There are some shares out there which might be very troublesome to evaluate. On the one facet, traders who’ve been bearish could have been directionally right in current months. Nevertheless, with some corporations like Telus (TSX:T) nonetheless retaining very robust buyer retention and a cash-producing core enterprise, the query is how a lot to make into such current declines.
Certainly, this current decline is a notable one, notably over the previous 4 years. Let’s dive into whether or not traders could wish to contemplate the current bump as a shopping for alternative, why I feel this inventory is a maintain proper now, however may very well be a speculative purchase for some traders.
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There’s nonetheless an investing thesis right here
Telus continues to place up the sort of working metrics dividend traders prefer to see. In 2025, the corporate added a couple of million cell and stuck buyer additions. This amounted to business‑main internet provides for a fourth straight yr. Postpaid churn stays beneath 1%, underscoring a sticky buyer base and powerful community‑plus‑service bundle. That buyer progress is displaying up in money era, with adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) up about 3% in 2025 and file free money movement of roughly 11% yr over yr to about $2.2 billion.
Administration’s 2026 playbook is actually “stabilize and develop.” The Telus group is now guiding to 2–4% consolidated service‑income and adjusted earnings earlier than curiosity and taxes progress, whereas trimming capital expenditures (capex) to about $2.3 billion. That’s roughly 10% beneath 2025 ranges.
Given this decrease capital depth, paired with strong mid‑single‑digit EBITDA progress, I feel traders searching for free money movement to grind larger and step by step de‑threat the stability sheet could have one thing to know onto right here.
A dividend that’s nonetheless doubtlessly value contemplating
For revenue traders, Telus’s dividend stays the headline draw, with a yield within the excessive‑single‑digit vary round 9%. On a money‑movement foundation, the payout is extra manageable, with a payout ratio of roughly 45% of money movement. Nevertheless, earnings‑based mostly payout ratios north of 150% spotlight how dependent the dividend is on continued free money movement (FCF) progress and low capital spending. Administration has already paused dividend progress and is explicitly focusing on a 75% FCF payout and internet‑debt‑to‑EBITDA of about 3.3 occasions by the top of 2026, from roughly 3.5 occasions at the moment.
That mixture tells you two issues: the present dividend appears to be like moderately lined by money era, however there may be virtually no room for operational missteps or one other leg larger in charges. If Telus can hit its modest progress and capex targets, traders might receives a commission handsomely to attend for a gradual de‑leveraging story.
The underside line
I don’t suppose Telus is a screaming purchase proper now. In truth, there are causes the market is hesitant to totally re‑fee this title. Fourth‑quarter 2025 outcomes missed expectations, with earnings per share of $0.20 versus the $0.25 forecast and income about 3% beneath consensus. To me, this displays strain on wi-fi common income per consumer and weaker gear gross sales. Excessive leverage in a capital‑intensive sector and ongoing 5G/AI construct‑out wants imply Telus can’t merely starve capex to guard the dividend indefinitely.
Put it collectively, and Telus screens as a essentially sound, money‑generative telco at a reduced valuation, however with stability sheet and execution threat that justifies some warning. For current shareholders, that’s a maintain. For brand spanking new cash, this may very well be a inventory to contemplate accumulating step by step on pullbacks relatively than chasing aggressively on brief‑time period energy.