Q: Hello Peter and Staff
Read an article expounding the virtues of Cogeco and its holdco . Article cited low P/E and payout ratios as well as equivalent dividend rates based on current price with expected re rating to get discounts lower than present versus BCE and T. What do you think of this and as well the option of CCO versus CCA
Thanks for all you do
Dennis
Read an article expounding the virtues of Cogeco and its holdco . Article cited low P/E and payout ratios as well as equivalent dividend rates based on current price with expected re rating to get discounts lower than present versus BCE and T. What do you think of this and as well the option of CCO versus CCA
Thanks for all you do
Dennis
5i Research Answer:
CCA is cheap, we will give it that. But that's what happens when a stock declines 33% this year, and is essentially unchanged in 10 years. Debt is high at 5X cash flow but earnings growth is improving and looks better going forward. But it needs to execute better and show the street it can grow. So far, it has been a value trap. The payout ratio is low at less than 20%. The dividend was raised Nov 2, and it has a decent record in that regard. We want to like it at 6X earnings, but it needs to prove itself.