The Best Canadian 5G Stock to Buy Right Now

Here’s why I think Rogers Communications (TSX:RCI.B)(NYSE:RCI) remains the top 5G pick in Canada’s telecommunications sector today.

| More on:

The 5G revolution is one that is perhaps less exciting than other paradigm shifts in the market. Indeed, the growth catalyst 5G provides for the telecom sector is one that’s a long burn. It will take many years for investors to reap the benefits of the infrastructure improvements telecom players are making today.

However, it’s undeniable the improvements that are coming via 5G. Improved data speeds and minimized latency provide a data-hungry user base with better, faster connectivity. And companies like Rogers Communications (TSX:RCI.B)(NYSE:RCI) are leading the way in bringing this technology to the masses.

Here is the key reason why investors are honing in on Rogers as an excellent long-term 5G pick.

Shaw Communications deal provides a tonne of potential upside

Without a doubt, the $20 billion takeover bid for Shaw Communications (TSX:SJR.B)(NYSE:SJR) is huge for investors. Indeed, it appears that there is a lot of optimism in relation to this acquisition. However, I expect this merger to be more beneficial for Rogers than Shaw.

Rogers will be able to roll out the 5G technology much faster than the other players in the market. Furthermore, this deal allows the company to expand its operations in Western Canada, which requires a significant amount of investment when it comes to 5G infrastructure.

Once this acquisition is complete, Rogers will become the second-largest telecommunications company in the country. It will overtake Telus to compete with BCE, which is currently leading the market. There’s huge upside for shareholders considering the potential size of this company following the completion of this takeover. Indeed, there’s plenty of optimism among analysts in relation to the potential value that could be generated once this acquisition is complete.

The acquisition is not a done deal yet

Investors must note that there’s still a lot of speculation going on as to whether this deal will eventually materialize or not. Since this takeover will be a game changer for the telecommunications space, a regulatory review will take place. Nevertheless, it appears that there’s a tonne of optimism around the deal going through right now.

Canada has a reputation for having a relatively lenient regulatory process when compared to that of other countries. Indeed, regulators of this country have given the green light to big deals similar in size and scale to this one recently. Accordingly, the market appears to be correctly pricing in lower regulatory risk with this deal today.

Indeed, I think if Rogers were to tie up with an international counterpart, this risk level would be much higher and would be priced accordingly.

Bottom line

With the race to 5G supremacy on, now’s the perfect time to start considering the best way to play this space. For those who believe this major acquisition will take place, Rogers is a great bet today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends ROGERS COMMUNICATIONS INC. CL B NV.

More on Dividend Stocks

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »

young people stare at smartphones
Dividend Stocks

GST/HST “Vacation”: Everything Canadians Need to Know

The GST/HST "vacation" is a little treat for the holidays, along with a $250 payment. What should you do with…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »