Intrinsic value of Rogers Communications Cl B - RCI

Previous Close

$53.01

  Intrinsic Value

$21.73

stock screener

  Rating & Target

str. sell

-59%

  Value-price divergence*

-48%

Previous close

$53.01

 
Intrinsic value

$21.73

 
Up/down potential

-59%

 
Rating

str. sell

 
Value-price divergence*

-48%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of RCI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 27.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.16
  4.00
  4.10
  4.19
  4.27
  4.34
  4.41
  4.47
  4.52
  4.57
  4.61
  4.65
  4.69
  4.72
  4.75
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
Revenue, $m
  10,142
  10,548
  10,980
  11,440
  11,929
  12,447
  12,996
  13,577
  14,190
  14,839
  15,523
  16,245
  17,007
  17,809
  18,654
  19,544
  20,481
  21,467
  22,505
  23,596
  24,744
  25,951
  27,221
  28,555
  29,957
  31,431
  32,980
  34,608
  36,318
  38,115
  40,003
Variable operating expenses, $m
 
  8,522
  8,859
  9,218
  9,599
  10,004
  10,432
  10,886
  11,365
  11,871
  12,405
  12,680
  13,274
  13,900
  14,560
  15,254
  15,986
  16,755
  17,565
  18,417
  19,313
  20,255
  21,246
  22,287
  23,382
  24,532
  25,741
  27,012
  28,346
  29,749
  31,222
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  8,739
  8,522
  8,859
  9,218
  9,599
  10,004
  10,432
  10,886
  11,365
  11,871
  12,405
  12,680
  13,274
  13,900
  14,560
  15,254
  15,986
  16,755
  17,565
  18,417
  19,313
  20,255
  21,246
  22,287
  23,382
  24,532
  25,741
  27,012
  28,346
  29,749
  31,222
Operating income, $m
  1,403
  2,026
  2,121
  2,222
  2,329
  2,443
  2,564
  2,691
  2,826
  2,968
  3,118
  3,566
  3,733
  3,909
  4,095
  4,290
  4,496
  4,712
  4,940
  5,179
  5,431
  5,696
  5,975
  6,268
  6,575
  6,899
  7,239
  7,596
  7,972
  8,366
  8,780
EBITDA, $m
  3,141
  3,794
  3,950
  4,115
  4,291
  4,477
  4,675
  4,884
  5,104
  5,338
  5,584
  5,844
  6,117
  6,406
  6,710
  7,030
  7,367
  7,722
  8,095
  8,488
  8,901
  9,335
  9,791
  10,271
  10,776
  11,306
  11,863
  12,449
  13,064
  13,710
  14,389
Interest expense (income), $m
  560
  552
  583
  615
  649
  685
  724
  764
  807
  853
  901
  952
  1,005
  1,062
  1,121
  1,184
  1,250
  1,319
  1,393
  1,469
  1,550
  1,636
  1,725
  1,819
  1,918
  2,022
  2,131
  2,246
  2,367
  2,494
  2,627
Earnings before tax, $m
  858
  1,474
  1,538
  1,607
  1,680
  1,758
  1,840
  1,927
  2,018
  2,115
  2,217
  2,614
  2,728
  2,847
  2,973
  3,106
  3,246
  3,393
  3,547
  3,710
  3,881
  4,061
  4,250
  4,449
  4,657
  4,877
  5,108
  5,350
  5,605
  5,872
  6,153
Tax expense, $m
  240
  398
  415
  434
  454
  475
  497
  520
  545
  571
  599
  706
  736
  769
  803
  839
  876
  916
  958
  1,002
  1,048
  1,096
  1,147
  1,201
  1,257
  1,317
  1,379
  1,445
  1,513
  1,586
  1,661
Net income, $m
  618
  1,076
  1,123
  1,173
  1,227
  1,283
  1,343
  1,406
  1,473
  1,544
  1,619
  1,908
  1,991
  2,078
  2,170
  2,267
  2,369
  2,477
  2,589
  2,708
  2,833
  2,964
  3,102
  3,247
  3,400
  3,560
  3,729
  3,906
  4,091
  4,287
  4,492

