Shares of telecom firm Telus (TSX:T) have been really surging higher in recent weeks in what can only be described as a relief bounce! The stock is now up more than 18% from its lows hit back in October. And though the rally has compressed the dividend yield just below the 6% mark (as you know, a rise in share price means a drop of the dividend yield), it’s not hard to imagine many value investors feeling more comfortable about getting (back) into the Telus stock waters now that there are signs of life, at least when it comes to the chart!
Personally, I think the recent run is more than sustainable. Though it would have been nice to catch the October trough and the slightly higher dividend yield, I think investors still stand to get a great deal by jumping in at around $25 and change per share. In the grander scheme of things, you’ll still get a historically swollen dividend yield alongside some pretty impressive long-term fundamentals.
Telus stock: Long-term growth and dividends rolled together!
Further, I view Telus stock as one of the best mixes of growth and upfront yield. Indeed, the lack of a media segment makes me incredibly upbeat about Telus stock over its peers as we head into turbulent waters in 2024. Post-recession, Telus could be a tad quicker than its peers to see new highs again, as it continues to win new subscribers, many of whom are newcomers to the country.
In short, the telecom industry is facing some pretty steep near- to medium-term headwinds as the economy looks to stumble over the coming months and quarters. That said, I believe that longer-term tailwinds could help the stock fare better than expected, even if the economy falls into a downturn in the first half of next year.
The Canadian telecom scene could become more competitive with time, but Telus won’t back down!
Competitive pressures in the Canadian telecom scene could rise, as Quebecor (TSX:QBR.B) looks to make its mark at a national level. It’s not hard to imagine many Canadian wireless users switching over to Freedom Mobile (a discount wireless carrier now in Quebecor’s hands) amid inflation and macro headwinds. Indeed, Freedom Mobile offers ample value. But for those seeking the fastest 5G and 5G+ connections out there, the Big Three (and Telus) still call the shots.
Over the coming years, Quebecor is sure to spend a great deal to catch up with the likes of Telus in provinces outside Quebec. That said, I believe Telus is one of the best equipped to defend its turf. It still has an enviable network, and don’t count on it to shy away from new telecom tech (think Elon Musk’s Starlink satellite connectivity) as it arises.
The Foolish bottom line on Telus stock
Telus stock is a great buy, as it gains momentum. The 5.9% dividend yield seems ripe for picking as the company looks to move on from one of its ugliest selloffs in recent memory! I think the telecom stocks are making a huge comeback. And it’s one income investors won’t want to miss by sitting on the sidelines.
