It can be tough to go bottom-fishing for some of the market’s hardest-hit stocks. Indeed, where some investors see dead money and top names to pare from a TFSA passive income portfolio, others see an opportunity to do some buying. It’s not easy to score a better bang for your buck when picking up the fallen names that have been stuck in multi-year bearish markets.
And while the timing can be difficult for traders, I do think that longer-term investors who stick around for the dividends could have the edge as they go bargain hunting across the least-loved parts of the TSX Index. In this piece, we’ll check out a 4.3%-yielding dividend stock that seems to have finally hit rock bottom. And though there’s no guarantee that newfound momentum will take it to prior highs, I do think that the valuation makes sense, as does the turnaround story.
Let’s check in with shares of $25.5 billion telecom firm Rogers Communications (TSX:RCI.B) after it enjoyed a huge 35% bounce off those Liberation Day depths. Indeed, the ice-cold falling knife is now one of the most remarkable momentum plays of the summer. And while the coast definitely isn’t clear, given the numerous headwinds that are still facing the big telecoms, I do think that Rogers has a value proposition that’s growing tough to match.
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Can the sports business get a jolt?
Of course, hockey fans are furious over the sizeable price hikes for Sportsnet+. And while time will tell if Canadians start really axing their subscriptions, I do think being the only game in town will force many sports fans to feel the full pain of those double-digit percentage price hikes.
Time will tell if the $11 billion for a dozen years of NHL broadcast rights will pay off. Either way, it looks like hockey fans are going to need to eat the hefty price hikes in a harsh economic environment where consumers may be more inclined to axe items out of the monthly budget, rather than re-subscribing to another season with less consideration for the price increases.
Personally, I think the massive price hikes could have waited. Times are tough, and the country may very well be at risk of recession over the next 18 months, especially if tariffs weigh more heavily. Food inflation continues to weigh heavily on Canadians’ wallets. And perhaps there are other items in the budget that are more pressing than loosening the purse strings for yet another streaming service.
Rogers stock looks too cheap
Beyond sports, Rogers’ new satellite-to-mobile service seems to make it one of the most forward-thinking names in the telecom scene today. And though it’s tough to say how such efforts will translate into profitable growth, I do think such innovations are helping add further fuel to the stock. With a solid, well-covered dividend (4.3% yield at the time of writing) and some meaningful momentum to get behind, I wouldn’t at all be surprised if RCI.B shares were to recover all of the ground lost earlier in the year in the back half.
The stock looks cheap at 14.5 times trailing price-to-earnings (P/E) and with a lower 0.86 beta, which entails somewhat less volatility than the rest of the market. Rogers stock may very well be the dividend value play to rotate into once growth loses its lustre again.
