As an income investor searching the Toronto Stock Exchange for long-term passive income opportunities, finding a top tier TSX dividend stock to buy for the long haul remains a priority. A titan of Canadian telecommunications, TELUS (TSX: T) stock captures the market’s attention due to its jaw-dropping dividend yield hovering near 11.7%. While a double-digit yield often raises immediate warning flags for cautious investors, the long-term story unfolding inside TELUS suggests this TSX dividend giant could be a powerful buy-and-hold candidate.
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A strategic reorganization underway at TELUS
A major turning point for TELUS could have arrived on July 1 as newly appointed Chief Executive Officer Victor Dodig officially assumed leadership alongside new Chief Financial Officer Gopi Chande. Dodig has wasted no time initiating a broad structural transformation, unveiling a sweeping executive reorganization on July 22.
The strategic moves are designed to streamline operations and drive sustainable long-term growth. Under this new operating framework taking effect on September 1, 2026, re-hired telecom veteran David Fuller will oversee the consolidated consumer and business telecom operations, while Navin Arora will head the global platform businesses.
This bold executive shakeup directly invokes new questions from potential investors: Can TELUS maintain its massive payout, or is a strategic dividend reset on the horizon?
What if TELUS slashes its outsized dividend?
Even if Dodig, Chande, and the board choose to slash the current payout in half to better align with industry peers, a passive income investment case on TELUS stock remains exceptionally compelling.
A 50% dividend cut would lower the yield to a still lucrative 5.8%, creating a payout fully covered by recurring free cash flow.
Going further with this speculation, resetting its outsized dividend would free up significant capital each year. Those hundreds of millions in saved funds could be redirected toward aggressive debt reduction, share repurchases, or strategic investments like expanding artificial intelligence data centres to strengthen its position in Canada’s Sovereign AI program. Such reinvestments ensure TELUS stays competitive alongside rivals like BCE, which is aggressively building out Canadian AI infrastructure.
Using the Rule of 72, an investor collecting a sustainable 5.8% dividend yield would only require a modest 1.4% average annual capital gain on TELUS stock to double their money in just a decade. To achieve that 1.4% annual capital gain, TELUS simply needs to grow its revenue and free cash flow per share at a steady single-digit annual rate while keeping share dilution in check and valuation multiples static.
Multiples may expand if Dodig’s execution delights the market with strong cash flow and steady revenue growth.
Cash flow expansion and strong growth drivers
TELUS’s foundation for future investment gains is already falling into place. On May 20, 2026, TELUS announced a massive $66 billion investment in Canada through 2030 to bolster connectivity and support national AI leadership. At the same time, the company is growing its free cash flow as heavy network buildouts taper off. Management reaffirmed a consolidated free cash flow target of $2.4 billion for 2026, representing 10% growth as capital expenditures drop by a similar 10% magnitude.
To put this trajectory into perspective, telecom peers show similar top-line resilience. On July 22, Rogers Communications reported 8% revenue growth for the second quarter, bolstered by a 50% surge in media revenue. Meanwhile, TELUS reported 1% consolidated service revenue growth in the first quarter and reaffirmed full-year service revenue growth guidance between 2% and 4%.
Is TELUS a TSX dividend stock to buy for long-term income and growth?
Whether management leaves the TELUS stock dividend untouched or executes a prudent 50% cut to strengthen the balance sheet, current valuation levels offer an attractive margin of safety. Investors securing positions in T stock today at a forward price-to-free cash flow (P/FCF) multiple of 7 times stand to benefit from steady income and solid total returns as the corporate restructuring unfolds.
Patient investors searching for an exceptional TSX dividend stock to buy today and hold for generations should view TELUS as a truly remarkable passive income opportunity to consider today.
If the dividend survives, the future passive income yield is even more magnificent.
