Cogeco Communications (TSX:CCA) is a Montreal-based telecommunications company that operates in
Canada and in some parts of the United States through its subsidiaries. This telecom is not a
heavyweight like a BCE or Telus , but it is still worth your attention in the middle of the summer. Shares
of Cogeco have dropped 14% in 2022 as of close on July 21.
Today, I want to discuss whether this telecom stock is worth buying on the dip in late July. The company
released its third quarter fiscal 2022 earnings on July 13.
Cogeco reported total revenues of $754 million – up 16% from the previous year. Meanwhile, adjusted
EBITDA increased nearly 17% in the year-over-year period to $353 million. Profit jumped 3.3% to $108
million. Overall, Cogeco benefited from strong results in its American broadband services segment due
to a higher Internet service customer base. Meanwhile, the easing of public health restrictions allowed
its media activities revenue to deliver solid growth compared to the prior year.
Looking ahead, Cogeco continues to expect solid revenue growth in fiscal 2023. It will continue to
expand its network in Canada and the United States. That investment will be a drain on free cash flow in
the year ahead.
Shares of this dividend stock currently possess a favourable price-to-earnings ratio of 9.6. It is still
trading close to technically oversold territory after climbing out of the red late last week. Cogeco offers a
quarterly dividend of $0.625 per share, which represents a 3.2% yield. I’m looking to snatch up this rock-
solid telecom stock as it offers nice value in this choppy market.
