Which of the 3 Best Value Telecom Stocks in Canada Is a Buy?

For a sturdy telecom dividend payer, Rogers Communications Inc. (TSX:RCI.B)(NYSE:RCI) is one of the best. But is it the best value?

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Are you looking for three Canadian growth stocks that are currently good value for money and pay healthy dividends?

You may not have thought of looking to the telecom sector, but, surprisingly enough, that’s where you’ll find some of the best dividend payers on the TSX. Let’s take a look at three of the most solid picks and see which gives you the best bang for your buck.

Three stocks to earn you a profit, but which is best?

If you want stable dividends that can be funneled straight into your TFSA or RRSP, and Canadian telecoms are your thing, you might want to start with the two biggest.

BCE Inc. (TSX:BCE)(NYSE:BCE) offers a tasty 5.51% dividend yield, which is expected to rise to 5.71% next year. With a discount of 32% it’s currently undervalued — for now. If you don’t own telecom stock yet, this might be a good place to start. BCE is well known (folks still know it as Bell), so it’s got brand familiarity going for it. It’s also hitting the headlines as being a cheap stock, so you may want to grab it while you can before there’s a rush.

Next up is Rogers Communications Inc. (TSX:RCI.B)(NYSE:RCI). Talk about brand familiarity! You already know Rogers, but were you aware that it’s possibly the one of the healthiest stocks on the TSX?

Rogers is arguably the healthiest of the three stocks here, if you care to take a look at under the bonnet. It’s got a solid track record, is trading below its projected cash flow value, and has an expected 9.7% earnings-growth curve ahead of it. Sounds good, eh? While its dividend yield is 3.12%, making it the lowest payer of the three, you should factor in its strong past performance in terms of payments if you’re concerned about reliability.

Telus everything you know…

If you’re looking for a dividend stock with a decent price-to-book ratio, Telus Corporation (TSX:T)(NYSE:TU) might be your guy. Paying a 4.59% yield on your investment and with a P/B of 2.9 times, Telus is the better value of the three stocks when compared to the sector average.

Telus also comes out on top in terms of past earnings, with positive growth over the last five years that beat its own five-year average, and one-year growth that exceeded the market average for the same period. If you’ve been eyeing Rogers and BCE for a buy, consider this a challenge!

The bottom line

If you’re looking at past earnings and a decent dividend yield, Telus is the one for you. Depending on your desired metrics, though, you may want to go for one of its competitors. Choose Rogers for its overall health, projected annual growth earnings, and 10-year dividend stability, or BCE for a higher dividend yield and discounted share price. At the end of the day, all three are good value, solid dividend payers, and growth stocks to boot, so the choice is yours.

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 Victoria Hetherington has no position in any of the stocks mentioned.

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