Is it a good company at a reasonable price? This company does have problems with debt and Dividend Payout Ratios. However, people feel that it will pay down its debt and that the dividend is safe. Insiders are buying and that is certainly a positive. It is possible for you to collect a very good dividend while you wait for the company to improve. It is a risk. The stock price could very well be cheap as the dividend yield tests are saying.
I do not own this stock of Telus Corp (TSX-T, NYSE-TU). I started to follow this stock because of a list of stock John Sartz talked about in 2008. At the Toronto Money Shows in 2009 and 2010 Aaron Dunn from Key Stone Financial Publishing Corp talked about having recommended this stock. Aaron Dunn says he likes companies with resilient business models, which are profitable and are growing their earnings. He also like companies with strong management teams, health balance sheets, and compelling valuations. They look at the P/E and the Price/Cash Flow ratios. Telus Corp (TSX-T) was one of three stocks he recommended in 2009.
When I was updating my spreadsheet, I noticed that all the management people I am following bought more shares over the past years. Of the Directors I follow, only the Chairman bought stock over the past year. Purchases were made from around $21.50 to $22.00.
If you had invested in this company in December 2014, for $1,005.36 you would have bought 48 shares at $20.95 per share. In December 2024, after 10 years you would have received $554 in dividends. The stock would be worth $935.52. Your total return would have been $1,489.52. This would be a total return of 4.81% per year with 0.72% from capital loss and 5.53% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $20.95 | $1,005.36 | 48 | 10 | $554.00 | $935.52 | $1,489.52 |
The current dividend yield is high with dividend growth low. The current dividend yield is high (7% and above) at 7.52%. The 5, 10 and historical median dividend yield is moderate (2% to 4% ranges) at 4.89%, 4.52% and 4.27%. the dividend increases a low (below 8% per year) at 6.7% per year over the past 5 years. The last dividend increase was in 2025 and it was for 3.48%. However, that was the second dividend increase in 2025 and total increase was 7%.
The Dividend Payout Ratios (DPR) are much too high. The DPR for 2024 for Earnings per Share (EPS) is far too high at 228% with 5 year coverage at 147%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is far too high at 147% with 5 year coverage at 125%. The DPR for 2024 for Cash Flow per Share (CFPS) is too high at 50% with 5 year coverage much better at 41%. The DPR for 2024 for Free Cash Flow (FCF) is high at 71% with 5 year coverage at 90%. FCF in 2024 range from $1,440M to $2,121M. DPRs are not expected to be much lower over the next few years.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 228.42% | 147.18% |
| AEPS | 147.15% | 124.73% |
| CFPS | 50.02% | 40.60% |
| FCF | 70.61% | 90.04% |
Debt Ratios all need improving. The Long Term Debt/Market Cap Ratio for 2024 is high at 0.87 and currently at 083. A good ratio is 0.50 or lower. The Intangible and Goodwill Ratios are much too high at 1.06 and currently somewhat better currently at 0.92. The Liquidity Ratio for 2024 is too low at 0.68 and 0.86 currently. If you added in Cash Flow after dividends, the ratios are still too low at 0.94 and currently low at 1.17. If you added back in the current portion of the long term debt, the ratio for 2024 is still low at 1.40 and currently better at 1.98. The Debt Ratio for 2024 is low at 1.41 and 1.36 currently. You want this ratio to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2024 are too high at 3.45 and 2.45 and currently at 3.77 and 2.77.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.87 | 0.83 |
| Intang/GW | 1.06 | 0.92 |
| Liquidity | 0.68 | 0.86 |
| Liq. + CF | 0.94 | 1.17 |
| Liq, CF DB | 1.40 | 1.98 |
| Debt Ratio | 1.41 | 1.36 |
| Leverage | 3.45 | 3.77 |
| D/E Ratio | 2.45 | 2.77 |
The Total Return per year is shown below for years of 5 to 34 to the end of 2024. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 6.68% | 0.92% | -4.96% | 5.88% |
| 2014 | 10 | 7.54% | 4.81% | -0.72% | 5.53% |
| 2009 | 15 | 8.11% | 12.79% | 5.67% | 7.12% |
| 2004 | 20 | 12.31% | 9.20% | 3.91% | 5.29% |
| 1999 | 25 | 6.08% | 7.53% | 3.24% | 4.29% |
| 1994 | 30 | 5.55% | 8.75% | 4.01% | 4.74% |
