Investors: Buy Telus Corporation for the Dividend and Long-Term Growth

Telus Corporation (TSX:T)(NYSE:TU) is the perfect stock to buy. It has a great dividend, long-term growth, and promising results.

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The Motley Fool

Investors are often told to diversify their holdings to balance out investments for long-term growth and dividends. When a company comes along that offers both of these, it can be a solid addition to any portfolio.

Telus Corporation (TSX:T)(NYSE:TU) is one such company. Telus is one of the largest telecommunications companies in the country with service offerings in the wireless, phone, and Internet markets.

Here’s a look at how Telus is doing and why it belongs in your portfolio.

How is Telus doing?

Telus currently trades at just under $40, midway between the 52-week high of $45.19 and the low of $35.51. Year-to-date, the stock is up by 3.45%. Expanding this out to a full 12 months shows a decrease in stock price by nearly 11%.

One of the most impressive aspects of Telus is the dividend. Telus currently pays out a quarterly dividend of $0.44, giving the stock a yield of 4.45%. Beyond having one of the best payouts on the market, Telus has an established history of raising the dividend–and it is likely to continue the practice as a 10% increase is currently targeted for 2016.

Consensus among analysts is that Telus remains a sound investment option with ratings ranging from buy to hold. Price targets are seen as high as the mid $40s in some cases, with more conservative views coming in lower in the mid $30s.

Recent results look impressive

In the most recent quarter Telus reported revenues of $3.217 billion, an increase of 2.8% over the same quarter in the prior year. Net income saw a decrease of 16.3% to $261 million over the same quarter in the prior year; the company attributed the decrease to restructuring and other costs. Adjusted earnings per share came in at $0.54 per share, an increase of $0.01 over the same quarter last year.

The company added 109,000 new wireless postpaid customers to the TV and Internet segments.

Looking ahead to 2016, the company announced a series of targets that forecast the company continuing to show moderate growth. Revenue targets for the year ahead are slated to be in the $12.75-12.85 billion range. This reflects a modest 2-3% growth over the 2015 number of $12.502 billion.

In terms of increasing shareholder value, the company has a share-buyback program in place that will run until September 2016 with up to 16% of the outstanding common shares potentially available for purchase at a cost of nearly $500 million.

As far as investment opportunities go, Telus is one of the best options on the market now for those investors who are after long-term growth and a healthy (and growing) dividend.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any stocks mentioned.

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