RE:CIBC comments on dividendThanks for sharing that. Not sure if anything has changed with CIBC comments, but as of FEb.08/24 CIBC had a HOLD recommendation with a PT of $54. They make good points as did RBC.
incomedreamer11 wrote: We also highlight that the Canadian telco dividend yield is the highest over the past 20 years. We see both BCE and TELUS dividends as stable at current levels through 2024. In addition, the 3.7% spread between the Canadian telco dividend yield and the U.S. 10-year yield is above the 2.3% average seen between the GFC and the COVID-19 pandemic. At March month end, the average of Rogers and Cogeco yields of 4.6% was 40bps higher than the U.S. 10-year yield of 4.2% and compares to the five-year average spread of 90bps (and the 50bps average between the GFC and the COVID-19 pandemic).
Valuations Remain Below Historical Averages: The average FY2 EV/EBITDA multiple across the Canadian telecoms under our coverage was 6.7x at the end of March, an 80bps discount to the five-year average. With wireless competition picking up in the month, all companies under coverage are trading at a discount to their two- and five-year averages. Cogeco (-100bps) and BCE (-100bps) are trading at the widest discounts to their five-year averages given heightened competition in the U.S. space impacting Cogeco and weaker-than-expected 2024 FCF guidance reported by BCE in February continuing to be an overhang.