Rogers Communications Inc.
) recently announced a hike in annual cash dividend by 16 cents
or 10% to $1.74 per share (43.5 cents quarterly) on its common
stock. The company will start paying the new quarterly dividend
of 43.5 cents per share to both class A and class B shareholders
on Apr 2, 2013, to shareholders of record, at the close of
business on Mar 15, 2012.
Rogers has been paying dividends uninterruptedly for the last
10 years with continuous increase or decrease in dividends over
the period. The current dividend yield is 3.7% with a dividend
payout ratio of 0.46.
At the end of the fourth quarter of fiscal 2012, Rogers had
$212.7 cash and cash equivalents while it generated $667 million
of cash from operations during the reported quarter. The excess
cash available with the company will be utilized to repurchase
shares or to pay dividends to its shareholders.
Shaw Communications Inc.
BCE, Inc. (
), belonging to the same industry, paid quarterly dividends of 26
cents, 65 cents and 57 cents with dividend yields of 4.3%, 3.8%
and 5.1%, respectively. Hence, dividend yield of Rogers happens
to be the lowest as compared to these three companies.
Apart from raising the shareholder's value by means of
increasing dividends, Rogers also issued a share buyback plan of
$500 million during fiscal 2013. Earlier, in 2012, the company
had already bought shares worth $350 million.
We believe that such increased dividend payment coupled with
such aggressive stock buyback plan may impact Rogers' cash flow
going forward, thereby expanding its current
debt-to-capitalization ratio of 0.73.
Moreover, Rogers plans to fully deploy 4G LTE across its
footprints may further deteriorate its cash position while moving
Currently, Rogers Communications has a short-term Zacks Rank
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