■ Cut · August 18, 2026
Telus Cuts Dividend by 55%: A New Era for TU Stock
Telus slashed its dividend by 55% in July 2026, marking a strategic shift under new CEO Victor Dodig. The stock trades near $13.25, down from $34 in 2022.
Dividend Cut and Stock Performance
Telus (TSX:T) announced a 55% reduction to its dividend on July 31, 2026, shortly after Victor Dodig assumed the role of CEO. The move was widely anticipated by the market, as the stock's yield had surged above 10% in the months prior. At the time of writing, Telus shares trade near $13.25, a level not seen since 2011. The stock has fallen significantly from its 2022 high of $34.
The dividend cut reduces the payout to a more sustainable level, with the new yield at approximately 5.7%. This adjustment is part of a broader turnaround strategy aimed at stabilizing the company's finances.
Factors Behind the Decline
Telus's share price decline over the past few years can be attributed to several factors. The rapid increase in interest rates by the Bank of Canada and the U.S. Federal Reserve in 2022 and 2023 raised debt servicing costs for the company, which carries substantial debt due to heavy investments in network infrastructure. Although central banks began cutting rates in 2024 and 2025, Telus did not experience the same rebound as other capital-intensive sectors like pipelines and utilities.
Additional pressures included a slowdown in immigration to Canada, which reduced demand for new mobile subscriptions, and aggressive price competition in the wireless market. Telus Digital (formerly Telus International) also faced declining revenue, leading to a $2.1 billion writedown when the company took it private in 2025 and reported Q2 2026 results.
Current Challenges and Opportunities
Despite the dividend cut, several challenges persist. Interest rates remain elevated, and rising bond yields suggest possible rate hikes in the next 12 months due to sticky inflation. Price wars have eased, but the shrinking pool of new entrants to Canada, particularly students, continues to pressure sales of devices and service subscriptions.
On the positive side, Telus is investing in AI data centres to meet growing demand from government and corporate clients seeking data sovereignty. The company's Telus Health and Telus Agriculture & Consumer Goods divisions are expanding and could be monetized to reduce debt.
Most negative news appears priced into the stock at current levels. The new CEO has addressed the dividend cut and the Telus Digital charge early in his tenure, allowing him to focus on executing the turnaround plan.
What it means for income investors
The reduced dividend, now yielding 5.7%, is expected to be sustainable given the company's focus on cash flow and debt reduction. However, the stock remains a contrarian pick, and potential capital appreciation may take time as the company navigates ongoing industry headwinds.
Reporting based on: Yahoo! Finance Canada. Figures verified against market data where available.