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  20,977
  21,838
  22,733
  23,686
  24,697
  25,770
  26,907
  28,109
  29,380
  30,722
  32,139
  33,634
  35,211
  36,872
  38,621
  40,464
  42,404
  44,446
  46,594
  48,854
  51,230
  53,730
  56,357
  59,120
  62,023
  65,075
  68,282
  71,652
  75,193
  78,913
  82,822
Adjusted assets (=assets-cash), $m
  20,977
  21,838
  22,733
  23,686
  24,697
  25,770
  26,907
  28,109
  29,380
  30,722
  32,139
  33,634
  35,211
  36,872
  38,621
  40,464
  42,404
  44,446
  46,594
  48,854
  51,230
  53,730
  56,357
  59,120
  62,023
  65,075
  68,282
  71,652
  75,193
  78,913
  82,822
Revenue / Adjusted assets
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
Average production assets, $m
  13,367
  13,902
  14,472
  15,078
  15,722
  16,405
  17,129
  17,894
  18,703
  19,558
  20,460
  21,411
  22,415
  23,472
  24,586
  25,759
  26,994
  28,294
  29,661
  31,100
  32,613
  34,204
  35,877
  37,635
  39,484
  41,426
  43,468
  45,613
  47,867
  50,236
  52,724
Working capital, $m
  -1,882
  -707
  -736
  -766
  -799
  -834
  -871
  -910
  -951
  -994
  -1,040
  -1,088
  -1,139
  -1,193
  -1,250
  -1,309
  -1,372
  -1,438
  -1,508
  -1,581
  -1,658
  -1,739
  -1,824
  -1,913
  -2,007
  -2,106
  -2,210
  -2,319
  -2,433
  -2,554
  -2,680
Total debt, $m
  12,546
  13,245
  13,974
  14,749
  15,573
  16,446
  17,371
  18,350
  19,384
  20,477
  21,631
  22,847
  24,130
  25,482
  26,907
  28,407
  29,986
  31,648
  33,396
  35,236
  37,170
  39,205
  41,344
  43,592
  45,956
  48,440
  51,050
  53,794
  56,676
  59,704
  62,886
Total liabilities, $m
  17,077
  17,776
  18,505
  19,280
  20,104
  20,977
  21,902
  22,881
  23,915
  25,008
  26,162
  27,378
  28,661
  30,013
  31,438
  32,938
  34,517
  36,179
  37,927
  39,767
  41,701
  43,736
  45,875
  48,123
  50,487
  52,971
  55,581
  58,325
  61,207
  64,235
  67,417
Total equity, $m
  3,900
  4,062
  4,228
  4,406
  4,594
  4,793
  5,005
  5,228
  5,465
  5,714
  5,978
  6,256
  6,549
  6,858
  7,184
  7,526
  7,887
  8,267
  8,666
  9,087
  9,529
  9,994
  10,482
  10,996
  11,536
  12,104
  12,700
  13,327
  13,986
  14,678
  15,405
Total liabilities and equity, $m
  20,977
  21,838
  22,733
  23,686
  24,698
  25,770
  26,907
  28,109
  29,380
  30,722
  32,140
  33,634
  35,210
  36,871
  38,622
  40,464
  42,404
  44,446
  46,593
  48,854
  51,230
  53,730
  56,357
  59,119
  62,023
  65,075
  68,281
  71,652
  75,193
  78,913
  82,822
Debt-to-equity ratio
  3.217
  3.260
  3.300
  3.350
  3.390
  3.430
  3.470
  3.510
  3.550
  3.580
  3.620
  3.650
  3.680
  3.720
  3.750
  3.770
  3.800
  3.830
  3.850
  3.880
  3.900
  3.920
  3.940
  3.960
  3.980
  4.000
  4.020
  4.040
  4.050
  4.070
  4.080
Adjusted equity ratio
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  618
  1,076
  1,123
  1,173
  1,227
  1,283
  1,343
  1,406
  1,473
  1,544
  1,619
  1,908
  1,991
  2,078
  2,170
  2,267
  2,369
  2,477
  2,589
  2,708
  2,833
  2,964
  3,102
  3,247
  3,400
  3,560
  3,729
  3,906
  4,091
  4,287
  4,492
Depreciation, amort., depletion, $m
  1,738
  1,768
  1,829
  1,893
  1,962
  2,034
  2,111
  2,193
  2,279
  2,370
  2,466
  2,278
  2,385
  2,497
  2,616
  2,740
  2,872
  3,010
  3,155
  3,309
  3,469
  3,639
  3,817
  4,004
  4,200
