Stock Evaluation
Company Description: COGECO 8 Jan 2025
Company description: “Cogeco Communications Inc. is a telecommunications company, which operates through its business units Cogeco Connexion and Breezeline. It provides Internet, video and wireline phone services in Canada, and in 13 states in the United States (U.S.) under the Cogeco Connexion, oxio, and Breezeline brand names. Breezeline also offers wireless services in most of the U.S. states in which it operates. It operates in two segments: Canadian telecommunications and American telecommunications. The Canadian telecommunications activities are carried out by Cogeco Connexion in the provinces of Quebec and Ontario. The American telecommunications activities are carried out by Breezeline in states: Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, New Hampshire, New York, Ohio, Pennsylvania, South Carolina, Virginia and West Virginia. The segments provide a range of Internet, video and phone services primarily to residential customers and business services across their coverage areas."

Business Valuation Algorithm Criteria in 10 Steps 

Step 1: Marketplace
Is the marketplace expanding? - Yes, but tight market
Is the company’s share of the marketplace expanding?​- Yes, but tight market
​Does this marketplace have good profit margins?
Yes at 12.13% x $3.0B revenue (Med Green Flag)

Step 2: Leadership
Does the company display strong leadership, entrepreneurial character and competitiveness?​
On 11 March 2024, Frédéric Perron succeeding Philippe Jetté, who retired, as CEO. (Neutral Flag)

Step 3 Earnings
Have earnings been rising during the last 3 years? 
Are earnings projected to continue to go up this year and next year?
No, earnings have been flat. (Neutral Flag)

Step 4 Cumulative Earnings
What is the cumulative value of 5 years of earnings shown compared to the stock price? 
61.2% (Big Green Flag)

Step 5 Price to Earnings Ratio
What is the price over earnings? 
8.4 (Big Green Flag for value)
What is the 5 year growth percentage? 
18% (Big Green Flag )
What is the 5 yr growth % compared to the P/E? 
1% growth vs 8.4 P/E (Red Flag)
What is the 5 yr growth % compared to next years growth %? 
1% vs -1% next year growth (Red Flag)

Step 6 Dividends
Is the dividend generous (ie: above 4%)?
5.37% (Big Green Flag)
Is the dividend easily covered by earnings?
E = 2x Div (Green Flag)
Is the stock a dividend aristocrat (ie: dividend growth on a yearly basis over 25 years).
Yes (Green Flag)

Step 7 Global Reach
Does the company sell globally?
Yes, in US & Canada (Green Flag)

Step 8 Directors
Do the directors own more than 10% of the company?
Management owns 80.0% (Big Green Flag)
Are directors adding to their share ownership? 
No.  (Neutral Flag)
Is the company buying back its shares?
No.  (Neutral Flag)

Step 9 Using AI as a tool to confirm a stock information
To Gemini: is Cogeco CCA a good stock to buy now?

According to some sources, Cogeco Communications Inc. (CCA.TO) could be
a good stock to buy for investors looking for a reliable income stream and future growth: 

Dividend yield: Cogeco has a 5% dividend yield and a history of consistent dividend payments. 
Revenue growth: Cogeco has seen recent revenue growth. 
Customer experience: Cogeco is focused on improving customer experience. 
Operational efficiency: Cogeco is focused on improving operational efficiency. 
Track record: Cogeco has a solid track record of performance. 
Customer base: Cogeco has been steadily growing its customer base. 
Service offerings: Cogeco has been expanding its service offerings. 
Balance sheet: Cogeco is focused on maintaining a strong balance sheet. 


Final Thoughts
There are red green and neutral flags on this stock. Right now the market place is suffering from intense competition from the heavyweight incumbents, Bell, Telus and Rogers, but Cogeco is showing a strong consistent (albeit not growing) profit line. The new CEO may help this company get back onto a growth line. Based on analysts estimated earnings projections found on LSEG, the price is projected to almost triple from $68.71 to $182.35 over the next 5 years. This is considered a value buy as its present price is below a discounted 5 year growth rate of 20% to meet that $182.35 target price. 

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Algorithm