John Zechner Telus Corp T-T WEAK BUY Oct 01, 2024

It remains his favourite telco. Very well-managed. Have increased their dividend 27 times. Selling some of their infrastructure will be good to reduce debt. Still likes it.

Buy at this level or definitely hold on. He owns Quebecor and this. Like this. Well-managed. They were early investing in their infrastructure, and that capex cycle is coming down. This generate lots of free cash flow to increase their dividend each year (unlike BCE or Rogers). Telus has undervalued assets including in the health space, tech and real estate; can monetize these. Pays a great yield.

He invests in Telus bonds instead of the shares. Credit is very good, still investment-grade. Marketable assets. No issue with default in any of the big 3 telcos.

For the equity side: not a lot of growth, price competition, CRTC always making new rules. Big dividend is enticing, but not for him.

Everyone who wants a cellphone already has one. The market is not increasing. Not expensive. Trying to sell towers in the States, which makes sense. Core business is not growing the way it used to.

Still believes in it as a long-term investment. Tailwinds include decommissioning their copper infrastructure, selling some of their real estate and they are past the fiber-inflexible point in their investment. Cash flow growth looks good for years to come and should support the dividend. 

Below 200-day MA; also moving below 200-week MA, which is trending lower. Need interest rates to come down for this sector to do well. Yield is 7.64%, and that dividend could ease going forward. Tough space.

Dividends are not in doubt, but there has to be some way to pay down debt while growing the business. Right now, all you're getting is the dividend but very little growth.

Payout ratio is almost 100%. Dividend is not at risk; in fact, company said that it would be raised this year. Capex will be coming down, way ahead of peers on the capex spend on fibre to the home. As capex comes off, cashflows will go up, payout ratio will come down. 

Trades at premium, but it is the premium telco right now due to better financial condition. Stock will be range bound for now, but could be some growth longer term. Will pick up as macro environment improves.

Look at this instead of BCE. Better shareholder total return prognosis with similar risk. Dividend will likely grow, yield is similar to BCE's.

Tough environment. Trades at 20x PE for 2027, with 13% growth. So PEG isn't bad. Trying to make balance sheet better. Protected market share with Public Mobile brand, making it more price competitive. More resilient than BCE or RCI.B. Very well run. 13 analysts have upgraded in last 30 days, 0 downgrades.

Quiet place to put capital and collect the nice dividend. Not an "if", but a "when" thesis. The bottom probably isn't far off.