Contrarian investors are searching for top TSX stocks that are out of favour but could be attractive to buy right now for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on dividends and long-term total returns.
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Telus
Telus (TSX:T) trades near $17 per share at the time of writing. The stock is at its lowest level in more than a decade.
Canada’s telecom sector has been under pressure for a while. The pain began in 2022 when the Bank of Canada started to aggressively increase interest rates to fight high inflation. Telus and its peers carry a lot of debt on their balance sheets. The sharp jump in interest expenses on variable-rate loans cut into profits and reduced cash available for debt reduction and dividend payments. Rates in the bond market also rose, making it more expensive to borrow additional funds. Telus uses debt to fund its capital programs that include upgrading and expanding the wireline and wireless networks. In a country like Canada, where the population is spread out across a vast geographic area, it is expensive to build out the infrastructure needed to offer world-class internet and mobile services for everyone.
The Bank of Canada lowered interest rates in 2024 and 2025. This sparked a new rally in other rate-sensitive sectors, including pipelines and utilities, but the communications companies didn’t participate in the recovery. Telus had to battle a price war in 2024 that helped consumers get better rates on mobile plans, but put a squeeze on margins for the providers. In addition, Telus took a hit from its Telus Digital (Telus International) subsidiary, which saw its revenues plunge.
In 2025, the price war ended, but a steep drop in newcomers to Canada, particularly students, has impacted growth in new phone and subscription sales. That situation isn’t expected to improve in the near term.
Dividend safety
Despite the headwinds, Telus continued to deliver dividend growth in the past three years and had intended to maintain the track record in 2026, supported by projections for improved free cash flow. Analysts, however, have questioned the ability of the company to sustain the dividend growth. This led to a new downturn in the share price that recently forced management to suspend dividend increases. The move hasn’t put a floor under the share price yet, which means the market might be betting that a dividend cut is going to be needed to preserve cash to pay down debt.
At the time of writing, Telus stock provides a dividend yield of 9.6%.
Opportunity
Telus is working through a program of selling non-core assets to raise capital to reduce debt. This includes the sale of a 49.9% interest in its cell tower network earlier this year for $1.26 billion. Telus is also selling its copper stockpiles that it built up as it switched to fibre lines. In addition, the company is monetizing real estate assets and has taken Telus Digital private.
Looking ahead, Telus could see growth expand at its Telus Health subsidiary. The division delivered 18% growth in Q3 2025 operating revenue compared to the same period last year. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 24%.
Telus is also investing in AI data centre infrastructure as it positions itself as a supplier of secure sovereign data management services for Canadian enterprises.
Should you buy Telus now?
Contrarian investors who believe the dividend is safe might want to start nibbling on Telus stock at this level. Even if the share price doesn’t move higher, you get a very attractive dividend yield. If the company delivers on its debt-reduction plan, there is decent upside potential.
This risk, of course, is that revenue doesn’t come in as expected in the next couple of years. A potential surge in inflation caused by tariffs is also important to consider, as it could force the Bank of Canada to raise interest rates again. In that scenario, the stock would face additional pressure.
I wouldn’t back up the truck, but a small position might be of interest for income investors looking to boost the average dividend yield in their portfolios.
