Shopping for high-quality dividend shares throughout pullbacks is usually a good method to increase your long-term returns. When share costs decline, dividend yields typically rise, giving traders a possibility to lock in engaging revenue streams whereas positioning themselves for potential capital positive aspects.
Whereas Canada’s broader inventory market has continued to climb, discount alternatives have turn out to be more and more troublesome to search out. That’s why traders ought to pay shut consideration when a basically sturdy dividend inventory trades at a significant low cost.
Nonetheless, one Canadian dividend inventory has fallen 16% over the previous yr. For long-term traders looking for dependable revenue and upside potential, this TSX inventory is price shopping for.
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A sexy dividend inventory to purchase now
Traders in search of engaging revenue alternatives may think about Telus (TSX:T). The Canadian telecommunications large has seen its share value decline by greater than 16%, making a compelling entry level for long-term traders. Because of this pullback, Telus now provides a dividend yield of greater than 9.7%, making it one of many highest-yielding dividend shares on the TSX.
The inventory got here underneath strain after administration introduced a pause in its dividend progress program. Whereas Telus maintained its quarterly dividend at $0.42 per share, the choice to droop future dividend will increase disillusioned the market and raised questions concerning the sustainability of its payouts.
Regardless of these issues, Telus has a confirmed historical past of rewarding shareholders. Over time, the corporate has constantly returned substantial money by means of dividends and share repurchases. Since 2004, Telus has returned about $25 billion in dividends.
For income-focused traders, the current share value weak spot may current a possibility to lock in a excessive yield from an organization with an extended monitor document of returning capital to shareholders.
Telus’s progress technique and enhancing steadiness sheet assist a bullish outlook
Telus is specializing in strengthening its enterprise and steadiness sheet, which is more likely to assist future progress. Additional, the corporate may proceed to reward shareholders with common payouts regardless of near-term operational and macroeconomic pressures.
Telus continues to develop its buyer base, retain subscribers at excessive charges, and generate stable free money circulate. On the identical time, administration stays centered on decreasing debt whereas benefiting from declining capital expenditure necessities. These traits ought to enhance monetary flexibility and assist long-term shareholder returns.
5G+ and AI driving progress
Telus’ progress is more likely to be pushed by its investments in PureFibre and 5G+, which strengthen its aggressive place and assist future subscriber progress. Investments in synthetic intelligence (AI) and a concentrate on attracting higher-value prospects additionally present alternatives for income progress and margin growth.
The telecom firm’s first-quarter 2026 outcomes highlighted the resilience of its enterprise, with the addition of 262,000 cell and stuck prospects pushed by continued demand for premium bundled providers. Administration expects free money circulate to develop at a compound annual fee of no less than 10% by means of 2028, supported by greater EBITDA, decrease capital spending, and operational efficiencies. This progress is predicted to fund each dividend funds and ongoing debt discount, with leverage focused at 3.3 instances or decrease by the tip of 2026 and three instances or higher by the tip of 2027.
Past telecommunications, Telus is increasing its progress platform by means of healthcare and digital providers. TELUS Well being continues to ship regular income and EBITDA progress, whereas Telus Digital is benefiting from rising demand for AI-related providers, with AI-driven income rising 22% yr over yr within the first quarter.
General, Telus’s rising subscriber base, diversified enterprise combine, strengthening money circulate, and enhancing steadiness sheet assist a optimistic long-term outlook.
