This article first appeared on GuruFocus .
A Deep Dive into the Upcoming Payout and Long-Term Sustainability
TELUS Corp ( NYSE:TU ) recently announced a total dividend of $0.13 per share, with the ex-dividend date set for 2026-09-10. This amount includes a $0.13 per share cash dividend payable on 2026-10-01. For value investors, the ex-dividend date is a critical deadline: shareholders must own the stock before this date to qualify for the payment. As investors look forward to this upcoming distribution, the spotlight also shines on the company's dividend history, yield, and growth rates. Using data from GuruFocus, let's look into TELUS Corp's dividend performance and assess its sustainability.
What Does TELUS Corp Do?
-
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
-
How to calculate the intrinsic value of a stock?
-
Is TU fairly valued? Test your thesis with our free DCF calculator.
TELUS Corp is one of Canada's Big Three telecom service providers, offering wireless and broadband services nationally, but with strongholds in British Columbia and Alberta. The firm serves 10 million postpaid and prepaid wireless customers. It counts nearly 3 million broadband customers across a network footprint that passes more than 4 million homes. The firm operates two additional segments, Telus Health and Telus Digital. Telus Health covers 170 million individuals, offering preventive medicine and virtual care in 200 countries. Telus Digital primarily offers third-party customer support, online content moderation, and data transformation.
A Glimpse at TELUS Corp's Dividend History
TELUS Corp has maintained a consistent dividend payment record since 1999. Dividends are currently distributed on a quarterly basis. This long-standing commitment to returning capital to shareholders is a hallmark of the company's investment appeal, particularly for those focused on income generation. The regularity of payments provides a predictable cash flow stream for retirees and institutional investors alike, reinforcing TELUS Corp's reputation as a reliable income stock within the Canadian telecommunications sector.
TELUS Corp has increased its dividend each year since 2002. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 24 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down TELUS Corp's Dividend Yield and Growth
As of today, TELUS Corp currently has a 12-month trailing dividend yield of 12.66% and a 12-month forward dividend yield of 5.67%. This suggests an expectation of decreased dividend payments over the next 12 months. The wide gap between trailing and forward yields often signals that the trailing figure may have been inflated by a special dividend or a temporary price decline, while the forward yield reflects management's guidance for the coming year.
Over the past three years, TELUS Corp's annual dividend growth rate was 6.80%. Extended to a five-year horizon, this rate increased to 6.90% per year. And over the past decade, TELUS Corp's annual dividends per share growth rate stands at 6.90%. This steady mid-single-digit growth is typical of mature telecom operators that balance shareholder returns with network investment needs.
Based on TELUS Corp's dividend yield and five-year growth rate, the 5-year yield on cost of TELUS Corp stock as of today is approximately 17.67%. Yield on cost measures the annual dividend return on the original investment price, illustrating the power of compounding dividend growth over time.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2026-06-30, TELUS Corp's dividend payout ratio is 3.42. And this may suggest that the company's dividend may not be sustainable. A payout ratio above 1.0 indicates the company is paying out more in dividends than it earns, which is a red flag for long-term income investors.
TELUS Corp's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks TELUS Corp's profitability 7 out of 10 as of 2026-06-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability. This consistent profitability provides a buffer, but the elevated payout ratio remains a key concern.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. TELUS Corp's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. However, growth ranks are relative; a closer look at absolute figures reveals challenges that could pressure future dividend increases.
Revenue is the lifeblood of any company, and TELUS Corp's revenue per share , combined with the 3-year revenue growth rate , indicates a strong revenue model. TELUS Corp's revenue has increased by approximately 0.60% per year on average, a rate that underperforms approximately 62.36% of global competitors. This slow top-line growth may limit the company's ability to raise dividends substantially without further straining the payout ratio.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, TELUS Corp's earnings increased by approximately -7.40% per year on average, a rate that underperforms approximately 77.34% of global competitors. Negative earnings growth combined with a high payout ratio is a combination that warrants careful monitoring.
Lastly, the company's 5-year EBITDA growth rate of -6.50%, which underperforms approximately 85.22% of global competitors. EBITDA, or earnings before interest, taxes, depreciation, and amortization, is a proxy for operating cash flow. A declining EBITDA trend suggests that the company's core operations are generating less cash, which could eventually threaten the dividend if the trend persists.
Next Steps for Income Investors
TELUS Corp's upcoming dividend of $0.13 per share, payable on 2026-10-01, continues a long tradition of shareholder returns dating back to 1999. However, the analysis reveals a mixed picture: a trailing yield of 12.66%, a forward yield of 5.67%, and a payout ratio of 3.42 that raises sustainability questions. While the company's profitability rank of 7 out of 10 and positive net income history are reassuring, negative trends in EPS and EBITDA growth, along with sluggish revenue expansion, suggest that dividend growth may slow or face pressure. Value investors should weigh the attractive yield against these fundamental headwinds and monitor upcoming quarterly reports for signs of operational improvement. Will TELUS Corp's digital and health segments provide the growth needed to support its dividend, or will the payout ratio force a strategic rethink?
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener .
