Operating Margin - Shaw Communications Inc (TSX:SJR.B)

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Price: 40.48 CAD 0.02%

Market Cap: 20.2B CAD

23.6%

Current

23%

Average

2.1%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

23.6%

Operating Profit

1.3B

Revenue

5.4B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
CA		Shaw Communications Inc TSX:SJR.B	20.2B CAD	24%
US		Comcast Corp NASDAQ:CMCSA	99.5B USD	18%
ZA	M	MultiChoice Group Ltd JSE:MCG	52.9B Zac	9%
US		Liberty Media Corp NASDAQ:FWONA	29.5B USD	12%
US		Charter Communications Inc NASDAQ:CHTR	26.7B USD	25%
BE	T	Telenet Group Holding NV F:T4I	11.7B EUR	18%
CN	C	China Satellite Communications Co Ltd SSE:601698	97B CNY	9%
DE	K	Kabel Deutschland Holding AG XHAM:KD8	8.3B EUR	24%
CA		Quebecor Inc TSX:QBR.B	11.9B CAD	27%
US		Sirius XM Holdings Inc NASDAQ:SIRI	7.3B USD	23%
US		Liberty Broadband Corp NASDAQ:LBRDA	6.9B USD	12%

Shaw Communications Inc
Glance View

Economic Moat

None

Market Cap

20.2B CAD

Industry

Media

Nestled within the vast landscape of Canada’s telecommunications industry, Shaw Communications Inc. emerges as a dynamic player, weaving a narrative that starts with its roots in Edmonton, Alberta, in 1966. Founded by JR Shaw, the company kicked off as a community cable provider amidst a nascent era of connectivity, steadily growing into a substantial telecommunications force. Shaw's story is one of leveraging evolving technologies and consumer needs, moving from its initial cable offerings to become a multifaceted entity. Today, Shaw Communications provides an array of services, including broadband Internet, television, and phone services, primarily across Western Canada. The company has strategically evolved, adapting to the shifts in consumer preferences and technology, ensuring it remains relevant in a competitive market. Shaw’s business strategy is fundamentally tied to its ability to offer bundled service packages that cater to the diverse demands of modern consumers. By bundling these services, Shaw not only maximizes consumer retention but also optimizes its revenue streams. At the core of its operations, revenue generation revolves around subscription-based models, where customers pay for access to Shaw’s bespoke suite of services, often customized for residential and business clients alike. With the expansion of its broadband Internet services, Shaw has capitalized on the increasing demand for high-speed internet, further complemented by its FreeRange TV platform, which provides streaming services. These strategic moves are telltale signs of Shaw's robust approach to navigating a landscape challenged by fierce competition and rapid technological advancements.

View SJR.B Analysis

SJR.B Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Shaw Communications Inc
TSX:SJR.B