  4,407
  4,624
  4,852
  5,092
  5,344
  5,609
Funds from operations, $m
  2,161
  2,844
  2,952
  3,066
  3,188
  3,317
  3,454
  3,599
  3,752
  3,914
  4,084
  4,186
  4,376
  4,576
  4,786
  5,008
  5,241
  5,487
  5,745
  6,017
  6,302
  6,603
  6,919
  7,251
  7,600
  7,967
  8,353
  8,758
  9,184
  9,631
  10,101
Change in working capital, $m
  -768
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -54
  -57
  -60
  -63
  -66
  -70
  -73
  -77
  -81
  -85
  -89
  -94
  -99
  -104
  -109
  -115
  -120
  -126
Cash from operations, $m
  2,929
  2,871
  2,980
  3,097
  3,221
  3,352
  3,491
  3,638
  3,793
  3,957
  4,130
  4,234
  4,427
  4,629
  4,843
  5,067
  5,304
  5,553
  5,814
  6,090
  6,379
  6,684
  7,004
  7,341
  7,694
  8,066
  8,457
  8,867
  9,298
  9,751
  10,227
Maintenance CAPEX, $m
  0
  -1,422
  -1,479
  -1,540
  -1,604
  -1,673
  -1,745
  -1,822
  -1,904
  -1,990
  -2,081
  -2,177
  -2,278
  -2,385
  -2,497
  -2,616
  -2,740
  -2,872
  -3,010
  -3,155
  -3,309
  -3,469
  -3,639
  -3,817
  -4,004
  -4,200
  -4,407
  -4,624
  -4,852
  -5,092
  -5,344
New CAPEX, $m
  -1,775
  -535
  -570
  -606
  -644
  -683
  -723
  -765
  -809
  -855
  -902
  -952
  -1,003
  -1,057
  -1,114
  -1,173
  -1,235
  -1,300
  -1,368
  -1,439
  -1,513
  -1,591
  -1,673
  -1,759
  -1,848
  -1,943
  -2,042
  -2,145
  -2,254
  -2,368
  -2,488
Cash from investing activities, $m
  -1,818
  -1,957
  -2,049
  -2,146
  -2,248
  -2,356
  -2,468
  -2,587
  -2,713
  -2,845
  -2,983
  -3,129
  -3,281
  -3,442
  -3,611
  -3,789
  -3,975
  -4,172
  -4,378
  -4,594
  -4,822
  -5,060
  -5,312
  -5,576
  -5,852
  -6,143
  -6,449
  -6,769
  -7,106
  -7,460
  -7,832
Free cash flow, $m
  1,111
  914
  932
  951
  973
  997
  1,022
  1,050
  1,080
  1,113
  1,147
  1,106
  1,146
  1,187
  1,232
  1,279
  1,329
  1,381
  1,437
  1,496
  1,558
  1,623
  1,693
  1,765
  1,842
  1,923
  2,008
  2,098
  2,192
  2,291
  2,395
Issuance/(repayment) of debt, $m
  -398
  699
  729
  775
  823
  873
  925
  979
  1,035
  1,093
  1,154
  1,217
  1,283
  1,352
  1,424
  1,500
  1,579
  1,662
  1,749
  1,839
  1,935
  2,034
  2,139
  2,249
  2,364
  2,484
  2,611
  2,743
  2,882
  3,028
  3,182
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -441
  699
  729
  775
  823
  873
  925
  979
  1,035
  1,093
  1,154
  1,217
  1,283
  1,352
  1,424
  1,500
  1,579
  1,662
  1,749
  1,839
  1,935
  2,034
  2,139
  2,249
  2,364
  2,484
  2,611
  2,743
  2,882
  3,028
  3,182
Total cash flow (excl. dividends), $m
  670
  1,613
  1,660
  1,727
  1,796
  1,870
  1,947
  2,029
  2,115
  2,206
  2,301
  2,323
  2,429
  2,539
  2,656
  2,779
  2,908
  3,043
  3,186
  3,335
  3,493
  3,658
  3,831
  4,014
  4,206
  4,407
  4,618
  4,841
  5,074
  5,319
  5,577
Retained Cash Flow (-), $m
  271
  -162
  -167
  -177
  -188
  -200
  -211
  -224
  -236
  -250
  -264
  -278
  -293
  -309
  -325
  -343
  -361
  -380
  -400
  -420
  -442
  -465
  -489
  -514
  -540
  -568
  -597
  -627
  -659
  -692
  -727
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,452
  1,494
  1,549
  1,608
  1,670
  1,736
  1,805
  1,879
  1,956
  2,037
  2,045
  2,135
  2,230
  2,331
  2,436
  2,547
  2,663
  2,786
  2,915
  3,050
  3,193
  3,343
  3,500
  3,666
  3,839
  4,022
  4,214
  4,415
  4,627
  4,850
Discount rate, %
 
