Telus Corp (T.TO)

Focus on the long term. Aggressive price competition coming in the space. Telus and BCE will be impacted the most, earnings will soften. Immigration won't be enough to offset the hit.

Usually trades at a premium because of faster growth and its lead on fibre to the home. Yield of 6.3%, best dividend grower in the sector. Lacks TV stations and sports teams, but has made forays into digital health. Good ROE. Balance sheet is leveraged. High multiple of 24x, so avoid on valuation.

The telcos have been punished. Telus is seeing lower lows. He got caught on this and may sell it.

Rising interest rates make its dividend yield less attractive. Hopefully rates will fall sometime next year, and before that telcos should start to base and move up higher. Interesting place to be for income-seeking investors. Yield is 6%.

Telcos have been hammered globally mainly due to Verizon and AT&T and potential lawsuit on lead. If those two names can hold in, then he doesn't mind nibbling at these levels. Limit risk at the lows we recently saw. Rotation this year away from defense.

The dividend is safe and in fact growing at the fastest rate among Canadian telcos at 5-7% this year. Pays 6.2%. He's about to buy more shares for himself and clients. Good long-term growth ahead because immigration is rising at high levels, a tailwind for Telus. But they're having problems with Telus International, so they lowered guidance. They invested in next-generation technology, good long term but will be lumpy. More competition comes with Shaw-Rogers, but this won't be a huge change. Shares are as cheap as they have been for a long time.

Does not own shares in company.
Share price weak the past year.
Stable business with legacy assets.
Strong dividend yield that is safe.
Pricing power with oligopoly.

Telecom business models under pressure due to toxic lead ingredients used in business.
Large debt loads will also be tough on business with rising interest rates.
Is a good time to buy given negative headlines.

Likes the space for income. Yield of 5.7%. Expects a bit of capital appreciation. Rogers buying Shaw may increase competition. Immigration should offset short-term price competition. She owns BCE for the higher yield of 6.6%. 

Recently sold. Really high multiple of 22x adjusted 2024 earnings. Debt servicing costs are going up. Regulatory environment in Canada is uncertain. 

Consolidation in the communication space, driving price competition. Market share gains are really tough. Thinks Rogers will come in and try to capture market share out West. As interest rates tick higher, dividend yield is less compelling when you can get the same return from bond-type investments.

A great company with revenue up 16% last quarter. It deserves a premium multiple based on their low churn. He models EPS growth at 9.5% from 2023-5. Great. But Quebecor will offer more competition and this trades at a rich 24x PE. Are better stocks.

The weakness does look to be across telcos in general, vs a Telus specific problem. We think it is a combo of concerns on slower growth, tougher inflation passthrough going forward, higher rates and relative attractiveness of dividends vs what you can get in bonds. Add in poor sentiment as well given recent performance. We don't think its a specific 'issue' at the company though. It probably does make sense to start slowly picking away at these types of names.
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He exited because fixed income returns matched Telus dividend. Also, he's concerned that consumer pressure on prices may eventually open the door to competition. 

High yielders with high interest rates make it a tough environment. Not worried about the Rogers merger. Spent lots of capex on their network. Will continue to do well. BCE has laid off people, changing how their business will look. Really nice dividend yield.

Avoid, along with all Canadian telecom names. Pricing pressure coming. Rogers' enhanced footprint will have most impact on Telus.