Missing a rally creates a special kind of investing impatience. Stocks that looked expensive three months ago suddenly look irresistible after rising another 20%, while cash begins feeling less like protection and more like a personal failure.
That’s usually when perfectly reasonable investors start buying yesterday’s winners at tomorrow’s prices.
The S&P/TSX Composite Index remains up approximately 13% in 2026, even after recently retreating from its record high. Instead of chasing the companies that carried that rally, I’d look for a profitable, essential business that still trades at a reasonable valuation.
Rogers Communications (TSX: RCI.B) currently fits that description.
Source: Getty Images
Quality doesn’t always look exciting
Rogers stock provides wireless, internet, television, and business communications services across Canada. Those operations require enormous networks that would be exceptionally difficult for a new competitor to recreate.
That recurring revenue gives Rogers stock a more dependable business than companies relying on commodity prices or occasional equipment purchases. Its ownership of the Toronto Blue Jays, Sportsnet, Rogers Centre, and Maple Leaf Sports & Entertainment (MLSE) also creates a collection of sports assets that can’t be easily duplicated.
The market hasn’t completely ignored those strengths. However, near $50.34, Rogers stock remains approximately 11% below its 52-week high and trades around 10.4 times forward earnings. That looks more attractive than paying a premium multiple simply because another Canadian stock recently appeared on every momentum screen.
The underlying business is improving
Second-quarter total service revenue increased 8% year over year to $5.1 billion. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 3% to $2.4 billion.
The more important improvement may be happening in cash flow. Rogers stock generated $982 million of free cash flow during the quarter, up 6%, as capital expenditures declined. For the first six months, free cash flow increased 16% to $1.8 billion.
Rogers stock also reduced its debt leverage ratio to 3.8 from 4 at the end of 2025. That remains elevated, but the direction matters. Further free-cash-flow growth could gradually create a less leveraged company underneath the same collection of assets.
Unlocking sports
Rogers stock agreed to purchase the remaining 25% of MLSE that it doesn’t already own for $4.4 billion. Once the transaction closes, management intends to sell a minority interest in its combined sports and entertainment holdings.
Finding another Canadian business with that particular collection would require a time machine and several extremely cooperative professional sports leagues. Selling a minority position could establish a clearer market value for those assets while providing cash for debt reduction. Meanwhile, second-quarter sports and media revenue increased 53% to $1.2 billion, partly reflecting the earlier consolidation of MLSE.
This isn’t a hidden technology company or an attempt to squeeze artificial intelligence (AI) into another investment thesis. It’s a communications business with recurring customers and sports properties that could become more valuable as live programming attracts advertisers and streaming platforms.
Debt matters
Rogers stock isn’t a risk-free alternative to chasing the rally. Purchasing the remaining MLSE interest requires another large commitment, while the Shaw acquisition has already left the company with substantial debt.
Higher borrowing costs could slow deleveraging. Competition can also pressure wireless prices, as demonstrated by a year-over-year decline in average mobile revenue per user during the latest quarter.
I’d therefore monitor free cash flow and leverage rather than becoming distracted by the unusually low trailing price-to-earnings ratio. That figure is distorted by gains and losses connected with Rogers stock’s’ sports transactions. The forward multiple provides a more useful, although still imperfect, valuation measure.
Investors wanting dividend stocks also receive a $0.50 quarterly payment, producing a yield of approximately 4%. The dividend hasn’t grown recently, making debt reduction and capital appreciation more important parts of the thesis.
Bottom line
Rogers stock won’t offer the excitement of buying a stock immediately after it makes a new high. That may be precisely the appeal.
The company owns essential communications infrastructure, generates growing free cash flow, and holds sports assets that could eventually unlock additional value. Its debt remains the central risk, but the current valuation provides room for that imperfection.
Missing the first stage of a rally doesn’t require chasing the crowd during the second. I’d rather buy Rogers stock gradually and let improving cash flow do the running.
