Telus Corp (T.TO)

BCE provides the cautionary tale. If things don't improve, Telus's dividend could be at risk. When you see a dividend that looks too good to be true, your spidey senses should tingle.

He owns no telcos, all are facing price and volume headwinds.

Its technicals look a bit rough and the risk/reward is less attractive today. The payout ratio is over 200% and it has lots of debt and competition. It's making a base so if it falls below that, sell.

He owns Rogers, instead. Telus is a good operator, but have stumbled along the way. Problem is, the dividend takes up all their free cash flow. So, can they grow into that huge 8.5% dividend distribution and pay down some debt and leave net cash on the balance sheet? Not sure if there will be a dividend cut, like BCE did.

Pricing pressure in the sector. Doesn't see appetite for another big telecom merger anytime soon. Any turnaround wouldn't happen on a dime, would base for a while.

In the sector, he'd rather look at BCE or RCI.B.

It had a bounce but is still down and has been in a downward trend for a long time. If it goes above $21 then you could say the trend is over, but it has to prove itself. There are better dividend paying stocks.

He picked it for asset sales and balance sheet repair, but nothing's really happened. New CEO could cut dividend. Still a great stock and a good place for new $$ today. You'll get a path to growth eventually.

Balance sheet is slowly slipping away, so it's paying the dividend out of capital. With new CEO, you're getting a "money man" replacing an "operations" person. Suspects he'll cut dividend further and get company set up for growth.

He's been in this job for 40 years, and every time a company cuts the dividend there are consequences. Not sure you want to stick around for that. Broken for a long time. Move on. If you don't own it, look elsewhere.

They are not happy with its performance but he likes the dividend. His strategy is to wait for a meaningful downturn in the market and since Telus tends to hold up better than the market, he would sell then and re deploy the cash.

Not many 9% dividends left in the market, so they bought this in the last couple of months for their income growth fund. Even if yield is cut to 5%, still one of the better yields in the market.

New CEO may lead to better things. Could sell Telus Health. Debt is an issue, and US rate cuts seem to be off the table. Tricky, but worth the risk.

Instead, look at ZWU. Not a great time to sell Telus and make the switch, but it's what he's been recommending.

If a dividend's cut, initial reaction is for stock price to fall. But a more reasonable dividend gives flexibility to buy back shares, pay down debt, do M&A. Short-term pain will give way to long-term gain for the company. 

Not increasing dividend, but they should just have cut it (as BCE did). New CEO might revisit this decision. Yield is 8.9%, unsustainable.

For the Canadian telcos, regulatory challenges won't go away. In response, the telcos pledged to invest in rural areas, but those areas now have Starlink. Also, Freedom Mobile and Quebecor have added a lot more competition. The telcos won't bounce back anytime soon.

Not a fan of the telcos; doesn't like the oligopoly.  All the telcos have declined from lower immigration to Canada. Valuation trades in line with peers. He's not excited by the space, but it's a decent place to hide your capital, paying a reasonable yield though there is a chance it could be reduced.

Great question. New CEO did a great job with CM. Last quarter was in line. Not looking for a lot of growth with the telcos. Hasn't seen a lot of pricing discipline, which is delaying recovery in these names.

Cheap, with an OK growth rate. Payout ratio too high. Nice dividend, but he thinks it probably (more than 50% chance) will be cut 30-40%. If so, stock likely to rally.