If you’re a resident of Quebec, chances are you’re familiar with Quebecor (TSX:QBR.B). It is the company behind the brands Videotron and Archambault, to name just a few.
Videotron is Quebecor’s telecommunications division and operates wireless and cable services in Quebec. As of the second quarter in 2019, it has 38,300 monthly subscribers, up from 31,900 in the same period in 2018.
Archambault is widely regarded as the largest music retailer in Quebec. It also sells DVDs, games, toys and books. Customers can purchase items from the company’s bricks and mortar stores or on its online website.
If you invested $50,000 in this company at its 1995 IPO, it would be worth $350,000 today! There is significant evidence to suggest that its share price will continue to grow at historic rates based on its performance in recent years.
Videotron is used by over 2.8 million homes in Quebec and it has 900,000 active wireless subscribers. This makes Videotron the fifth-largest wireless carrier in Canada after Rogers, Bell, Telus and Shaw.
Investors should look into buying Quebecor based on its increasing operating income and increasing operating cash flows.
Increasing operating income
If you were to look at a bar graph of Quebecor’s operating income, it looks very similar to stairs going up. Its operating income has increased from $732 million in fiscal 2014 to $1 billion in fiscal 2018 for a compound annual growth rate of 6.67%.
Given that income is an important metric investors use to determine the likelihood of investing in a company, Quebecor definitely meets the criteria for a solid investment decision.
Operating income describes income the company generates from its main line of business. An extension of operating income is net income which is after one-time charges.
I believe that operating income is a better indicator of the financial position of a company, as it does not include the sale or purchase of businesses which may skew the net income.
Quebecor’s increasing operating income indicates that the business is growing.
Increasing operating cash flows
Similar to operating income, operating cash flows represents cash derived from the company’s main line of business.
This is arguably more important than operating income, as cash is important for the business to pay its creditors and grow the business.
With operating cash flows increasing from $960 million in fiscal 2014 to $1.388 billion in fiscal 2018, investors should be pleased with the fact that Quebecor does a good job in soliciting additional business and upselling products to consumers.
If you invested in Quebecor in 1995, you would be a very wealthy individual. Obviously, hindsight is 20/20, which means you can only make a decision now that you believe will benefit you in the future.
Based on my research, Quebecor has all the signs of a company that will continue to grow. With an operating income and operating cash flow that has increased each year since fiscal 2014, the only thing investors need to be concerned about is how much the stock will increase, rather than if the stock will increase.
If you’re looking to double or even triple your money, Quebecor has rewarded its investors generously for many decades.
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 Chen Liu has no position in any of the stocks mentioned.