Telus Corp (T.TO)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. A good choice for sustainability and reliability. Telus offers more overall growth potential than its peers. Unlock Premium - Try 5i Free

Tremendous franchise. Taking a divergent path from Bell and Rogers, as they're taking on various pet projects. Trusts management, great acquirers. Should continue to increase dividends 5-7% per year. Good for balanced portfolios that need income. His preferred name in the space.

Both telecom stocks in Canada and US have been stagnant to some extent. The runway for growth for wireless in Canada is very strong. It is more exposed to Shaw's move to wireless than BCE and Rogers. It is trading at 9x EBIDTA which is high, but the dividend is at 5% and the growth rate should increase. Good stock for income investor.

The telecoms in Canada are sluggish now, because they have a lot of capex which limits their EPS. Telus is different because of its Healthnet service that they will roll out. Rogers is into sports. The dividends are roughly the same in this group, but where is the growth going to come from in this sector? Again, they'll be spending heavily for the 5G roll-out. He avoids this space.

Telcos & utilities' outlook in the work-from-home era Rogers got hit when sports were cancelled/postponed and their broadcasting business may be impacted if MLB baseball is cancelled. Who knows? With Telus, you're taking less media-related risk. Telus is down 20% from its peak and pays a dividend over 5% that should rise. He sees no problems with telcos and utilities going forward, because the work-from-home trend will support them. But with both classes, some investors consider them boring (flat share price despite high dividend) and moved into growth/tech stocks. The dividend payers are now unloved, but history teaches us that that is precisely when to buy them.

A risky telco? He does not own RCI in his portfolios. The dividends are secure, but he prefers BCE and T. They are all facing similar challenges. He thinks RCI has not been as good at controlling costs.

Sell Telus and buy Eldorado Gold? They're totally different companies, different stories. Can't compare them. Eldorado's valuation is extended, so he'd look elsewhere. Stick with telecoms, which pay decent income and offer decent growth. People are using more bandwidth. Infrastructure and telcom stocks have been overlooked as investors have chased the tech high-flyers.