How do QBR metrics compare to other Canadian telecoms?
Is the 3.4% dividend sustainable?
Debt level?
Cause of growth in 2025 – is there a viable growth trajectory? Reasons to think it will continue?
Thank you for your valued views.
Sorry for the delay but note multi-company comparisons in a question are going to take much longer. QBR.B is $9.5B market cap, trades at 11.6X earnings, with a 3.38% dividend that has grown 16% over five years. Shares are up 31% YTD. About 8% EPS growth is predicted. Telus is $33B, 21X, 7.61% with 6.9% 5-year growth, up 12% YTD and 6% expected growth. RCI.B is $22B, 8.6X, 4.95% (no dividend growth since 2019), down 9% YTD with 5% growth expected. BCE is $28B, 11X, 5.79% with a recent 50% dividend cut, down 9% YTD with a small decline in EPS expected next year. QBR is clearly outperforming peers this year. Growth has been better, and is expected to be a bit better going forward. Valuation remains reasonable. All of these have a lot of debt, but QBR at less than 4X cash flow is in good relative shape. We would not have concerns on the dividend, with a free cash flow payout ratio of only 30%. This is at the bottom of the company's targetted range (30% to 50%) so this implies that more dividend hikes will be on the way at some point (the last hike was February 2025). With its strong momentum, better growth, decent valuation and dividend strength we would see its outperformance likely to continue, though perhaps not to the same high degree as the past year.