■ Cut · August 2, 2026
Telus (TU) Cuts Dividend 55%, Lowers Guidance; Stock Falls 11%
Telus slashed its dividend by 55% and cut guidance after a Q2 impairment, sending shares down 11%.
Dividend Cut and Guidance Reduction
Telus Corporation (TU) announced a 55% reduction to its dividend and lowered its 2026 EBITDA guidance, sending shares down 11.23% on August 2, 2026. The company also increased its capital expenditure forecast to C$2.6 billion and recorded a C$2.1 billion non-cash impairment at TELUS Digital, resulting in a net loss of $1.8 billion for the second quarter.
Financial Metrics and Balance Sheet
Despite the setback, Telus reported an EBITDA margin of 30.5% and an EBIT margin of 10.6% in recent quarters. However, net margin is only 3–5%, and return on equity is under 7%. The company's debt-to-equity ratio stands at 2.0x, with a leverage ratio of 3.8x and a current ratio of 0.7, indicating tight balance-sheet conditions. Operating cash flow was approximately $1.05 billion against capital expenditures of about $1.08 billion, resulting in negative free cash flow.
Market Reaction and Analyst Views
The stock broke down from a weekly range of $11.21 to $9.56, a 15% drawdown, and lost the $10.50–11.00 support zone. Intraday trading showed heavy volume on down candles, suggesting institutional selling. Analysts at Barclays, CIBC, and Morgan Stanley downgraded the stock and lowered price targets, citing concerns about growth and dividend sustainability. Fair value is estimated in the US$9–10 range, with resistance at $11 and support near $9.
What it means for income investors
The dividend cut reflects a real cash gap and a shift toward deleveraging. Telus's dividend history now shows a reduced payout, and the stock's yield of 5.6% is less compelling given a price-to-free-cash-flow ratio of 25.6x. Income-focused investors may reassess the stock's role in their portfolios.
Reporting based on: timothysykes.com. Figures verified against market data where available.