Dividend investors, we still have a potentially lucrative opportunity today in Telus (TSX: T). In fact, the stock’s dramatic fall and current +10% dividend yield could be one of the best opportunities in a long time. But how do we know if Telus stock’s dividend is secure? And how do we know what’s in store for this once untouchable telecom stock that was on a roll for many, many years?
Dividend investing sure has gotten more interesting. Let’s take a look at this opportunity here.
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Telus and its balance sheet
One of the primary concerns regarding Telus is its high debt load. The company ended 2025 with more than $27 billion in debt and a debt-to-total capitalization ratio of more than 65%. A heavy debt load that was accumulated as the telecom giant built out its 5G and fibre optic networks.
These were necessary investments that Telus had to make in order to stay relevant and competitive. But today, the company’s next necessary order of business is to strengthen its balance sheet. And this is what Telus’s management has committed to doing. In fact, an accelerated debt repayment plan has been initiated. For example, $7 billion worth of assets are earmarked for divestment. Also, the company is looking to attract strategic investors to its Telus Health business.
As you can see from Telus’s stock price graph below, this has taken a toll. Telus’s share price has fallen 50% from its 2022 highs, and it remains below $17 today.
Telus’s fundamentals show strong potential
The telecom giant has suffered the effects of a highly competitive dynamic in recent quarters. This is the new reality. However, Telus has diversified its business, and this can potentially shield it from this reality in the long run.
For example, Telus’s wireline business delivers more than connectivity. It also offers smart home energy. This is a comprehensive home energy management service that tracks energy usage, automates energy savings routines and provides tips and tricks. Telus Wireline also offers tech-enabled health care and security offerings.
Finally, Telus Digital is seeing a strong boom in artificial intelligence, or AI, revenue. In fact, Telus’s AI data solutions are expected to increase from an $800 million business currently to a $2 billion business by 2028.
Telus shares: 10% dividend yield
So, there’s no question that Telus stock’s dividend yield and its debt load can equally be seen as either a red flag or a green flag. In the long term, patient investors might conclude that Telus will get things in order, as the company has said it would. Others might conclude that this type of “opportunity” is too risky.
I’m focusing on Telus’s potential. Often, an investor’s greatest buys are those that take place when everyone else is selling. Telus’s potential is in its plan to pursue high-growth areas such as Telus Health and its AI business. It’s also in the company’s moderating capital expenditures and its debt reduction plan. And it’s in Telus’s target of driving revenue growth of up to 4% and free cash flow generation to $2.45 billion this year.
It’s all achievable, but of course, there are risks. In the meantime, if you buy Telus today, you will benefit from its more than 10% dividend yield. So, back to the initial question, how many shares of Telus would it take to earn $10,000 a year in dividends? Well, not as many as you would think. Here is the calculation: with an annual dividend of $1.6736, it would take buying 6,000 shares of Telus at today’s price of $16.45 in order to generate approximately $10,000 in annual dividends.
The bottom line
Telus stock will be reporting its first-quarter results in May. Analysts are expecting EPS of $0.22 for the quarter, compared to $0.26 in the same quarter last year. Telus’s stock price trades at a mere 16 times 2027’s expected earnings estimate.
