Investment Q&A

QBR.B is a regional telecom and media company, and is now trading at 8.2x times' EV/EBITDA, a discount valuation compared to RCI.B at 10.6x EV/EBITDA. In the last few years, revenue growth was around 3%, but capital investment declines year-after-year, creating more room for capital returns to shareholders. Having said that, QBR.B recently leveraged the balance sheet and did a large acquisition. Therefore, the balance sheet is leveraged (similar to other industry players), and the net debt/EBITDA is around 4.2x. In the telecom industry, we tend to stick with national scale players rather than regional ones, as we think the telecom industry does offer some scale advantage with lower cost structure for bigger players. We would prefer BCE, followed by RCI.B, before QBR.