■ Cut · August 2, 2026
Telus (TU) Cuts Dividend 55%, Lowers 2026 Outlook; Stock Slides
Telus Corp. slashed its dividend by 55% and cut its 2026 guidance, sending shares down over 11%. The company cited a large impairment and higher capex.
Dividend Cut and Guidance Reduction
Telus Corporation (NYSE: TU) announced a 55% reduction to its dividend and lowered its full-year 2026 outlook, leading to an 11.23% decline in its stock price on August 1, 2026. The company's Q2 2026 results included a non-cash $2.1 billion impairment at TELUS Digital, resulting in a net loss of $1.8 billion and weaker adjusted earnings.
Management revised its 2026 service revenue guidance from growth to flat-to-down, and also trimmed its revenue, EBITDA, and free cash flow forecasts. At the same time, Telus raised its 2026 capital expenditure plan to approximately C$2.6 billion, including investments in AI data centers, which will pressure free cash flow unless monetizations and cost controls are successful.
Financial Metrics and Balance Sheet
Telus reported revenue of C$20.35 billion with a gross margin of 62% and EBITDA margin above 30%, but net margin is barely above 3%. The company's balance sheet shows high leverage: total debt is twice equity, with a leverage ratio of 3.8. Interest coverage stands at 5.4, and the current ratio is 0.7, indicating liquidity pressure.
Return on equity is near 6%, and return on invested capital is below 5%, suggesting limited value creation relative to the cost of capital. The historical price-to-earnings ratio is around 25.1, and price-to-sales is 1.16, which are not particularly low given the reduced growth outlook.
Stock Performance and Technical Outlook
Telus shares have broken down sharply, falling from a high of $11.30 to $9.56, with the worst damage occurring after the Q2 reset and guidance cuts. The stock is now trading below $10, with resistance at $11.20–$11.30. A key support level is $9.50; sustained trading below that on rising volume could signal further downside.
Analysts see fair value skewing lower, with potential downside toward $8.50–$9.00. The company's dividend history shows a consistent payout record, but the recent cut marks a significant shift in its income profile.
What it means for income investors
The dividend cut and reduced outlook reflect structural challenges in the Canadian telecom market and increased execution risk. Income investors should note that Telus's dividend yield will be lower going forward, and the company's ability to sustain future payouts will depend on successful cost management and deleveraging.
Reporting based on: StocksToTrade. Figures verified against market data where available.