The communication services sector underperformed, although its components on the TSX are telco stocks. However, the broader coverage includes companies providing media, entertainment, and interactive media and services.
Excluding telco stocks, Canadians can consider taking positions and adding Thomson Reuters (TSX:TRI), Stingray Group (TSX:RAY.A), or Cineplex (TSX:CGX) to their investment portfolios. All three delivered double-digit returns last year, and the gains could be more in 2025 because of the improving economic environment.
Source: Getty Images
Tech conglomerate
Thomson Reuters is known globally for its business information services. This $102.8 billion multinational content-driven technology conglomerate provides news and information-based tools to professionals. In 2024, it rewarded investors with a +20.73% overall return.
If price is not a consideration, TRI is a good long-term investment. As of this writing, the current share price is 228.45%, with a dividend offer of 1.33%. The large-cap stock is a Dividend Aristocrat owing to 31 consecutive years of modest dividend hikes.
Its president and chief executive officer (CEO), Steve Hasker, said, “We remain focused on driving innovation across our portfolio and markets to best serve our customers, demonstrated by our investment in AI (artificial intelligence) now increasing to more than $200 million in 2024.” TRI’s “Build, Partner, Buy” strategy is ongoing, including the launch of several new AI product capabilities. It boasts CoCounsel, a professional-grade Gen-AI assistant.
In the third quarter (Q3) of 2024, revenue increased 8% to US$1.72 billion compared to Q3 2023, while operating profit declined 6% year over year to US$415 million. Free cash flow (FCF) rose 12% to US$591 million. On January 2, 2025, TRI acquired SafeSend to accelerate gen-AI tools. The U.S.-based firm provides technology for tax and accounting professionals.
Changing the game
Stingray delivers curated audio and video experiences to consumers and businesses globally and in multiple industries. The $510.55 million music, media, and technology company distribute music and video content and offers business services as well as advertising solutions.
Its more than 100 radio stations provide information and entertainment. The retail audio advertising network is one of the largest in North America.
In the first half of fiscal 2025 (six months ended September 30, 2024), revenue and adjusted net income increased 13% and 15.9% year over year to $182.6 million and $30.6 million. Eric Boyko, president and co-founder of Stingray, said the predictability of the company’s profitability has increased. If you invest today, the share price is $7.50. The total return in 2024 was +29.73%.
Making progress
Cineplex operates movie theatres and family entertainment centers in Canada. The nightmare of this $763.9 million company during the COVID-19 is gone. Investors are happy with the 45.67% total return in 2024. Its current share price of $12.03 is 165% higher than the rock-bottom $4.54 on October 14, 2020.
Its president and CEO, Ellis Jacob, said Cineplex continues to make progress with its strategy initiatives. He expects the diversified businesses and the coming film slate to generate significant free cash flows soon. The $395.6 million revenues in Q3 2024 have exceeded the Q3 2019 figure by nearly 6%.
Stock winners
Thomson Reuters, Stingray, and Cineplex are winning investments in 2024 and could be winners in 2025.
