When it comes to dividend investing in Canada, Telus (TSX: T) continues to be a stock I find difficult to ignore – although not for the same reasons as before. A year ago, investors could point to its excellent long dividend-growth track record. Today, however, Telus stock is down about 45%, and its quarterly dividend was recently slashed by 55%.
Normally, that combination would have me moving on pretty quickly. But with Telus stock now trading close to its lowest level since 2011 and offering an over 6% dividend yield, I think the opportunity may be getting more attractive rather than less.
In this article, I’ll look at whether Telus stock still deserves a place in a long-term portfolio today.
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A closer look at the recent selloff in Telus stock
At the time of writing, Telus stock traded at $12 per share, giving the company a market cap of around $19 billion. At that price, the stock also offered a juicy 6.3% annualized dividend yield.
The stock has had a rough run in 2026 as it has fallen about 45% over the last year and 34% year-to-date. As a result, it’s now sitting very close to its lowest level in around 14 to 15 years.
Notably, several factors have weighed on Telus investor sentiment of late. For example, competitive pricing pressure has hurt its revenue trends, and slower subscriber demand has added another challenge. On top of that, the company reduced its 2026 guidance and reset the dividend in July, hurting investor confidence.
The latest results show where the pressure is coming from
In the second quarter, the telecom giant posted $4.9 billion in operating revenue and other income, down 3% year-over-year (YoY). Its consolidated service revenue slipped 1% from a year ago as weaker Telus Digital revenue and lower mobile phone average revenue per subscriber weighed on growth.
Still, its ability to consistently generate cash came as a big relief for investors. Last quarter, the company’s cash provided by operating activities climbed 15% YoY to $1.3 billion with the help of working capital changes and lower income taxes paid. Similarly, its free cash flow rose 2% to $545 million as lower tax and lease payments offset higher interest costs and weaker adjusted EBITDA.
Why Telus still looks interesting at this price
With those challenges, Telus’s long-term investing appeal now rests heavily on its efforts to strengthen the balance sheet.
Earlier this year, the company cut its quarterly dividend by 55% to $0.19 per share, bringing the annualized payout down to $0.75. That is clearly painful for income investors, especially those who considered it a reliable source of steadily growing income.
However, Telus expects that reset to save about $2.7 billion in cash through 2028, with those savings directed toward debt reduction.
Meanwhile, the company is also removing its dividend reinvestment plan discount from October 1, which should reduce shareholder dilution.
At the end of the June quarter, Telus had a net debt-to-adjusted EBITDA ratio of 3.5 times. The telecom firm is now targeting about 3 times or lower by the end of 2028. Asset monetizations, tighter capital spending, cost reductions, and lower capital intensity as the PureFibre build approaches completion could all help move it toward that goal.
More importantly, Telus plans to keep investing in areas where it sees stronger long-term returns, including wireless, fibre, and digital and artificial intelligence (AI) infrastructure.
Is Telus stock a buy today?
Clearly, the weaker outlook and dividend reset are meaningful near-term risks. That said, the stock’s much lower price, 6.3% dividend yield, improving focus on cash generation, and clear deleveraging plan still make it more attractive than its recent share-price performance might suggest, especially if you can hold it through the turnaround over the next few years.
