matter how small it is. Regardless of which provider you go with you are pretty much paying for the exact same thing for the exact same plan(not exact same but pretty close). In Canada we have some of the highest prices in the whole world and it kind of makes sense. Big country, not very many people but still needing big infrastructure has to make up for that with higher prices.
Now lets look at it from the other side, the investor side. Everything I mentioned above that is bad for the consumer is great for the investor. Why is it great? Basically speaking, you could invest in any of the 5 major telecom companies in Canada and you would have made a great investment. One reason is because they are all diverse, they all have Cell service, home phone service, internet and television to provide for you. Those are a lot of services that cost a lot of money to consumers and most providers are at the point now where it does not really cost them that much money to provide those services to you.
So who are the biggest telecom companies in Canada? Well they are Bell(BCE), Telus(T), Shaw(SJR.B), Rogers(RCI.B) and Quebecor(QBR.B). Bell and Telus are both listed on the TSX and on the NYSE. The crazy thing is that Bell is my far the biggest in terms of market cap, they are sitting at a whopping $50.7 billion which is almost double the next closest in Telus who is at a $28.9 Billion. Rogers isn’t to far behind Telus at $22.4 Billion, Shaw at $11.2 Billion and Quebecor at 7.3 Billion.
All 5 have very nice numbers, all their P/E ratios are between 10-20, they are all at positive EPS and they each pay a quarterly dividend except Shaw who pays monthly. Each company is basically reacting to the market in the exact same way, they all took a big hit in the mid to late of February and dropped like a sack of potatoes till mid to late march. But their recoveries have been very promising.
I’m definitely not saying that we are out of the woods yet because there is still so much uncertainty but right now it feels like communication, television and using the internet hasn’t slowed down a bit. I feel that if anything it has increased exponentially. This is why I feel that telecoms are a great way to diversify your portfolio no matter who you decide to go with.
That is all for today and remember everyone, invest in yourself first.