Dividend shares can play an important position in long-term wealth creation, as they provide buyers a mix of capital appreciation and regular passive earnings by common dividend payouts. Firms that persistently pay dividends usually function mature and well-established companies that generate steady money flows, enabling them to reward shareholders even throughout unsure financial intervals. Because of their resilient enterprise fashions and reliable payouts, dividend-paying shares are typically much less susceptible to financial downturns and broader market volatility.
Though Canadian fairness markets have rebounded sharply in latest weeks, a number of high quality corporations proceed to commerce nicely beneath their latest highs. One notable instance is Telus (TSX:T), whose inventory stays greater than 26% beneath its latest peak. In opposition to this backdrop, let’s study Telus’s latest efficiency, progress outlook, dividend profile, and valuation to find out whether or not the telco presents a sexy shopping for alternative for long-term buyers.
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Telus’s first-quarter efficiency
Telus is certainly one of Canada’s three largest telecom suppliers, providing nationwide wi-fi and broadband companies to shoppers and companies. Final month, the corporate reported blended first-quarter outcomes, with income declining 0.6% 12 months over 12 months, pushed by weaker contributions from its TELUS Expertise Options and TELUS Digital segments. Nevertheless, stronger efficiency from the TELUS Well being division partially offset the decline.
Amid softer income and elevated working bills, Telus reported internet earnings of $144 million, down from $301 million in the identical quarter final 12 months. Excluding one-time and non-recurring gadgets, the corporate reported adjusted earnings per share (EPS) of $0.23, a 11.5% year-over-year decline. In the meantime, adjusted EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortization) slipped marginally by 0.2% to $1.84 billion.
Regardless of these near-term pressures, Telus generated stable free money move progress through the quarter, rising 19.5% to $583 million, largely pushed by decrease earnings tax funds.
Having reviewed its latest quarterly efficiency, let’s now study Telus’s long-term progress prospects.
Telus’s progress prospects
The continued growth of e-commerce, distant work, and studying, and the rising adoption of synthetic intelligence (AI) applied sciences are driving greater demand for dependable telecommunications companies, making a beneficial setting for Telus. To capitalize on these traits, the corporate continues to take a position closely in increasing its 5G wi-fi and broadband infrastructure, which ought to assist the corporate develop its subscriber base and strengthen its long-term monetary efficiency.
Past its core telecom operations, Telus can also be increasing its healthcare and digital companies by a mix of acquisitions and natural progress initiatives. The corporate continues to strengthen its presence in digital medical data options, affected person well being administration companies, well being advantages administration, and digital healthcare companies, all of which may grow to be significant long-term progress drivers.
For 2026, administration expects consolidated service income and adjusted EBITDA to develop by 2-4%, whereas forecasting free money move of roughly $2.45 billion, representing year-over-year progress of about 10%.
Supported by enhancing money move technology, Telus has additionally been centered on lowering leverage. Administration expects its internet debt-to-adjusted EBITDA ratio to say no to three.3 by the top of this 12 months and additional enhance to three.0 by the top of subsequent 12 months. Given these initiatives and growth alternatives, Telus seems well-positioned to ship regular, long-term progress.
Traders’ takeaway
Telus has confronted vital strain over the previous few years as a consequence of intensifying competitors in Canada’s telecom business, elevated debt ranges, and the suspension of its multi-year dividend-growth program. In consequence, the inventory has declined roughly 26% from its 52-week excessive. Nevertheless, this pullback has additionally made the valuation extra enticing, with Telus at present buying and selling at a next-12-month price-to-sales a number of of simply 1.3.
In December 2025, the corporate paused its long-standing dividend-growth program as a part of its broader effort to strengthen its stability sheet and speed up deleveraging initiatives. Regardless of that transfer, the corporate continues to supply a sexy quarterly dividend of $0.4184 per share, yielding roughly 9.79%.
Whereas some buyers stay involved in regards to the sustainability of the payout given the corporate’s elevated payout ratio, any future dividend adjustment may finally enhance Telus’s monetary flexibility by enabling quicker debt discount and reinforcing its stability sheet.
Given its discounted valuation, resilient telecom operations, increasing healthcare and digital companies, and ongoing deleveraging efforts, Telus seems well-positioned for long-term restoration and may very well be a sexy alternative for income-focused buyers prepared to tolerate near-term volatility.
