Videotron is a subsidiary of Quebecor. (Photo Romeo Mocafico)
What to do with Quebecor, Scotiabank and PayPal securities? Here are some recommendations from analysts that may move prices soon. Note: the author may have a totally different opinion from that expressed.
Quebecor (QBR.B, $ 32.52): 30% dividend increase in sight
Quebecor’s fourth quarter results, expected on February 25, will hold little surprise, the group could raise its dividend by 30% to $ 0.26, believes Adam Shine of National Bank Financial.
Such an increase would be consistent with its policy of distributing 30 to 50% of its excess cash flow to shareholders.
The group also repurchased 1.7 million shares at an average price of $ 32.81 each during the last three months of 2020, thereby returning $ 55.7 million of capital to shareholders.
In 2021, Quebecor’s credit rating also has a good chance of moving up to the top quality category since debt has risen to 2.8 times operating profit, including a convertible debenture, the analyst also predicts. .
As for the fourth quarter, Adam Shine’s estimates are above consensus except for free cash flow.
It forecasts a slight increase of 0.2% in revenue (to $ 1.1 billion) and 1.9% in operating profit (to $ 504 million). Net income is expected to rise 2.8% to $ 0.65 per share.
The addition of 12,000 Internet access service subscribers (four times more than a year earlier) will offset the loss of 10,000 basic cable service customers and 30,000 IP telephony service customers.
Fizz Internet got off to a slow start in 2019, but is improving as the Helix service also gains more subscribers, he says. Adam Shine estimates that 17% of customers use this integrated platform.
The revenues of the cable division should therefore advance by 4.1% while operating profit should decline by 0.6%.
Fizz wireless service continues to advance, at the expense of monthly revenue per subscriber, as 70% of customers bring their own device.
Wireless revenues should therefore grow by 7.7% despite the 3% decline in average monthly revenues and a promotional context.
In total, wireless service is expected to have added 32,000 customers, less than the 41,800 additions a year earlier, he said.
He could adjust his forecasts based on the results of the TVA Group which will be released on February 18.
The analyst raises his target price from $ 39 to $ 40 because his valuation model is moving six months ahead.
This target offers a potential gain of 25.5% and represents 7.6 times the operating profit of 2021 and 7.1 times that of 2022. The analyst reiterates his buy recommendation.
Scotiabank (SNB, $ 71.26): well positioned to take advantage of the earlier US recovery