Whenever market fears head into overdrive, it can pay dividends to buy something, even if it feels like you’re making a huge mistake that will land you with near-term losses. Indeed, timing the market doesn’t seem like a good idea right now, even if you’re a seasoned trader. After a drop of nearly 8%, we’re already pretty much in the latter innings of a correction, and while we still might not be halfway to a bear market or a more painful drawdown, I’d encourage investors to consider the risks of selling out of the market at a moment of fear, when the risks you’re worried about are already mostly priced in.
Undoubtedly, the geopolitical volatility is becoming too much for many to handle, but as the market drop gets indiscriminate, punishing the stocks of companies that are actually doing well, it might be time to go against the grain. The blue chips stand out as a great place to look as they continue moving forward, even as most other investors start growing increasingly bearish. When things are this bearish, it might be worthwhile to turn bullish.
Let’s look at one Canadian blue chip stock that’s currently going for way too cheap after the latest investor sentiment nosedive:
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Telus
Telus (TSX:T) stock hasn’t yet turned a corner, but the dividend yield seems to be glowing, now at close to 9.4%. It might not take long before shares yield more than 10%. And while I do think the payout can survive the next leg lower, investors shouldn’t expect a bottoming out to happen anytime soon, especially as the market looks to turn away from stocks across the board.
With shares now off around 9% from its 2026 highs, there’s serious concern that Telus might be at risk of falling below the more-than-decade lows of $17 and change per share. For many shareholders, it has felt like there’s no floor in the shares. But before you rush for the exits, investors should consider what could go right.
Management is looking to aggressively deleverage and drive efficiencies while keeping that dividend in one piece. For sure, it’s a juggling act that might prove too hard to sustain over the long haul. But if Telus’s push for cost savings does work out, I think the firm is likelier to move out of its dividend growth “pause” with growth on its mind again.
Cheaper than it looks?
In many ways, Telus is the ultimate efficiency story of 2026. And while there are execution risks, I do think many are underestimating management’s ability to pull off such a generational turnaround, which I believe could finally put a bottom in the stock. When that bottom will be, though, remains anyone’s guess. Perhaps as free cash flows begin to march significantly higher in the second half.
For now, the stock might look a bit expensive (especially for a crashed stock) at 24.8 times trailing price-to-earnings (P/E). But given the potential earnings jolt to come, the name might actually be cheaper than it looks. The forward P/E is hovering close to 18.8 times, which, I think, is a reasonable price of admission for a company that’s getting lean and fast. At the end of the day, there’s more to love about Telus stock at these depths than the dividend yield.
