Telus Corp (T.TO)

Don't get attracted by a high dividend. He owns this, Rogers and BCE. He favours slightly Rogers because they monetize their sports assets. What's plagued all of them is wireless pricing in Canada. If you're overweight this, trim it.

See his BCE comments. Telus is okay, not amazing. Growth is low. You get the dividend and modest growth. He prefers Quebecor.

Largest telecom provider of services that people use every day. Wireless competition remains intense -- offsetting that by growing health and digital services. Decided to pause dividend increases, now almost 9% yield for a telco that isn't going anywhere. She continues to hold for the income, especially good for retirees. Not a bad time to add. Ranks 9/10 on value. Analysts see 26-27% upside from here.

A turnaround story over next 12-24 months. Be patient.

A lot of these companies talk about dividend growth and increase their dividends on an ongoing basis. Telus is basically stopping that, just keeping the dividend where it is. He rather wishes they'd cut the dividend. That would have been a better move with the stock already having fallen a lot, and it might have bounced back.

The environment for these companies has been very difficult. Fruition of 5G not happening as quickly as people were thinking. CRTC is also very difficult to deal with. This name has developed other businesses which will benefit it, and it's still in his dividend portfolio.

Sees it coming back from the recent dividend announcement. Paused dividend growth aspirations after taking a hard look at balance sheet, organic growth, and competitive intensity. Really didn't want to become the next BCE. Still thinks shares are undervalued. Likes unpriced catalysts such as urban real estate.

Disappointing performer, but he's going to be patient with this one.

Really good job communicating the company message -- how committed it is to the dividend. When BCE showed that it wasn't as committed, that stock went down by a third. Probably the strongest management team in the industry, applauds them for being on the side of the shareholder. Valuation has come down a lot, so you could consider it.

Doesn't own due to the growth profile. More positive on this name than almost all other telecoms.

Thinks we'll see this stock behave similarly to BCE stock in recent years. (Though BCE does have a few other issues than Telus has.) Pressure will continue. 

That's why he's been recommending ZWU for dividend seekers, as it gives you a better yield at the end of the day and more diversification.

It is at a 52 week low and there is concern they may cut the dividend which is 9% They are freezing it now. It can take advantage of more free cash flow because a lot of Capex is done. The catalyst for the stock to go back up is confidence in its ability to grow. The telecom business is not as attractive as it used to be because of a lot of competition.

A surprise to him similar to TD, but in the opposite direction. Once BCE cut its dividend, there was blood in the water and gave people a reason to run away from its closest peer, Telus. But Telus is in a bit of a different situation.

Its big, decade-long capex spend on fibre to the home started 2-3 years earlier. Had an easier time of it, as it was in jurisdictions with newer infrastructure. Doesn't think they have to cut dividend. Market may have preferred them to pay down debt faster, and this is short-term thinking. ENB and ALA faced similar market pressure around 2017-18, and look where they are today.

Competition in Canada has been tough but it won't be forever, and these are forever assets. Don't sweat the small stuff, buy it here.

Price has struggled. Company recently announced a pause on dividend growth. Business not really growing, but it kept increasing dividend. 

If you bought this for the dividend, you should feel slightly more comfortable that the dividend is now sustainable. Company wants to get back to a place where it earns its dividend, and that's really what you want. Watch to make sure the payout ratio keeps coming down so that eventually it's earning more than the dividend. Stock price may move in anticipation of that. Now seeing some rotation and stock consolidating as some investors see an opportunity to get in, while others have just had enough and get out.

His firm likes to see confirmation from price momentum, so this isn't one he'd own.

CEO has been a great steward of capital for a long time. Industry has changed, as has the immigration landscape. Debt profile has changed. These things happen. Key will be asset sales -- real estate, towers, other infrastructure. US telcos, for example, have an asset-light model. Freezing dividend growth is the right thing to do. Need to see some discipline in the wireless marketplace for the telco names to turn around. Unfortunately, some brands are cutting prices.

Probably #1 in his list of high-conviction names that have been unfairly punished during tax-loss selling. Cheaper than it ought to be. All things being equal, should be higher in January than now. Trades at 15x for its growth profile and dividend. He'd be more a buyer than a seller.

The discounted dividend reinvestment plan allows shareholders to invest dividends into T’s shares at a discount. However, the discount is expected to gradually go down from 2% now to no discount in 2028. If the discount is eliminated in full now, shareholders may not choose to reinvest, which may put further pressure on the company’s share price. DRIP dividends of course do not require cash and T is trying to maintain flexibility. 
The risk of a dividend cut is moderate, although the dividends in the trailing twelve months are covered by free cash flow ($1.6B vs. $1.9B). The net debt/EBITDA level is quite high, standing at 5.5x — the highest levels. There is a possibility that T’s management cuts the dividend to pay down debt faster, but it is quite unlikely for now (could change). For now, T expects to reduce debt levels by growing earnings organically. The company has been in a huge capital investment cycle over the last few years. The market likes today's news. We would be OK with T as a 'slow accumulate'. There is still work to be done here, but the company recognizes its issues, at least. 
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Challenged recently. People are a bit nervous about the dividend being cut. Yield is 9%, which seems high. Business is stable, but growth has slowed. Ongoing pressure on cashflow, so dividend could be at risk if conditions worsen. Aiming to diversify revenue, which she sees as improving long-term growth prospects. Value 9/10.

She remains cautious. At 50% of a TFSA, that's a heavy weight. But she'd ride it out and continue to hold.

He's seen this story so many times when an entity commits itself to a growing dividend. His rule of thumb is that once the yield gets above 8%, there's a cut coming. As for the payout ratio, it's over-distributing. Market's telling you dividend will be cut, and that makes sense. 

We can get too enamoured by dividends sometimes, and there's no free lunch. Dividend can be high, but then the stock price is down. Yield is 9%.

The telco sector is unloved now.  ZUU gives you better income and a more diversified way. Telus could face more selling during tax-loss season, but you can accumulate on that weakness.  It'll be a few years before any telco is a fundamental buy.