The pause in dividend growth did not impress investors, as tech stock TSX had increased its annual payout from $0.20 per share in 2005 to $1.56 per share in 2024.
Today, Telus shares are down 46% from their all-time high, giving you a chance to buy the dip. So let’s see if you should own these top dividend stocks in January 2026.
Are Telus shares buy, sell or hold?
TELUS is making key strategic shifts to strengthen its balance sheet and position itself for growth in emerging technology markets.
The Canadian telecommunications giant is targeting aggressive free cash flow expansion over the next three years.
- By 2025, Telus aims to generate $2.15 billion in free cash flow (FCF).
- Given the annual dividend expense of $2.58 billion, the company’s payout ratio will exceed 100% this year.
- However, Telus expects free cash flow to grow 10% annually through 2028, indicating that free cash flow will be approximately $2.4 billion in 2026, $2.64 billion in 2027 and $2.90 billion in 2028.
- Management remains confident in these projections despite maintaining the quarterly dividend at $0.4184 per share.
Telus is systematically reducing its discounted dividend reinvestment plan from the current 2% discount to 1.75% in early 2026 and then to 0% in 2028. This move, combined with strong cash flow generation, supports the company’s goal of deleveraging and achieving a net debt to EBITDA (earnings before interest, taxes, depreciation and amortization) ratio of 3.0 times by the end of 2027. 3.5 times as of September 2025.
Operationally, Telus delivered solid third-quarter results, with a total of 288,000 new mobile and fixed customers, reflecting 5% year-over-year growth to nearly 21 million connections.
The company maintained an industry-leading postpaid mobile churn rate of 0.91%, marking the twelfth consecutive year below 1%. Average wireless revenue per user continues to improve sequentially, declining 2.8% compared to steeper declines in previous quarters, indicating that price revision headwinds are gradually easing.
Telus is improving its artificial intelligence capabilities and expects AI-powered revenue to increase from $800 million in 2025 to $2 billion in 2028, indicating annual growth of over 30%.
The company also launched Canada’s first sovereign AI factory and became NVIDIAs first official North American cloud partner. This positions Telus to capitalize on enterprise and government demand for secure, Canadian-hosted AI computing solutions.
The recently completed privatization of TELUS Digital is expected to generate $150 million to $200 million in annual synergies, of which $150 million will be realized by 2026.
What is the price target of the Telus share?
Management is optimistic about the potential for revenue generation through potential partnerships with Telus Health, a company valued at over $5 billion. Finally, the company estimates that the sale of real estate and copper assets will accelerate its debt reduction efforts, while keeping capital expenditures at around 10% of sales.
As a result of the continued decline, Telus shares offer shareholders a dividend yield of more than 9%. Analysts remain bullish, predicting TSX tech stocks to gain nearly 18% given consensus price targets.
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