Telus Corp. is the largest telecommunications carrier in western Canada and one of the largest in the country. It has over 13 million subscriber connections, including 9.2 million wireless subscribers, 1.8 million Internet subscribers, 1.3 million residential access lines and 1.1 million TV customers.
Telus Corp. (TSX—T) continues to increase its subscriber connections. For the 12 months ended Sept. 30, 2018, the communications services stock’s total subscriber connections increased 2.9 per cent to 13.3 million. This increase was driven by a 4.5-per-cent rise in wireless postpaid subscribers, a 6.3-per-cent increase in high-speed internet subscribers and a 4.9-per-cent increase in Telus TV subscribers (excluding Satellite TV subscriber adjustment).
Telus is one of Canada’s largest telecommunications companies. Its 13.3 million subscriber connections include 9.2 million wireless subscribers, 1.8 million high-speed Internet subscribers, 1.3 million residential network access lines and 1.1 million Telus TV customers.
Cash flow drives 2 dividend increases
The company has delivered modest earnings growth. For the nine months ended Sept. 30, 2018, Telus made $1.3 billion (adjusted), or $2.17 a share, compared with $1.2 billion, or $2.11 a share, in the same period of 2017. This increase was driven by a 5.1-per-cent increase in operating earnings to $2.2 billion, reflecting wireless network revenue growth driven by a growing customer base, improved wireless equipment margins and growth in data service revenues including revenues from business acquisitions.
Free cash flow jumped 55 per cent to $1.1 billion. This let Telus increase its dividend twice in 2018, for a total increase of 7.9 per cent, in line with its annual growth target of seven to 10 per cent through 2019.
Buy Telus for growth and income
Telus still has several growth avenues. For example, the wireless industry still has further penetration room in the Canadian market. Then too, subscribers continue to adopt, and upgrade to, data-intensive smartphones as they seek more mobile connectivity to the Internet.
This blue chip stock trades at a reasonable multiple of Telus’s projected 2018 earnings of $2.88 a share. The annual dividend of $2.18 a share offers a decent yield between 4.5 to five per cent. Telus is a stock to buy for growth and income.
This is an edited version of an article that was originally published for subscribers in the December 14, 2018, issue of Money Reporter. You can profit from the award-winning advice subscribers receive regularly in Money Reporter.
Money Reporter, MPL Communications Inc.
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