Telus (TSX:T) is one of Canada’s largest telecom companies. Telus shares are currently yielding a very generous 9.03% as the company has faced some real challenges in recent years. Is this return worth the risk? Why is this dividend stock my best choice?
Let’s explore.
What happened?
Telus has had its share of problems in recent years, most notably the company’s heavy debt load and increased competition in the wireless services market. The result: the company can no longer afford its dividend growth plan. Interest costs have almost doubled over the past five years and Telus’ payout ratio has come under increasing pressure. Something had to give.
As you know, Telus has taken the step to discontinue its dividend growth program. This has hit Telus shares hard, down almost 19% from 2025 highs. The good news is that the current dividend has been maintained. And Telus shares offer their shareholders a very generous return.
The question we investors should ask ourselves is whether this dividend yield is not too risky. Well, the company set a very bullish cash flow target for the next three years: free cash flow growth at a minimum compound annual growth rate of 10%. This will be driven by strong cash flow generation from Telus Digital, the Terrion partnership and some key divestitures.
Additionally, recent events have further increased my confidence in this dividend stock as a top pick, namely increased insider purchasing and Telus’ move toward monetizing Telus Health.
Buy Telus shares with insider information
It is usually seen as a very good sign when insiders buy up their own shares. And rightly so. During the months of November and December 2025, Telus senior management, including CEO Doug Entwhistle, purchased 357,090 shares on the open market. This equates to over $6.2 million worth of shares. To further align the company’s CEO with shareholders, Mr. Entwhistle has agreed to take his entire salary in the form of Telus shares, and he plans to continue to do so for the foreseeable future.
In addition, the company repurchased 2.3 million shares at an average price of $17.39. These purchases are part of Telus’s $500 million common stock that Telus may repurchase under its share repurchase program.
Monetizing Telus Health
As part of Telus’ plan to reduce its debt burden, the company has hired advisors, TD Securities and Jeffries, to consider various options for monetizing Telus Health. This would provide Telus with funds that would accelerate its debt reduction and give the company a healthier balance sheet and greater financial flexibility – all good things that further strengthen my confidence in Telus as my top choice.
Telus has demonstrated the value of Telus Health in recent quarters. In the most recent quarter (Q3/26), Telus Health posted an 18% increase in revenue and a 24% increase in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
This growth certainly does not go unnoticed. As Telus looks for a partner, it seems likely that it will be successful. Management has proposed a timeline of at least one year. This will ultimately go a long way in strengthening Telus’ financial strength and investor sentiment towards the stock.
The bottom line
While Telus is clearly in damage control mode, the fact is that this company has a lot going for it. As discussed in this article, Telus is pursuing several paths with the end goal of reducing debt and supporting future growth.
In my opinion, this high-yield dividend stock is a top pick. It is a very attractive opportunity for investors to earn a generous yield, which will translate into strong immediate income.
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