  9.50
  9.98
  10.47
  11.00
  11.55
  12.12
  12.73
  13.37
  14.04
  14.74
  15.47
  16.25
  17.06
  17.91
  18.81
  19.75
  20.74
  21.77
  22.86
  24.01
  25.21
  26.47
  27.79
  29.18
  30.64
  32.17
  33.78
  35.47
  37.24
  39.10
PV of cash for distribution, $m
 
  1,326
  1,235
  1,149
  1,059
  967
  874
  780
  689
  600
  515
  420
  351
  288
  232
  184
  142
  108
  80
  58
  41
  28
  19
  12
  8
  5
  3
  2
  1
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Rogers Communications Inc. is a communications and media company. The Company provides wireless communications services, and cable television, Internet, information technology (IT) and telephony services to consumers and businesses. Its segments include Wireless, Cable, Business Solutions and Media. The Wireless segment is engaged in wireless telecommunications operations for Canadian consumers and businesses. The Cable segment include cable telecommunications operations, including Internet, television and telephony (phone) services for Canadian consumers and businesses. The Business Solutions segment is engaged in network connectivity through its fiber network and data center assets to support a range of voice, data, networking, hosting, and cloud-based services for the enterprise, public sector and carrier wholesale markets. The Media segment has a portfolio of media properties, including sports media and entertainment, multi-platform shopping, digital media and publishing.

FINANCIAL RATIOS  of  Rogers Communications Cl B (RCI)

Valuation Ratios
P/E Ratio 44.2
Price to Sales 2.7
Price to Book 7
Price to Tangible Book
Price to Cash Flow 9.3
Price to Free Cash Flow 23.6
Growth Rates
Sales Growth Rate 2.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -4.2%
Cap. Spend. - 3 Yr. Gr. Rate 0.8%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 290.9%
Total Debt to Equity 321.7%
Interest Coverage 3
Management Effectiveness
Return On Assets 4.8%
Ret/ On Assets - 3 Yr. Avg. 6.4%
Return On Total Capital 3.7%
Ret/ On T. Cap. - 3 Yr. Avg. 5.5%
Return On Equity 15.3%
Return On Equity - 3 Yr. Avg. 22%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 51.8%
Gross Margin - 3 Yr. Avg. 52.5%
EBITDA Margin 31.1%
EBITDA Margin - 3 Yr. Avg. 35.2%
Operating Margin 13.8%
Oper. Margin - 3 Yr. Avg. 17.8%
Pre-Tax Margin 8.5%
Pre-Tax Margin - 3 Yr. Avg. 12.1%
Net Profit Margin 6.1%
Net Profit Margin - 3 Yr. Avg. 8.8%
Effective Tax Rate 28%
Eff/ Tax Rate - 3 Yr. Avg. 27.2%
Payout Ratio 118.3%

RCI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RCI stock intrinsic value calculation we used $10142 million for the last fiscal year's total revenue generated by Rogers Communications Cl B. The default revenue input number comes from 2016 income statement of Rogers Communications Cl B. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our RCI stock valuation model: a) initial revenue growth rate of 4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.5%, whose default value for RCI is calculated based on our internal credit rating of Rogers Communications Cl B, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Rogers Communications Cl B.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of RCI stock the variable cost ratio is equal to 80.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for RCI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.4% for Rogers Communications Cl B.

Corporate tax rate of 27% is the nominal tax rate for Rogers Communications Cl B. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the RCI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for RCI are equal to 131.8%.

Life of production assets of 9.4 years is the average useful life of capital assets used in Rogers Communications Cl B operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for RCI is equal to -6.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3900 million for Rogers Communications Cl B - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 514.379 million for Rogers Communications Cl B is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Rogers Communications Cl B at the current share price and the inputted number of shares is $27.3 billion.

RELATED COMPANIES Price Int.Val. Rating
BCE BCE 46.95 26.80  sell
TU TELUS 35.68 13.10  str.sell
SJR Shaw Communica 21.73 10.62  str.sell

COMPANY NEWS

▶ Apple Stock Falls On 'Anemic' iPhone 8 Demand, Production Cuts   [Oct-19-17 04:31PM  Investor's Business Daily]
▶ Rogers Communication beats 3Q profit forecasts   [07:23AM  Associated Press]
▶ Rogers Expands Wireless Service in Winnipeg, Manitoba   [Sep-28-17 10:30AM  CNW Group]
▶ Rogers Improves Wireless Service Across Alberta   [Aug-28-17 12:00PM  CNW Group]
▶ Rogers Improves Wireless Service across Vancouver Island   [Jul-31-17 11:30AM  PR Newswire]
▶ Rogers Communication tops 2Q profit forecasts   [Jul-21-17 12:24AM  Associated Press]
▶ 7 Tech Stocks That Dial Dividends Up To 14%   [May-21-17 08:12AM  Forbes]
▶ Rogers Communication beats 1Q profit forecasts   [04:50PM  Associated Press]
▶ Joe Natale to join Rogers April 19, 2017   [08:30AM  PR Newswire]
Financial statements of RCI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.