| 1990 | 34 | 10.28% | 9.08% | 4.20% | 4.88% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 22.72, 26.33 and 29.93. The corresponding 10 year ratios are 22.95, 25.95 and 28.21. The corresponding historical ratios are 15.71, 17.37 and 19.64. The current ratio is 33.18 based on a stock price of $22.13 and EPS estimate for 2025 of $0.67. The current ratio is above the high ratio for the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 22.33, 25.69 and 27.98. The corresponding 10 year ratios are 17.33, 19.19 and 21.05. The corresponding historical ratios are 15.05, 16.38 and 17.43. The current ratio is 21.70 based on a stock price of $22.13 and AEPS estimate for 2025 of $1.02. The current ratio is above the high ratio for the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $15.13. The 10-year low, median, and high median Price/Graham Price Ratios are 1.38, 1.58 and 1.68. The current ratio is 1.46 based on a stock price of $22.13. The current ratio is between the low and median ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 2.67. The current ratio of 2.22 is based on a stock price of $22.13, Book Value of $15,220M and Book Value per Share of $9.98. The current ratio is 17% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have a Book Value per Share estimate for 2025 of $9.69. This implies a ratio of 2.28 with a Book Value of $14,772M and a stock price of $22.13. This ratio is 14% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 7.28. The current ratio is 5.75 based on a Cash Flow per Share estimate for 2025 of $3.85, Cash Flow of $5,871M, and a stock price of $22.13. The current ratio is 21% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 4.27%. The current dividend yield is 7.52% based on dividends of $1.6652 and a stock price of $22.13. The current dividends yield is 76% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 4.52%. The current dividend yield is 7.52% based on dividends of $1.6652 and a stock price of $22.13. The current dividends yield is 66% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 2.00. The current ratio is 1.64 based on a stock price of $22.13, Revenue estimate for 2025 of $20,547M and revenue per Share of $13.47. The current ratio is 18% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably reasonable, but could be cheap. The dividend yield tests are saying that the stock price is relative cheap, so maybe it is. The P/S Ratio test does not confirm that, it just says the stock price is reasonable. The rest of the testing ranges from expensive (P/E Ratio and P/AEPS Ratio tests) to reasonable (P/GP Ratio and P/B) to cheap (P/CF).
When I look at analysts’ recommendations, I find Strong Buy (4), Buy (3), Hold (9) and Underperform (1). The consensus is a Buy. The 12 month stock price consensus is $23.11 with a High of $30.00 and low of $20.00. The consensus stock price of $23.11 implies a total return of 11.95% with 4.43% from capital gains and 7.52% from dividends based on a current stock price of $22.13.
Analysts on Stock Chase have mixed views on whether to buy or not but all seem to think that the dividend is safe. Amy Legate-Wolfe on Motley Fool says it is a smart stock down on its luck and so is a buy. Adam Othman on Motley Fool says Telus is high yield, but not trash. The company put out a Press Release about their 2024 annual results. The company put out a Press Release about its second quarter of 2025 results.
Simply Wall Street via Yahoo Finance reviews this company. Simply Wall Street has 3 warnings on this stock of interest payments are not well covered by earnings; dividend of 7.52% is not well covered by earnings or free cash flows; and large one-off items impacting financial results. Because of one-off large items, it is usually best to refer to AEPS rather than EPS.
Telus is one of the Big Three wireless service providers in Canada. It is the incumbent local exchange carrier in the western Canadian provinces of British Columbia and Alberta, where it provides internet, television, and landline phone services. It also has a small wireline presence in eastern Quebec. More than 20% of Telus' sales now come from non-telecom businesses, most notably in the international business services, health, security, and agriculture industries. Its web site is here Telus Corp.
The last stock I wrote about was about was Accord Financial Corp (TSX-ACD, OTC-ACCFF) ... learn more. The next stock I will write about will be Trican Well Service Ltd (TSX-TCW, OTC-TOLWF) ... learn more on Friday, September 19, 2025 around 5 pm. Tomorrow on my other blog I will write about BCE Inc .... learn more on Thursday, September 18, 2025 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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