Telus (TSX: T) stock had another rough year of sledding, and with the firm hitting the pause button on further growth with its massive dividend commitment, I’m sure many shareholders are wondering what’s up next for the 9.4%-yielding dividend.
Is a big dividend cut just waiting around the corner? Or are there other levers that Telus’s top bosses can pull to keep the dividend promise to investors while navigating the business back on track amid industry headwinds?
At this juncture, I think the odds favour the survival of the dividend. But don’t get too excited about the near-10% yield just yet. The stock might just lose more ground than the dividend can make up for, making Telus stock a risky play from a total returns perspective. When it comes to high-yielders, I’d encourage prospective investors to pay more attention to the total returns and less to just the sheer size of the yield.
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Telus stock might still be risky, but it looks like more than just another value trap
While Telus remains a riskier dividend play, in my humble opinion, going into 2026, I find the shares severely underpriced at current levels. Even if the dividend isn’t on the safest ground in the world, I think there’s plenty of reason to stick around as the cash flow situation looks to improve.
Of course, just because there is a plan to bolster free cash flows doesn’t mean the coast is clear, and it’s time to start loading up on the stock.
While management is more than capable of getting the job done on schedule, I would put T shares in the “show me” category. Given some of the comeback stories of similar telecom titans, especially those south of the border, I’m inclined to think Telus might have what it takes to follow a similar playbook, one that might accompany big recovery gains in the medium term.
Though the wait-and-see approach seems safest, especially given Telus stock continued to lose ground in 2025 (down close to 10% year to date), it’s worth noting that it’s times like these, when there’s profound uncertainty and more pessimism than hope, when the potential reward stands to be the highest.
As they say, the higher the risk, the higher the potential rewards. And while 2026 is not guaranteed to be an up year for shares of Telus, I do think that the slate of risks might actually be lower today than at the start of 2025.
The dividend growth will be paused, but that’s not a big deal for yield lovers
So, while further dividend growth will be paused, it’s important to note that the fat dividend will still be paid out. And that’s the big draw for investors going into the new year. Telus stock remains one of the yield-heaviest dividend stocks, not only in Canada, but in North America.
And I do think the name will attract more attention, especially if the coming quarters impress. Though the earnings bar going into the coming quarters is modest, I do think that Telus’s past year of efforts will not be for nothing. The company has trimmed away at costs, and there’s still more work to be done.
Though I don’t like pursuing massive yields north of 8%, I do think the odds favour the survival of the dividend, at least over the next two years. In the meantime, it will be interesting to see how the telecom titan moves ahead as it strives to compete and keep its financials healthy in what could be another year of volatility.
Either way, Telus stock is my top high-yield dividend stock pick for 2026. We’ll see how it fares, and I’ll revisit the name throughout the year to see how well my call fares!
