Rogers Communications (RCI - Analyst Report) offers investors stable growth, a decent dividend, and exposure to the fast-growing wireless data business in Canada. At the same time, the company's strong cost controls in both its wireless and cable businesses is helping improve profit margins.RCI is a Zacks #2 Rank stock. It trades at 12.5x 2010 consensus estimates and 11.6x consensus estimates for 2011.
Growth and Income
Analysts estimate that Rogers Communications will generate EPS growth of 7.5% in 2010, 7.5% in 2011 and 10.6% per year for the long-term. In addition, RCI shares have a dividend yield of 3.8%.
Business
Rogers Communications is a communications and media company in Canada. The company operates through three segments: wireless, cable, and media.
First-Quarter Results
On April 28, the company announced consolidated revenue of $2.9 billion, an increase of 5.1% from the year-earlier period. RCI earned $0.69 per share, easily beating the Zacks Consensus Estimate by 14 cents, or 25.5%.
The company has beaten the Zacks Consensus Estimate in each of the last five quarters by an average of 25.5%.
For 2010, Rogers maintained its guidance. The company expects consolidated revenue of $11.1 billion to $11.4 billion, consolidated EBITDA of $4.48-$4.70 billion, and free cash flow of $1.94-$2.04 billion.
Estimates
Analysts took that as a positive sign. After the company's first-quarter report, the Zacks Consensus for 2010 increased 20 cents, or 8.0%, to $2.70, and the Zacks Consensus for 2011 climbed 13 cents, or 4.7%, to $2.90.
The Chart
RCI shares are up about 35% since bottoming in July 2009. The stock has been in a fairly solid uptrend for the last seven months. It touched a new 52-week high on May 3, but has sold off with the rest of the market over the last month. It is now roughly 9% below its 52-week high.
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