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If you are wondering whether Rogers Communications is attractively priced or already fully valued, the recent share performance gives you a useful starting point.
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The stock last closed at $49.50, with a 0.5% gain over 7 days, a 6.6% decline over 30 days, a 5.0% decline year to date, and a 46.7% return over the past year. Together, these figures hint at shifting views on both its potential and its risks.
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Those mixed returns arrive as Rogers Communications continues to sit at the center of Canada's telecom and media sector, with investors closely watching its progress and competitive position. This context helps explain why the share price has seen both enthusiasm over the last year and pullbacks in the shorter term.
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On Simply Wall St's 6 point valuation framework, Rogers Communications has a valuation score of 5. This reflects an assessment that it screens as undervalued on most, but not all, checks and sets things up for a closer look at different valuation methods in this article, before finishing with a way to bring those numbers together into a clearer overall picture.
Approach 1: Rogers Communications Dividend Discount Model (DDM) Analysis
The Dividend Discount Model looks at the value of a stock by projecting its future dividends and discounting them back to today. It is especially useful if you care about income and dividend sustainability.
For Rogers Communications, the latest inputs show an annual dividend per share of CA$2.00, a return on equity of 13.53%, and a dividend payout ratio of about 49.80%. That payout level suggests roughly half of earnings are being returned to shareholders while the rest is retained to support the business.
The model applies a long term dividend growth rate of 2.87%, capped from a higher starting figure, with an expected broader growth rate of 6.79%. Using these assumptions, the DDM estimates an intrinsic value of CA$59.10 per share. Versus the recent share price of CA$49.50, this implies the stock screens as undervalued by about 16.2% on this dividend based approach.
For dividend focused investors, the DDM indicates that the current price offers a margin of safety if these dividend and growth assumptions hold.
Result: UNDERVALUED
Our Dividend Discount Model (DDM) analysis suggests Rogers Communications is undervalued by 16.2%. Track this in your watchlist or portfolio , or discover 6 more high quality undervalued stocks .
Approach 2: Rogers Communications Price vs Earnings
For profitable companies, the P/E ratio is often a useful quick check because it links what you pay today to the earnings the business is already generating. A higher or lower P/E can reflect how the market weighs growth expectations and risk, with faster expected earnings growth or lower perceived risk usually supporting a higher “normal” P/E range, and the reverse holding true when expectations are more muted or risks are higher.
Rogers Communications currently trades on a P/E of 3.79x. This sits well below both the Wireless Telecom industry average P/E of 17.15x and the broader peer group average of 14.96x. To go a step further, Simply Wall St’s proprietary “Fair Ratio” model estimates what a more tailored P/E might look like for Rogers Communications, given factors such as its earnings growth profile, industry, profit margins, market cap and specific risks.
Because the Fair Ratio of 6.16x incorporates these company specific drivers rather than relying only on broad peer or industry comparisons, it can offer a more customised view of value. Set against the current P/E of 3.79x, this framework suggests Rogers Communications trades below the P/E level that might be expected given its characteristics.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Rogers Communications Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach a clear story about Rogers Communications to your numbers by linking your view of its future revenue, earnings and margins to a financial forecast, a fair value, and then a simple comparison between that fair value and the current share price. This can help you decide if you see it as a buy, a hold, or a sell. Each Narrative sits on the Community page and updates automatically when new news or earnings arrive. A more cautious Rogers view might look closer to a CA$50 fair value, while a more optimistic view might sit nearer CA$72. Both can co exist side by side so you can see how different assumptions about subscriber growth, capital intensity, regulation or sports and media monetization turn into very different estimated outcomes for the same stock.
Do you think there's more to the story for Rogers Communications? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include RCI-B.TO .
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