Telecom shares are a stable and reliable source of dividend income for investors. Until something happens out of character, such as what happened to it BCE (TSX: BCE) Stock. A huge dividend cut and many weak quarters later, many investors are understandably on their care for BCE shares.
If you are, forget about it About BCE and Consider Telus (TSX: T) Instead, a dividend share supplies that yields an incredible 7.58% and strong income and cash flows takes place.
Make no mistake, the telecom environment has been difficult for everyone in the industry, including Telus. BCE shares has been halved in the past three years.
Telus shares, on the other hand, have fallen 22% – it is still a lot, but clearly a much better performance. So what has the difference made, you might wonder?
Well, in short, it comes down to the amount of leverage that BCE has kept. In 2024, all telecom providers were instructed to give competitors access to their most important fiber networks for a fee. And this has all had a negative influence. Today we see that this movement has had the intended effect – more competition, more options for consumers and lower prices.
This sent BCE to the breaking point, because the company was saddled with too many debts and interest payments that it could not afford. However, Telus did much better. Let’s take a closer look at Telus.
Telus seems
Telus has done a good job in this challenging environment. In fact, the profit per share of Telus (EPS) in 2024 even increased by 9.5% to $ 1.04, and EPS only fell by 6% in the first six months of 2025. In the most recent quarter of Telus, the proof of the strong future of the company could be fully seen, because the company continued to concentrate on diversifying its income basis, cost -saving and growing areas.
For example, Telus Health saw his income and income before interest, taxes, depreciation and amortization (EBITDA) grew very nicely, 16% and 29% respectively. The EBITDA margin of the company also rose with 180 basic points to 17.5%. In addition, the free cash flow of Telus rose by 11% to $ 535 million. This was powered by higher EBITDA and lower capital expenditures and interest charges.
It is important that Telus also focuses on generating income with assets while it goes to the future. An example of this is the recent sale of the company of an interest of 49.9% in his wireless tower operator, Terrion. According to Telus, the majority of the proceeds from the sale must be used to delepue. In fact, the deal will reduce the net debt of Telus by more than $ 1.25 billion.
What for Telus shares says?
In the coming years, the aim of Telus is to create value by concentrating on the growthities, such as Telus Health, and offering the possibilities for generating income for assets. As a result, management expects to deliver the growth of the EBITDA, stable capital expenditures and expansion of the free cash flow.
More specifically, Telus expects revenue growth of 2-4% and EBITDA growth of 3-5%, with a free cash flow of $ 2.15 billion. The goal of Telus is also to have a net debt / EBITDA ratio of three times in 2027. It is currently 3.7 times.
The Bottom Line
BCE shares are a real nail biter, with weak achievements that hardly hit investors. For valuers who have the appetite, it might still be worth considering. For investors who prefer less stress and a clearer, less risky path to growth, Telus shares can be a better choice.
#dump #BCE #shares #great #dividend #option