Is now the right time to invest in Telus stock? The answer appears to be a cautious yes, given the current trading conditions and the company’s strategic focus on high-growth areas. Telus shares are currently trading at 16 times projected earnings for 2027 and yield over 10%, making them an attractive option for income-seeking investors.
To put this into perspective, an investment in 6,000 shares, costing approximately $98,700, would generate an annual dividend income of around $10,000. This high yield is particularly appealing in a market where many investors are searching for reliable income streams amid economic uncertainty.
However, the backdrop of Telus’s financial situation complicates this picture. The company ended 2025 with over $27 billion in debt and a debt-to-total capitalization ratio exceeding 65%. This level of leverage raises concerns about the sustainability of its dividend policy, which currently stands at 60-75% of free cash flow. In April 2026, fears of a dividend cut caused Telus’s stock to dip more than 9%, highlighting the sensitivity of the stock to changes in its dividend strategy.
Moreover, Telus’s share price has plummeted 50% from its 2022 highs, remaining below $17. This decline has led some analysts to suggest that a bold move, such as a dividend cut, could ultimately lead to a stock price recovery of 20-25% in the first year, similar to what was observed with BCE. This potential for recovery, combined with the current low stock price, has led some experts to assert that now is a good time to buy Telus stock.
Looking ahead, Telus is strategically positioning itself in high-growth sectors, particularly in AI and health solutions. The company’s AI data solutions are projected to expand from an $800 million business to a $2 billion business by 2028. This pivot towards innovation could provide a significant boost to revenue growth, which is currently guided at 2-4% for 2026.
Despite these promising developments, uncertainties remain. The exact impact of potential dividend cuts on the stock price is unclear, and the future performance of Telus’s AI data solutions and overall revenue growth is uncertain. Details remain unconfirmed, making it essential for investors to weigh the risks carefully.
In summary, while Telus stock presents an intriguing investment opportunity with its high dividend yield and growth potential in AI, the company’s significant debt and the looming question of dividend sustainability create a complex landscape for potential investors. As the situation evolves, keeping a close eye on Telus’s financial strategies and market performance will be crucial for making informed investment decisions.
