Not all Canadian stocks participated in the impressive rally in the Canadian stock market. Undoubtedly, the TSX Index surged close to 19% last year. And while it was still topped by the S&P 500, which blasted off closer to 24%, I still think the TSX Index has a good chance to finally beat the U.S. indices as value looks to shine after two straight years of momentum driven by America’s biggest and brightest high-tech darlings.
Indeed, the days of the Magnificent Seven may not be over, but I think that some of the more heated names within the basket are long overdue for a breather. Some of the names are already in the process of correcting. And as they do, look for some of the underrated TSX value stocks to make up for lost time and start to gain meaningful traction of their own to kick off this new year.
In this piece, we’ll look at one stock that I guess you could call a 2024 laggard.
Indeed, last year’s duds are not necessarily poised to become the current year’s winners. That is, unless there’s some form of massive catalyst to turn the tides. Indeed, it’s tempting to throw in the towel on this battered name, but if one does, there’s a good chance that one could be selling out at or around the bottom!
Telus
Ailing telecom titan Telus (TSX:T) is in the middle of a really nasty sell-off, with the stock shedding around 18% of its value last year. Now down around 42% from its all-time high hit back in 2022, questions linger as to whether the high-yield heavyweight and former market darling can get back on its feet and start gaining for investors, many of whom are in the name just for the huge dividend.
Indeed, even before the brutal sell-off, T stock has offered very generous yields, typically well north of the 4% mark. Today, the stock yields 8.26%, and it looks far safer than meets the eye. The company probably wouldn’t have hiked its dividend last year if it didn’t think it could balance the payout with investments to further boost the network. Indeed, industry headwinds could stay the top story in 2025. On the industry level, I don’t think there’s a whole lot to look forward to.
That said, some analysts view Telus as a “structural leader” in the telecom scene. And I’d say it’s hard to argue against that, given its impressive network. As the company continues investing in its business, perhaps there’s an opportunity to take market share in a market that could prove rather mild for another year. Whether that’s enough to turn the tides remains to be seen. Either way, I like Telus’s chances over its Big Three telecom peers.
The bottom line on T stock
Just because the more than 8%-yielding dividend is secure, though, doesn’t necessarily mean Telus stock will walk away from 2025 as a winner.
There are challenges the firm needs to get through. With no media segment and an infrastructure growth plan that could draw in subscribers, perhaps Telus is the firm that could surprise us all once its quarterly numbers come due. Expectations are not all too high right now for a firm that’s consistently shown it’s an industry top dog.
