Editor’s note: Previous versions of this article had an incorrect name for Telus’s CEO. He is Darren Entwistle.
In today’s low-interest-rate environment, it’s increasingly difficult to find yield. The Bank of Canada’s prime interest rate of 2.25% means that the average bond investment is yielding a minimal amount. This is where the right dividend stocks can be of great help.
Telus (TSX:T) is one of Canada’s major telecom companies. Telus stock is currently yielding a very generous 9.03%, as the company has faced some real challenges in recent years. Is this yield worth the risk? Why is this dividend stock my top pick?
Let’s explore.
What happened?
Telus has had its share of troubles in recent years — most notably, the company’s heavy debt load as well as increased competition in the wireless services market. The result: the company can no longer afford its dividend-growth plan. The interest expense has almost doubled in the last five years, and Telus’s payout ratio has been increasingly stretched. Something had to give.
So, as you know, Telus made the move to halt its dividend-growth program. This hit Telus stock hard, and it’s down almost 19% from its 2025 highs. The good news is that its current dividend was maintained. And Telus stock is providing its shareholders with a very generous yield.
The question that we investors have to ask ourselves is whether this dividend yield is too risky. Well, the company provided a very bullish three-year cash flow target — free cash flow growth at a minimum compound annual growth rate of 10%. This will be driven by Telus Digital’s strong cash flow generation, the Terrion partnership, and some key divestitures.
Also, recent events have further increased my confidence in this dividend stock as a top pick — namely, increased insider buying and Telus’s move toward the monetization of Telus Health.
Telus stock insider buying
It’s usually thought of as a very good sign when insiders buy up their own stock. And rightly so. During the months of November and December 2025, Telus’s senior management, including CEO Darren Entwistle, bought 357,090 shares in the open market. This equates to more than $6.2 million worth of shares. Also, in order to further align the company’s CEO with shareholders, Entwistle has agreed to take his entire salary in the form of Telus shares and plans to continue to do so for the foreseeable future.
In addition to this, the company bought back 2.3 million shares at an average price of $17.39. These purchases are part of Telus’s $500 million worth of common shares that it is entitled to buy back in its share-repurchase program.
Telus Health monetization
As part of Telus’s plan to reduce its debt load, the company has hired advisors, TD Securities and Jeffries to consider different options for monetizing Telus Health. This would provide Telus with funds that would accelerate its deleveraging and provide the company with a healthier balance sheet and increased financial flexibility — all good things that further strengthen my confidence in Telus as my top pick.
Telus has demonstrated the value of Telus Health in recent quarters. In its most recent quarter (Q3/26), Telus Health posted an 18% increase in its revenue and a 24% increase in its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
This growth is surely not going unnoticed. As Telus looks for a partner, it seems highly likely to be successful. Management has suggested a one-year timeline at the latest. This will ultimately go a long way in strengthening Telus’s financial strength and investor sentiment toward the stock.
The bottom line
While Telus is clearly in damage control mode, the fact is that this company has a lot going for it. As discussed in this article, Telus is pursuing different paths with the end goal of reducing leverage while supporting future growth.
In my view, this high-yield dividend stock is a top pick. It’s a very compelling opportunity for investors to capture a generous yield, which will translate into strong immediate income.
