Rogers Communications will help recession-proof your portfolio, this investor says

So far, Rogers Communications (Rogers Communications News Stock Quote, Chart TSX:RCI.B) has had an up and down year, marketwise, but investors looking for security amidst market volatility should be thinking about this telecom name. So says Stan Wong of Scotia Wealth Management, who calls Rogers a good late-cycle stock.

Canadian telco play Rogers started 2019 on a good note, with the stock climbing almost four per cent over the first three months. But a disappointing first quarter report in April pulled RCI.B down, leaving it mostly flat for the first half of the year.

On a relative basis, though, the price swings in a stock like Rogers are typically tame, and that’s a trait that crosses the whole telecom space, says Wong, portfolio manager and director of wealth management at Scotia Wealth, who spoke on BNN Bloomberg on Thursday.

“We own it. I like the stock and I like the growth aspects of the name,” Wong says. “The telecom sector no longer exists — it’s communications and now you’re lumping in Facebook and Google — but if you peel out the telecom names, whether it be Rogers, Telus, BCE, Verizon and so forth, those are the names that will perform well as you get later into the cycle.”

“They’re a little bit more resilient to the recession which may come down the road,” he says. “Its beta is very low, it’s 0.7 versus the TSX, so if you’re looking for low volatility, Rogers is a good name. So are BCE and Telus and Verizon. I like the telco space. In our portfolio we have Rogers and Verizon.”

Along with low volatility and a healthy dividend —Rogers’ yield is currently 2.8 per cent— investors have seen good share price appreciation with RCI.B over the years. Rogers’ five-year return is 70 per cent, which compares to Telus’ five-year of 23 per cent and BCE’s 5-year of 24 per cent.

Ahead of Rogers’ second quarter results due later this month, the company its Q1 on April 17, generating net income of $391 million or $0.76 per share on revenue of $3.59 billion. Analysts were expecting $0.94 per share and a top line of $3.72 billion.

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