This Telecom Stock Could Be Poised for Big Gains

Here’s why Telus (TSX:T) remains a top telecom stock that all long-term investors may want to consider to battle market uncertainty right now.

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Over the years, the telecom industry has become an important part of the Canadian economy. Companies in this sector exhibit stable growth in the long term, making them suitable for a variety of investors. However, there is an intense amount of competition in this market segment. Thus, it is essential to invest in a telecom company that has the potential of securing big gains. 

In this regard, Telus (TSX:T) could be an excellent choice.

Here are a few reasons why. 

Telus announces its Q4 and 2022 full-year reports

In order to understand why Telus could be poised for long-term growth, it’s a good idea to take a look at how this company has performed in the past. The company’s fourth-quarter (Q4) 2022 numbers certainly paint a positive picture for long-term investors, in this regard.

This earnings report showed net income of US$34 million, while its yearly net income stood at US$183 million, an exceptional feat when compared to the US$78 million yearly net income in Q4 2021. 

Additionally, the company reported Q4 revenue of US$630 million, depicting a year-over-year growth of 5%, and yearly revenue of US$2,468 million, which grew 12% year over year. The company’s diluted earnings per share for the quarter came in at US$0.13, and US$0.68 for the entire year. Additionally, Telus’s cash from operating activities also saw a growth of 17%, reaching US$84 million in comparison to Q4 2021’s US$72 million.

In addition to these stellar numbers, the telecom giant’s cash flow grew by 62% reaching US$60 million, compared to US$37 million in the same quarter of the previous financial year. Some factors responsible for this performance are growth in business activity, lower share-based compensation, and a reduction in working capital net outflows. 

Tie-up with Amazon Web Services

According to recent reports, Telus has joined forces with Amazon Web Services. The company plans to develop smart living solutions which will be based on cloud technology. It will enable consumers to control all associated devices with the help of a single app.

Through this app, the company aims to provide its consumers with a seamless and connected experience at home, which can enhance and simplify their daily lives. 

Telus plans to roll out this service among its Canadian customer base in the next few months. Additionally, the company is also planning a global release after it partners with several other telecommunication firms. 

Telus tops Opensignal’s mobile network experience report

On February 23, 2023, Telus declared its standings in Opensignal’s Canada Mobile Network Experience Report 2023. It received the top spot in six categories — 4G Coverage Experience, Upload Speed Experience, Games Experience, Upload Speed Experience, Core Consistent Quality, Voice App Experience and Excellent Consistent Quality (tied with another contender for the first place). 

Moreover, Telus also received significant honors in Opensignal’s Canada 5G Experience Report. It won the top spot in categories like the Best 5G Video Experience, 5G Voice App Experience and 5G Games Experience. This is the 12th time in a row that Telus has received such industry-beating results on Opensignal’s reports. It is safe to say that it has secured its position as one of Canada’s best telecom companies when it comes to connectivity and 5G experience.   

Bottom line

Exceptional revenue generation, growth, and a tie-up with technology giant Amazon clearly indicate that Telus is a company that is poised for big gains in the time to come. Thus, investors can consider adding this stock to their portfolio in order to secure significant profits. 

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.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Chris MacDonald has positions in The Motley Fool recommends and TELUS. The Motley Fool has a disclosure policy.

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