When a dividend supply starts to slide, it is easy to think that something must be wrong. And when that dividend stock is a household name, it can be even more difficult to persuade and buy the tractor. But sometimes the best chances of precisely those moments come when a gigantic stumbling and investors give up. That is why Telus (TSX: T) is currently my ultimate contrary investment.
Recent market movements
Telus Stock has had a tough ride. It falls more than 35% compared to the 2022 highlights, making it one of the worst performing large telecom shares in the TSX in recent years. The most important concerns of the market? The growth of subscribers, rising debt costs and a dividend that can endanger any fear if the pressure continues. And in all honesty these are not small problems. But that is precisely why this dividend share stands out. Everyone seems focused on what could go wrong. In the meantime, there is a strong case for what could go well.
Telus Stock recently reported her first quarter of 2025 income, which were not flashy but were far from disastrous. Adapted income before interest, taxes, depreciation and amortization (EBITDA) rose, as well as income. Free cash flow also climbed an incredible 22%, in which the company confirmed its 2025 financial goals.
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The latter point is important. Telus stock is not just a telecom anymore. The company has spent years with building Telus Health, a technically driven platform that now reaches more than 60 million lives in North America. This segment continues to grow double digits, and it gives Telus something that the other telecom does not have: a real growth motor outside of data plans and cell towers. That kind of diversification is perhaps what the company sets up for a long -term rebound.
There is also the dividend. Telus shares pays $ 1.67 per share annually, which gives it a return north of 7.4% at recent prices. That is one of the highest yields on the TSX for a blue chip stock. Critics have warned that the payment can be untenable, given the pressure of the cash flow. But management continues to reconfirm its dividend policy. With capital expenses that are expected to fall after years of heavy network investments, the dividend coverage should improve in the future.
Consideration
Debt is definitely something to check. Telus shares have some debts and interest payments have risen. But it is worth noting that the company staggered its running times to prevent a refinancing cliff. And with long -term assets such as the fiber network and the wireless spectrum, Telus has a strong basis for generating reliable income, even in more difficult circumstances.
The Bottom Line? Telus is still a huge player with millions of loyal subscribers, a growing health company and high recurring income. It is confronted, no doubt. But the market seems to have priced in a worst-case scenario. That is what this makes a contrary chance.
Buying beaten giants is not always glamorous. You make no impression on someone on a dinner by saying that you bought Telus. But over time, investing is more about logic than about popularity. And logic says that a share with a return of 7.5%, stable turnover and a growing technical division should not act at multi -year lows.
Bottom Line
This is not a short -term trade. It is a long-term bet that Telus shares will do for decades what it has done for decades: adjusting, stabilizing and growing. And while others are too busy to worry about yesterday’s problems, Contrarianans have the chance to get to a bargain. For me today, Telus makes one of the best purchases on the TSX.
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