Rogers Communications' CAD 0.50 Dividend: A Steady Hand in Volatile Markets?

Rogers Communications’ recent declaration of a CAD 0.50 per share dividend for Q2 2025 underscores its commitment to shareholder returns, even as the telecom sector grapples with regulatory shifts and technological competition. With a forward yield of 4.94%—among the highest in Canada’s telecom space—the dividend offers a compelling income play. But how sustainable is this payout, and what opportunities does it present for investors?

The Dividend Details: A Reliable Payout Machine?

The CAD 0.50 quarterly dividend, consistent since late 2023, translates to an annualized payout of CAD 2.00 per share. This represents a 4.94% yield as of April 2025, based on a share price of approximately CAD 40.50. The dividend is payable on April 2 to shareholders of record by March 10, with an ex-dividend date aligning with the record date.

Crucially, Rogers has maintained dividend consistency for over a decade, with no gaps since 2015. This reliability is underpinned by robust financial metrics:
- Revenue growth: CAD 20.6 billion in 2024, up 7% annually, driven by wireless and media segments.
- Adjusted EBITDA: Increased by 12% to CAD 9.6 billion, reflecting operational efficiency.
- Free cash flow: CAD 3.045 billion in 2024, supporting a projected 39% payout ratio by 2025 if earnings grow as forecasted.

The DRIP Advantage: A 2% Boost for Long-Term Holders

The Dividend Reinvestment Plan (DRIP), amended in August 2023, now offers a 2% discount on shares purchased from the company’s treasury. For Canadian and U.S. investors enrolled in the plan, this effectively reduces the cost basis of their holdings.

For example, if the average market price is CAD 40.50, the DRIP price becomes CAD 39.59, saving CAD 0.91 per share. Over time, this compounding discount could significantly enhance returns. Existing DRIP participants have benefited since October 2023, with new enrollees able to join via brokers or Rogers’ investor portal.

Tax Efficiency: A Canadian Taxpayer’s Sweet Spot

All dividends are designated as “eligible dividends” under Canadian tax law. This designation provides a 50% gross-up and preferential tax credit, making them more tax-efficient than non-eligible dividends. For a Canadian investor in Ontario’s top tax bracket (53.53%), the effective tax rate on eligible dividends drops to 20.15%, compared to 29.38% for non-eligible dividends.

Risks and Considerations

While Rogers’ dividend appears secure, risks linger:
1. Regulatory headwinds: Ongoing scrutiny of telecom consolidation and potential price caps could pressure margins.
2. Debt management: Though leverage improved to 4.5x, further acquisitions or infrastructure spending might strain balance sheets.
3. Dividend dependency: The payout ratio, though low at 39%, could rise if earnings disappoint.

The Bottom Line: A Solid Bet for Income Investors

Rogers’ dividend stands on a foundation of strong free cash flow, dividend sustainability, and a DRIP with tangible benefits. With a yield near 5%—well above the TSX average of ~3%—and a payout ratio under 40%, the dividend is both attractive and defensible.

For long-term investors, the 2% DRIP discount adds a compounding advantage, while the tax efficiency for Canadian residents further sweetens the deal. However, those wary of sector-specific risks may want to pair this holding with broader telecom exposure or defensive sectors.

In conclusion, Rogers’ CAD 0.50 dividend is more than a quarterly check—it’s a signal of financial discipline and shareholder focus. Backed by CAD 20.6 billion in revenue and a 46% EBITDA margin, the payout appears secure. For income seekers, this telecom giant remains a compelling play in a yield-starved market.