Telus (TSX:T) took a beating in recent years, but is catching a bit of a tailwind in 2026. Investors with a contrarian investing style are wondering if Telus is oversold and good to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on dividend stocks.
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Telus share price
Telus (TSX:T) trades near $19.25 at the time of writing. The stock is up more than 6% so far in 2026, but is way off the $30 mark it topped four years ago.
Telus carries a lot of debt on its balance sheet. This is common for communications businesses that need to invest significant capital to build and upgrade extensive wireline and wireless network infrastructure, particularly in a country like Canada with a relatively small population spread out across a vast geographic area. The sharp rise in interest rates that occurred in 2022 and 2023 caused the initial slide in telecom stocks. Higher debt expenses reduce profits and can cut into cash that is available for debt reduction or dividend payments.
Rate cuts in 2024 and 2025 provided relief for many rate-sensitive companies, but Telus faced other challenges that kept the stock under pressure. A price war in the Canadian communications sector impacted revenue and profits. At the same time, Canada’s decision to reduce immigration numbers, particularly international students, has impacted a source of new mobile and internet subscribers. Finally, Telus Digital (Telus International) plunged on lower revenues. This had a negative impact on overall results.
Risks
Interest rates are lower than they were two years ago, but remain elevated and might not drop again in Canada for some time, unless there is a material weakening of the economy and a surge in unemployment. An economic downturn, however, would likely impact sales of new phones.
On the immigration front, the number of newcomers allowed into Canada will likely remain restricted until the government sees progress on its goal of making sufficient affordable housing available across the country.
Telus put its dividend-growth program on hold late last year in an effort to stem the slide in the share price. A material decline in revenue or a sharp jump in interest rates could force the board to trim the generous distribution.
Upside
The worst of the price wars appears to be over as carriers are once again focused on improving margins. In addition, Telus took Telus Digital private in 2025, a move that is expected to deliver significant synergies in the next few years. Investments in data centres and the use of AI to make operations more efficient should help support growth and reduce expenses.
Time to buy?
Investors will need to be patient, but most of the bad news is likely already reflected in the share price. At the current price, the dividend provides a yield of 8.7%. If you are of the opinion the dividend is safe, Telus deserves to be on the radar right now of your income portfolio.
