Canadian telecommunications giant Telus Corp. (TU) has stopped its annual dividend increases.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
Management at the Vancouver-based wireless provider says that it will not increase its quarterly distribution to stockholders again until the share price reflects the company’s growth prospects. Telus will continue to pay a quarterly dividend of $0.30 a share.
While the dividend is no longer being increased, it currently has a yield of 8.85%, making it one of the heftiest payouts among Canadian stocks. That said, Telus also said that, starting next year, it will begin phasing out its discounted dividend reinvestment plan that enables shareholders to use their dividends to buy Telus stock from the company at a discount to the market price.
The Telus Dividend Discount
Telus will reduce the current discount of 2% to 1.75% for dividends declared in February and May 2026 and 1.5% for dividends declared in August and November 2026. The discount will then be 1% for dividends declared in 2027 and there will be no discount offered starting in 2028.
The changes to Telus’ dividend come as management says it expects the company to generate $2.15 billion in free cash flow this year, and forecast a compound annual growth rate (CAGR) of at least 10% from 2026 through 2028. The preliminary target for free cash flow in 2026 is $2.4 billion.
Is TU Stock a Buy?
Telus stock has a consensus Hold rating among nine Wall Street analysts. That rating is based on four Buy, three Hold, and two Sell recommendations issued in the past three months. The average TU price target of $15.48 implies 15.52% upside from current levels.
