Which Is the Better Investment: Rogers Communications Inc. or BCE Inc.?

Rogers Communications Inc. (TSX:RCI.B)(NYSE:RCI) and BCE Inc. (TSX:BCE)(NYSE:BCE) are similar in terms of service offerings, but is one a better choice for your portfolio?

| More on:
The Motley Fool

Rogers Communications Inc. (TSX:RCI.B)(NYSE:RCI) and BCE Inc. (TSX:BCE)(NYSE:BCE) are two companies with more in common than most would expect. Both are large businesses with a national footprint that offer TV, phone, Internet and wireless services. Both have an impressive wireless network built out across the country, and both have an expanding portfolio of digital media acquisitions that include both radio and TV stations.

The ongoing comparison of the services these two offer is so intense that many consumers and investors alike label themselves as either being on team Rogers or team BCE. Let’s take a closer look at both.

The case for BCE

BCE is currently trading near $54, off of a 52-week high of $60.20. Looking at the performance of the stock year-to-date, it is flat at 0.41%. However, when looking at the performance over the past year, this improves to over 10%. Looking even further back, a five-year investment provides a return in excess of 70%. This alone makes BCE a candidate for those looking for the long term.

One of the most impressive aspects about BCE is the dividend. The $0.65 quarterly dividend is income from the vast infrastructure that BCE already has built up, and BCE has been distributing those dividends to shareholders for over 100 years. The flip side is that the dividend payout represents a significant source of the total income that BCE earns, so investors seeking significant growth over time may want to reconsider BCE. Income via dividend payments is clearly the focus for selecting this option.

The case for Rogers

Rogers is currently trading just shy of $45, near its 52-week high of $48.50. Year-to-date performance is only just in the red at -1.7%, and expanding out over the course of a full year this improves to 3%. A more respectable picture is painted for the long-term investor, as the five-year rate comes in at over 25%.

Rogers has a quarterly dividend of $0.48, which, while lower than BCE’s in terms of per share, represents a lower level of total income that is designated for dividends, meaning there is more financial muscle for Rogers to use for growth, and arguably makes it a safer option. That’s not to say that there isn’t any room for the dividend payout to grow—it has steadily increased over the years, and is likely to continue to do so.

In terms of growth, Rogers is notorious for adding acquisitions to its portfolio. The recent acquisition of smaller carrier Mobilicity and the outright purchase of spectrum from Shaw Communications Inc. demonstrates that this is a company that is set on expanding its footprint further rather than resting on its laurels.

And the better investment is…

This is a tough call. Rogers’s aggressive growth agenda and BCE’s faithful dividends make either one of these a great option. If I had to choose one at this point, it would be BCE. The dividend it offers is just too hard to pass by, and the steady income it earns could be useful in investing in another stock with a more aggressive path… like Rogers.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any stocks mentioned. Rogers Communications is a recommendation of Stock Advisor Canada. Rogers Communications is owned by The Motley Fool Pro Canada.

More on Investing

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Growth Stocks I’m Buying in April

These three growth stocks are up in the last year, and that is likely to continue on as we keep…

Read more »

clock time
Tech Stocks

Long-Term Investing: 3 Top Canadian Stocks You Can Buy for Under $20 a Share

These three under-$20 stocks offer excellent buying opportunities for long-term investors.

Read more »

Arrowings ascending on a chalkboard
Energy Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Canadian Natural Resources stock is well set up to beat the TSX as it continues to generate strong cash flows…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »