Few high-yielding stocks offer the same mix of growth and income as Canadian telecom company Shaw Communications Inc. (TSX:SJR.B).
Shaw is a cable and internet provider which has built its business on its Western Canadian base, and has expanded operations, serving a national audience. The company recently purchased Freedom Mobile, expanding into the wireless space, and is expected to disrupt the oligopoly its competitors Rogers Communications Inc. (TSX:RCI.B), Telus Corporation (TSX:T)(NYSE:TU), and BCE Inc. (TSX:BCE)(NYSE:BCE) have enjoyed for many years.
Shaw has begun to invest heavily in its wireless infrastructure, with a selection of smartphones on its platform that is expected to grow substantially over the next few years.
With a solid base of infrastructure being put in place today to support cash flows which are expected to grow substantially over time, many investors are putting their money on Shaw as the dark horse to come from behind and catch up to the larger Canadian players, eating away at market share which has traded hands among the big three players in this space for decades.Shaw’s subscriber growth and operating fundamentals remain superior compared to its peers, and with a relatively long runway for growth, I expect Shaw to outperform for some time. With a dividend yield of more than 4.3%, investors get compensated nicely to wait for the rebound which has yet to manifest itself.