Is it Too Late to Buy Telus Stock?

Telus Corp. (TSX:T) offers solid value and income, while the broader telecom industry is faced with regulatory change.

| More on:
Technology

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Telus (TSX:T) is a Vancouver-based company that provides a range of telecommunications and information technology products and services in Canada. Today, I want to explore how Telus stock has performed over the past year and in the first half of this decade. Moreover, I want to dig into the state of the telecommunications space in Canada and how Telus looks as a prospect in early 2024. Let’s jump in.

How has Telus stock performed over the past year?

Shares of Telus have climbed 3.6% month over month as of close on Monday, January 15, 2024. However, the telecom stock is still down 12% year over year. Telus stock has managed to produce only a marginal gain since it opened just above the $25 price point in January 2020. The stock closed at $24.63 per share after trading ended on January 15.

Created with Highcharts 11.4.3TELUS PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

On the other hand, shareholders in Telus stock have been able to rely on its dividends. We will dig into its dividend payout and history when we get to its earning coverage later in the piece.

The state of Canadian telecoms in 2024

The Canadian telecom industry passed through a relatively turbulent year in 2023. On the investment side, higher interest rates had a negative impact on telecom stocks like Telus. Higher savings rates meant that investors seeking income had a plethora of solid options over the past year. Fixed-income investment vehicles fell back into favour in this higher-rate environment. Even Guaranteed Investment Certificates (GICs), which had offered paltry rates of return through the 2010s, now offer rates that rival the current dividend yield of Telus and its peers.

Telecoms have also been under fire from regulators. Francois-Phillipe Champagne, the current minister of Innovation, Science and Industry, handed down a mandate in 2023 that required the Canadian Radio-television and Telecommunications Commission (CRTC) to prioritize consumer rights, affordability, competition, and universal access.

With that in mind, the coming year is shaping up to be one of transition for the Canadian telecom industry.

Should investors be encouraged by Telus’s recent earnings?

Telus is expected to release its fourth-quarter (Q4) and full-year fiscal 2023 earnings in the first half of February. Meanwhile, it released its Q3 FY2023 earnings on November 3, 2023. The company reported operating revenues of $4.99 billion — up 7.5% compared to the previous year. Moreover, adjusted net income was reported at $373 million or $0.25 per share — down 20% and 26%, respectively, compared to the third quarter of fiscal 2022.

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. This measure aims to give a clearer picture of a company’s profitability. In Q3 FY 2023, Telus delivered adjusted EBITDA of $1.82 billion. That was up 5.5% in the year-over-year period.

Bottom line

Shares of this top telecom stock currently possess a price-to-earnings ratio of 44. That puts Telus in favourable value territory compared to its industry peers. Moreover, this telecom stock last paid out a quarterly dividend of $0.376 per share. That represents a tasty 6.1% yield. Telus has delivered dividend growth for 20 consecutive years, which makes this stock a Dividend Aristocrat.

Should you invest $1,000 in Canadian Pacific Railway right now?

Before you buy stock in Canadian Pacific Railway, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Canadian Pacific Railway wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Investing

close-up photo of investor Warren Buffett
Dividend Stocks

Billionaires Are Selling Berkshire Stock and Buying This TSX Stock Instead

Warren Buffett is stepping aside, leading to a drop in share price. So what's next for investors?

Read more »

Dividend Stocks

1 Magnificent Canadian Stock Down 30% to Buy and Hold Forever

Analysts are upgrading this Canadian stock that has spent way too long trending downwards.

Read more »

A plant grows from coins.
Dividend Stocks

How I’d Use $7,000 to Create a TFSA Income Stream For Life

Investors can create a reliable income stream by adding these three dividend stocks to your TFSA.

Read more »

a man relaxes with his feet on a pile of books
Energy Stocks

I’d Put $5,000 in This Dividend Giant for Decades of Income

Looking for a stock that can provide decades of income in addition to strong growth and defensive appeal? Consider this…

Read more »

ETF chart stocks
Dividend Stocks

Investing $7,000 in Your TFSA? Consider These 2 Canadian ETFs for Retirement

Turn $7,000 into tax-free wealth! 2 top ETFs for 4%+ dividends and retirement growth to max your TFSA this May!

Read more »

open vault at bank
Stocks for Beginners

Where Will Royal Bank Stock Be in 2 Years?

Royal Bank stock has long been a top stock, but can that last over the next two years?

Read more »

Muscles Drawn On Black board
Dividend Stocks

The Smartest Canadian Stock to Buy With $5,000 Right Now

This smartest Canadian stock can convert your $5,000 investment to about $30,595 in 10 years, more than six times your…

Read more »

happy woman throws cash
Dividend Stocks

How I’d Turn $14,000 in My TFSA into a Money-Making Machine

Investing over time in a diversified Canadian dividend ETF like the VDY is one way to make a money-making machine…

Read more »