Shares of telecom titan and ultra-high-yielder Telus (TSX:T) have remained under considerable pressure in the past three years. Though the stock is on the recovery so far this year, up just north of 7% year to date, the name is still down close to 39% from its 2022 all-time high. As painful a ride as it’s been for Telus shareholders, it’s hardly the most damaged telecom stock, with some of its rivals in the so-called Big Three suffering haircuts of more than 50%. Indeed, if the share price gets chopped in half, the dividend yield stands to double.
And that’s exactly what we’ve seen with shares of BCE, which currently yield more than 13%. Indeed, that’s an obscene amount that many analysts across Bay Street will be destined for the chopping block at some point this year.
Telecoms feel the pressure: Why it could be time to buy
Of course, a high double-digit yield isn’t expected to be safe. And for the many passive-income investors who’ve already thrown in the towel, perhaps the announcement of a 50% cut or so may very well win back some investors who will gain a bit more clarity on the dividend situation and the path forward.
The forecast isn’t all too bright for the big Canadian telecoms, with more pressure and a potential recession that could hit in as little as a few quarters, thanks in part to Trump’s tariff threats. While I think the top telecoms are closer to the bottom than the top, value-seeking dip-buyers should be on alert and be ready to keep buying more shares on the way down.
Of the Big Three telecoms, Telus stock has to be my favourite. I believe it has the best-covered and “growthiest” dividend of the Big Three. And after a modest dividend hike late last year, it’s likelier than not that the payout will survive yet another horrific year or two. At the time of this writing, shares of T yield around 7.6%.
Telus stock’s dividend looks impressive (and safe)
That’s nowhere near as colossal as BCE’s, but, at the very least, it has a far lower chance of getting hit with a reduction, even if worst comes to worst and a Canadian recession further weighs down subscriber growth across the board.
Time will tell how many more hurdles and headwinds the big telecoms will deal with in 2025 and 2026. Either way, Telus looks best positioned to ride out another tough couple of quarters en route to recovery.
If you’re looking for a dividend stock to buy and hold for the next six years, I view Telus as a prime candidate that I think will be markedly higher come 2031. As the firm continues to invest heavily in boosting its network while making smart bets to strengthen Canada’s artificial intelligence data centre, let’s just say I wouldn’t bet against Telus stock at these historic lows.
The bottom line
Though the path forward could be clearer, the stock looks like a dividend bargain at just over $21 per share. As to whether it’s a buy in 2025 remains a mystery. If you’ve got six years, though, and a stomach for more steep ups and downs, I view the name as a potential deep-value play that may hold up better in the face of the next tariff-induced downswing.
