■ Cut · August 13, 2026
Telus Cuts Dividend 55% Amid $2.1B Writedown and Net Loss
Telus slashes its dividend by 55% after a $2.1B writedown and $1.8B quarterly loss; new CEO focuses on debt reduction.
Dividend Cut and Strategic Shift
Telus Corporation (T) announced a 55% reduction in its quarterly dividend, lowering the payout from $0.4184 to $0.1875 per share. The move accompanied the company's second-quarter 2026 results and a broader strategic refocus under new president and CEO Victor Dodig, who took over from Darren Entwistle on July 1, 2026. The company plans to eliminate the dividend reinvestment plan (DRIP) discount effective October 1, 2026, and revised its full-year financial guidance to align with its priorities.
The dividend cut follows a $1.8-billion quarterly net loss, driven by a $2.1-billion non-cash writedown on Telus Digital. Net debt rose to 3.5 times adjusted EBITDA at quarter-end, with management targeting 3.0 times or lower by the end of 2028. The reset and DRIP change are expected to preserve approximately $2.7 billion in cash through 2028 for debt reduction.
Impact on Income Investors
The annualized dividend falls to $0.75 per share from $1.6736, a reduction of about $0.92 per share. With shares recently trading around $13.50, down from about $18 at the start of the year, the new yield is roughly 5.5%. For a holder of 1,000 shares, annual dividend income drops from approximately $1,674 to $750, a decline of over $900.
Telus is one of the most widely held dividend stocks in Canadian TFSAs, RRSPs, and RRIFs, so the cut affects many retirement income streams. The company's dividend history shows a long record of payments, but this reset marks a significant change.
Bay Street reaction was mixed. Analysts at Morgan Stanley, CIBC, and Barclays trimmed price targets, citing dividend durability concerns. RBC Capital Markets downgraded the stock, noting its earlier bullish call had missed the mark and flagging a possible downside scenario as low as $11.
Comparison with BCE
Telus is not alone in cutting its dividend. BCE (BCE) reduced its dividend by about 56% in May 2025, trimming its annualized payout to $1.75 per share from $3.99. The Telus reset comes less than 15 months later, meaning two of Canada's largest telecom dividend payers have slashed payouts within an 18-month period.
In a recent column, Gordon Pape, editor of the Internet Wealth Builder and Income Investor newsletters, advised against buying Telus at this time. He pointed to BCE as a cautionary tale: even after its cut, BCE shares remain roughly 13% below their year high, suggesting a dividend reset alone may not restore value. Pape also noted that Telus dropped any specific mention of spinning off assets such as Telus Health, possibly due to the 2021 Telus International IPO experience, which the company unwound by paying US$539 million to buy back shares.
What it means for income investors
For income-focused investors, the reduced dividend may be more secure given the company's focus on debt reduction, but the lower payout will require adjustments for those relying on Telus for cash flow. The new yield of approximately 5.5% is comparable to BCE's current yield of 5.7% to 5.8%, but investors should consider how much of their total dividend income depends on a single telecom stock.
Reporting based on: Yahoo! Finance Canada. Figures verified against market data where available.