Shaw Communications Research Updated - Analyst Blog

On Apr 25, 2014, we issued an updated research report on Shaw Communications Inc. SJR.

Shaw Communications has delivered positive earnings surprises in two of the last four quarters last year, with an average beat of 0.16%. The company reported encouraging financial results for the second quarter of fiscal 2014 where both the top and the bottom line surpassed the respective Zacks Consensus Estimate.

Shaw Communications is gradually expanding its Wi-Fi network across Western Canada and has also formed a pact with Winnipeg and Victoria municipalities to extend coverage in those areas. Currently, the Shaw Go WiFi facility is available in over 35,000 locations in Canada.

Also, Shaw Communications has deployed high-speed DOCSIS 3.0 network in several western Canadian markets under the brand name of “Nitro Internet Service.” This technology offers 100 Mbps of download speed. Moreover, the company is authorized to repurchase 20 million shares within a period of one year. Such a substantial share buyback plan coupled with increased dividend payments will continue to drive shareholders wealth.

On the downside, Shaw Communications offers triple-play cable TV and satellite TV, Internet, and wireline phone services, whereas its main competitor, TELUS Corp. TU, provides cable TV, Internet, wireline, and wireless services. Telus shares a national wireless network with Bell Canada, a division of BCE Inc. BCE. Its popular Optik TV, offering IPTV services, is quickly eroding Shaw Communications' market share. To worsen matters, considerable debt, rising capital expenditure and deteriorating cash position may act as headwinds for the company moving ahead.

Shaw Communications currently carries a Zacks Rank #3 (Hold).

A better-ranked stock worth considering in this sector is Comcast Corp. CMCSK with a Zacks Rank #2 (Buy).