Is TELUS’s Dividend Still Worth Counting on?

TELUS (TSX:T) has become one of the hardest dividend stocks on the TSX to judge.

The yield looks huge at 10.3% at writing. The business still provides essential telecom services. The stock also trades well below past highs. For income investors, that combination can look tempting. But a big yield can mean two very different things. It can signal opportunity. It can also signal doubt.

So, is TELUS’s dividend still worth counting on? The answer is yes, but not blindly.

T

TELUS remains one of Canada’s largest telecom companies. It provides wireless, internet, TV, security, health, business, and digital services to millions of customers. Those services aren’t optional for most households or companies. People may cut back on restaurants, travel, or new furniture before they cancel their phone plan or internet connection.

That gives TELUS a strong base of recurring revenue. Telecom companies also benefit from long-term demand for data. Canadians keep using more mobile data, streaming more content, connecting more devices, and relying more on cloud-based services. Businesses need secure networks, fibre connections, and digital tools. Those trends support TELUS’s core operations.

The dividend is the main attraction today. TELUS currently pays $0.4184 per share each quarter, or about $1.67 annually. With the stock beaten down, that works out to a yield above 10%. That’s the kind of number that grabs attention fast, especially for retirees and passive-income investors.

So, what happened?

Investors need to separate the dividend from dividend growth. TELUS paused its dividend-growth program late in 2025. That doesn’t mean the dividend was cut. It means investors shouldn’t expect the old pattern of regular increases to continue for now. Management wants the share price and business outlook to better reflect TELUS’s growth prospects before restarting increases.

That was the right move. TELUS carries a heavy debt load, and telecom companies need constant capital spending to maintain and expand networks. The company also faced pressure from higher interest costs, restructuring, and competition. Pushing dividend growth too hard in that environment would only create more stress.

The good news is that free cash flow is improving. In the first quarter of 2026, TELUS generated $583 million in free cash flow, up 19% from the same quarter last year. The company also reaffirmed its target of about $2.45 billion in free cash flow for 2026. That number makes the dividend case feel more real. TELUS doesn’t need a perfect year to support the payout. It needs cash flow to keep moving in the right direction.

Looking ahead

There are also growth pockets future investors should consider. TELUS continues to invest in fibre, 5G, business services, and Canadian artificial intelligence (AI) infrastructure. Its Rimouski Sovereign AI Factory was sold out, and a second facility in Kamloops adds another angle to the digital infrastructure story. These projects won’t fix the balance sheet overnight, but they show TELUS still has growth options beyond traditional phone plans.

The risk is still clear. If free cash flow disappoints, debt stays elevated, or competition squeezes margins, the dividend could come under more pressure. The market is already telling investors it wants proof. A nearly 10% yield is not a casual vote of confidence. It reflects concern.

That doesn’t make TELUS a bad buy. It makes it a stock for patient investors who understand the tradeoff. The dividend looks worth counting on today, but the growth part of the story is paused. Investors buying now should expect income first, recovery second, and dividend growth later.

Bottom line

For a passive-income portfolio, TELUS could still deserve a spot. The yield is attractive, the services are essential, and free cash flow is moving in the right direction. Just don’t buy it assuming the old dividend-growth machine is back, though now even $7,000 can at least help ease any volatility through dividends.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTT$16.37427$1.67$713.09Quarterly$6,989.99

TELUS still pays. Now it needs to prove it can keep repairing the balance sheet while doing it.

The post Is TELUS’s Dividend Still Worth Counting on? appeared first on The Motley Fool Canada.

Should you invest $1,000 in TELUS right now?

Before you buy stock in TELUS, consider this:

The Motley Fool Canada team has identified what they believe are the top 10 TSX stocks for 2026… and TELUS wasn’t one of them. The 10 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 over $16,000!*

Now, it’s worth noting Stock Advisor Canada’s total average return is 91%* – a market-crushing outperformance compared to 87%* for the S&P/TSX Composite Index. Don’t miss out on our top 10 stocks, available when you join our mailing list!

Get the 10 stocks instantly #start_btn6 { background: #0e6d04 none repeat scroll 0 0; color: #fff; font-size: 1.2em; font-family: 'Montserrat', sans-serif; font-weight: 600; height: auto; line-height: 1.2em; margin: 30px 0; max-width: 350px; text-align: center; width: auto; box-shadow: 0 1px 0 rgba(0, 0, 0, 0.5), 0 1px 0 #fff inset, 0 0 2px rgba(0, 0, 0, 0.2); border-radius: 5px; } #start_btn6 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn6 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn6 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of June 15th, 2026

More reading

• How Putting $50,000 Into This High-Yield Dividend Stock Could Generate $5,200 in Annual Passive Income
• The Hidden Canadian Winners of the Data Centre Boom
• BCE or TELUS: Which TSX Dividend Stock Is a Better Buy Now?
• A Canadian Dividend Pick Down 28%: A Forever Hold
• BCE vs. Telus: Which Telecom Belongs in Your TFSA?

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.