Do You Own CDN Telecom’s?

Canadian’s love to buy telecommunication companies for their portfolio often because of the dividend they pay.

Telus, BCE (otherwise known as Bell Canada) and Rogers are the big three telecom companies in Canada.

However, these three companies are down year-to-date 13%, 9% and 16% respectively.

Why are they all down this year?

There two possible main reasons:

First, high interest rates.

Investors who were attracted to these stocks for their high dividends could possibly get better rates in other high yield instruments like GIC’s and savings accounts.

Second, the entrance of Quebecor as a national wireless competitor.

With the recent purchase of Freedom Mobile, Quebecor will be the fourth largest telecom in Canada.

I believe with interest rates potentially staying higher for longer telecom companies might stay out of favor for a while.

There may be opportunities to still buy and hold, but for the long run.

Is your financial advisor analyzing the companies in your portfolio?