The TSX has a number of high-quality dividend payers with an extended monitor document of rewarding shareholders by resilient and rising distributions. Amongst these high dividend shares, Telus (TSX:T) stood out for its stable dividend funds over time.
Since 2004, Telus has returned roughly $30 billion to buyers by dividends and share buybacks. Of that whole, roughly $25 billion was paid out in dividends, whereas about $5.3 billion was used to repurchase shares.
Regardless of this spectacular monitor document, shares of this main telecommunications firm have come below strain, falling greater than 20% from the 52-week excessive.
Supply: Getty Photographs
What’s behind the decline in Telus inventory
The weak point on this TSX inventory displays considerations about Canada’s more and more aggressive telecom panorama. Aggressive pricing methods throughout the business are pressuring margins and weighing on near-term earnings progress.
Telus’ dividend coverage has additionally performed a key position within the inventory’s decline. In Could 2025, Telus reaffirmed its dedication to dividend progress, outlining plans for semi-annual will increase and concentrating on annual dividend progress of three% to eight% between 2026 and 2028.
Nevertheless, on December 3, 2025, Telus introduced a pause in its dividend progress program. Whereas the corporate maintained its quarterly dividend at $0.4184 per share, the choice to halt additional will increase weighed on the inventory worth.
Administration said that the transfer will assist strengthen the stability sheet and scale back its internet debt-to-EBITDA leverage ratio to roughly 3 times by the tip of 2027. Nevertheless, buyers seem cautious that heightened competitors might restrict Telus’s means to generate the regular earnings enlargement that has traditionally supported each capital returns and dividend progress.
Right here’s why to purchase this TSX dividend inventory
Whereas the choice to pause dividend progress has weighed on the corporate’s inventory worth, the transfer to deleverage the stability sheet enhances monetary flexibility and positions Telus for extra sustainable long-term progress.
The broader working backdrop stays difficult. Competitors throughout Canada’s telecom sector has intensified, significantly in wi-fi. To defend market share and help buyer retention, Telus has adjusted pricing in its Cellular section. That technique has compressed margins and weighed on earnings within the brief time period. Thus, strengthening the stability sheet and enhancing monetary flexibility positions it to ship sturdy progress.
On the similar time, Telus’s fundamentals stay intact. Telus continues to profit from its in depth wi-fi infrastructure and increasing PureFibre community, which helps subscriber progress. Additional, its bundled service choices are serving to deepen buyer relationships and scale back churn.
Additional, Telus is emphasizing higher-quality, extra worthwhile subscriber additions slightly than pursuing aggressive quantity progress. Over time, this focus ought to assist restore margin stability. It’s tightening prices and bettering effectivity. On the similar time, its well being section is contributing meaningfully to its progress, diversifying its earnings streams.
The corporate’s capital expenditures are anticipated to reasonable following a number of years of elevated community funding. As spending declines, free money circulate technology ought to enhance. Stronger free money circulate and ongoing asset monetization initiatives will speed up debt discount and additional strengthen the stability sheet.
Trying forward, its high-quality community, an increasing fibre footprint, rising subscriber base, and concentrate on deleveraging the stability sheet augur effectively for progress.
Even with dividend progress paused, the present annual dividend yields roughly 9%. For income-oriented buyers prepared to tolerate near-term volatility, the current share worth pullback and excessive yield current a sexy entry level.