Why TELUS Corporation (TSE:T) Is A Dividend Rockstar

Kristin Rankin
Updated

TELUS Corporation (TSX:T) has pleased shareholders over the past 10 years, paying out an average dividend of 4.00% annually. The company is currently worth CA$26.63B, and now yields roughly 4.51%. Does TELUS tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. Check out our latest analysis for TELUS

How I analyze a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

  • Is it the top 25% annual dividend yield payer?

  • Does it consistently pay out dividends without missing a payment or significantly cutting payout?

  • Has dividend per share amount increased over the past?

  • Does earnings amply cover its dividend payments?

  • Will the company be able to keep paying dividend based on the future earnings growth?

TSX:T Historical Dividend Yield Apr 20th 18
TSX:T Historical Dividend Yield Apr 20th 18

Does TELUS pass our checks?

TELUS has a trailing twelve-month payout ratio of 80.01%, which means that the dividend is covered by earnings. Going forward, analysts expect T’s payout to remain around the same level at 72.95% of its earnings, which leads to a dividend yield of around 5.00%. Furthermore, EPS should increase to CA$2.63. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. T has increased its DPS from CA$0.9 to CA$2.02 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes T a true dividend rockstar. Compared to its peers, TELUS has a yield of 4.51%, which is on the low-side for Telecom stocks.

Next Steps:

Taking into account the dividend metrics, TELUS ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three essential aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for T’s future growth? Take a look at our free research report of analyst consensus for T’s outlook.

  2. Valuation: What is T worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether T is currently mispriced by the market.

  3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.