A Best-in-Class Dividend Play Hiding in Plain Sight

Some dividend stocks get all the attention, while others quietly deliver strong results without making headlines. Rogers Communications (TSX:RCI.B) fits squarely in the latter camp. With a forward yield of about 4.3% and a business that spans wireless, cable, and media, it’s a steady player in a competitive space. Yet despite its scale and stability, the market hasn’t rewarded it much this year; its share price is still down roughly 14% over the past 12 months. That disconnect between performance and perception could be where opportunity lies.

What happened

The past year for Rogers has been about execution and transformation. The dividend stock closed its $6.7 billion network investment deal with Blackstone, which brought in leading Canadian institutional investors while helping to pay down debt. It also became the 75% majority owner of Maple Leaf Sports & Entertainment, adding the Toronto Maple Leafs, Toronto Raptors, Toronto FC, and more to its already impressive sports portfolio. Management believes these assets are worth over $15 billion and has hinted at ways to unlock their value for shareholders over time.

Financially, Rogers’ second quarter of 2025 was steady. Total service revenue climbed 2% year over year, with wireless and cable both growing, and media revenue up 10% thanks to strong NHL playoff audiences on Sportsnet. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) also rose 2%, while free cash flow surged 39% to $925 million. That’s a meaningful jump, especially for income-focused investors watching the dividend stock’s ability to cover its dividend. The balance sheet is in better shape too, with debt leverage dropping to 3.6 times from nearly a full turn higher earlier in the year.

More to come

Where Rogers really stands out is its network strength. It was ranked Canada’s most reliable 5G+ wireless network this year and is already deploying 5G advanced technology, a first in the country. It’s also expanding rural and coastal access, like building an undersea fibre line to the Southern Gulf Islands in B.C. That kind of infrastructure investment doesn’t just protect market share. It helps Rogers win new customers in areas competitors can’t easily reach. In Q2, the dividend stock added 35,000 postpaid wireless subscribers and 26,000 retail internet customers, while keeping churn at a low 1%.

The dividend is well supported. With annual free cash flow expected between $3 and $3.2 billion in 2025, Rogers has room to maintain and even grow its payout, especially as debt reduction frees up more capital. The payout ratio is just over 70%, a comfortable range for a telecom with stable cash generation. Management’s track record of dividend stability paired with its improved financial flexibility gives income investors reason to relax.

Foolish takeaway

Of course, there are risks. Rogers faces intense competition from big telecom and smaller regional providers. Integration of its expanded media and sports assets will take time, and the benefits may not be immediate. Regulatory scrutiny is always a factor in Canadian telecom, and any major policy shifts could impact pricing power. On top of that, the sports and media segment is more seasonal and cyclical than wireless or cable, which could mean some earnings volatility.

Still, Rogers offers something rare in this market: a combination of yield, scale, and growth optionality. The wireless business remains the profit engine, cable continues to generate reliable cash, and media now has a bigger role in both revenue and brand strength. With its network edge, strategic sports ownership, and improving balance sheet, Rogers is positioned to keep rewarding investors over the long haul.

Meanwhile, investors can gain access to $290 annually in dividends alone from a $7,000 investment. For those looking beyond the usual suspects in the dividend space, Rogers isn’t just a telecom giant. It’s a best-in-class income play hiding in plain sight.