UBS analyst Jeffrey Fan says Shaw Communications Inc. (NYSE:SJR) should continue to trade at a premium because of its exposure to western Canada, growing dividend yield and high free cash flow margin.
The company reported in-line Q109 results on Friday, Jan. 16, and chief executive Jim Shaw told analysts that the company had not seen a slowdown because of the deteriorating economy. Indeed, in the Discussion and Analysis section of Shaw’s quarterly report, management said there had been no change in risks or uncertainties facing the company over the second half of last year.
That said, Mr. Fan expects the economic conditions to eventually weigh on the company. Growth in revenue, EBITDA and the amount of money the company generates per cable subscriber will likely slow to the low single digits this year, he said, describing the company as resilient.
He also notes that Ron Joyce will have greater flexibility in selling the estimated 4% of outstanding class B shares he owns now that he has retired from the board.