It’s funny how quickly a market favourite can become a stock nobody wants to talk about. Not that long ago, Telus (TSX:T) was a dependable choice for income investors who valued its stability and steadily rising dividends. Today, however, its falling share price has raised questions about its debt, dividend sustainability, and whether the company could return to meaningful growth.
Notably, Telus stock has plunged by nearly 28% over the last year to currently trade at $15.72 per share with a market cap of nearly $25 billion. At this market price, it offers a 10.6% annualized dividend yield, paid quarterly.
While investors’ concerns make sense, we shouldn’t forget that markets often become overly focused on what’s gone wrong while overlooking what’s quietly improving. Telus is still serving millions of customers, generating billions in cash, and building businesses outside its traditional telecom operations. None of that makes Telus stock a big bargain, but the company’s fundamentals tell a more encouraging story than its recent share price does.
Let’s look at the key factors that could shape Telus’s performance over the next three years and what they might mean for investors.
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Stronger cash flow could change the narrative
The good news is that investors don’t have to rely on hope alone. Telus’ latest results offer a few reasons for optimism.
In the first quarter of 2026, the company’s consolidated service revenue rose 1% year-over-year (YoY), while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) reached about $1.8 billion. Its cash generated from operations came in at roughly $1.1 billion, and perhaps most importantly for investors, free cash flow jumped 19% from a year ago to $583 million.
That last figure deserves the most attention
For a company carrying meaningful debt and paying a generous dividend, improving free cash flow matters far more than modest revenue growth. It gives Telus more flexibility to fund its dividend, invest in its business, and gradually strengthen its balance sheet.
At the same time, the company is making debt reduction a priority. It’s targeting a net debt-to-EBITDA ratio of 3.3 times by the end of this year, before bringing it closer to 3 times next year.
If it delivers on those goals while continuing to improve cash generation, investor confidence could slowly begin to recover.
Growth won’t come from telecom alone
Now, the key question is whether Telus can find meaningful growth outside its established wireless and internet operations in the coming years. Its newer businesses could provide that opportunity.
In the latest quarter, Telus Health continued to perform well, with both service revenue and adjusted EBITDA rising 11% YoY. The platform now supports roughly 170 million lives globally, making it one of the company’s fastest-growing businesses.
Meanwhile, Telus Digital delivered 22% YoY revenue growth, showing the company is gradually building additional sources of earnings beyond its traditional telecom operations.
The company’s push into artificial intelligence (AI) infrastructure could also become an important long-term growth driver. Interestingly, Telus recently said its Sovereign AI Factory in Rimouski has already sold out its available capacity, and a second facility is planned in Kamloops.
Where will Telus stock be three years from now?
Honestly, none of these businesses will transform Telus overnight. But together, they provide investors with a clearer picture of where future growth could come from as Canada’s telecom market becomes increasingly competitive.
The market is still focused on Telus’s leverage, slowing telecom growth, and the sustainability of its dividend. The stock’s unusually high yield reflects those concerns, meaning investors will likely need to see several quarters of consistent execution before sentiment improves.
That means steady progress on three fronts will be critical: growing free cash flow, reducing debt, and maintaining disciplined spending. If the company can continue checking those boxes while expanding its health, digital, and AI businesses, Telus stock could gradually regain investor trust and recover sharply over the next three years.
