Pierre Bernard Telus Corp T-T COMMENT May 21, 2008

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.

Become differentiated when you drill into the metrics. Both suffering from credit downgrades. Took on a lot of debt for 5G buildout, but weren't able to increase pricing. Number of immigrants has slowed. Lots of price competition, just as elsewhere in the world.

In last quarter, increased dividend. Less risky than BCE right now. Debt/equity ~150%, so not as much onus on debt repayment as for BCE. Has the potential of other operations like TIXT and Telus Health, so it's doing other things outside of just telecom; appears to be promising growth, but we'll see.

In last quarter, BCE cut dividend. Debt/equity is at 200%.

Whole telecom space has been challenged, partly because of increased competition. No outlets to grow outside Canada. Profitability will be flat for some time. People own these names for the income. Rogers' purchase of Shaw gives it an edge on cost-cutting. Telus is the best operator. Rogers has the lowest dividend yield of the group.

Steer clear of the space. Even with an income stock you do want some growth, as it helps offset valuation risk elsewhere in the business.

Maybe tide is turning on competitive intensity in telecom sector, but not overwhelmingly obvious that's so. His preference in the space. Better business, better assets, and stronger balance sheet than competitors. Expects good dividend growth for his dividend growers mandate.

Right now, she has no exposure to the sector. Very competitive. Decrease in immigration takes away source of potential growth. They all provide a pretty attractive yield. Telus is an income stock, and perhaps they can increase it a bit each year, but the fundamentals of the sector aren't that attractive.

If you hold, sell, and look for a more attractive income stock in a sector with a better outlook.