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A stock trading near its 52-week low with a dividend yield exceeding 11% — is this a value trap signal, or the entry point that long-term income investors have been waiting for? Canadian communications technology giant Telus (TSX:T) currently finds itself at this very crossroads.
As of July 8, Telus shares closed near $14.55, with a market capitalization of approximately $23 billion, down about 37% from its 52-week high, while offering a dividend yield of roughly 11.5%. For value-oriented investors willing to look beyond short-term volatility, this stock warrants a closer examination.
The Business Fundamentals Are Still Operating
Telus’s business spans wireless communications, internet, healthcare, digital experiences, and data services, serving consumers, enterprises, and the public sector. This diversified business structure provides the company with multiple growth pathways, setting it apart from conventional pure-play telecom stocks.
Although the stock’s recent performance has been disappointing, the latest operating data shows that the company’s fundamentals remain solid. In its most recent quarter ended March 2026, Telus added a total of 262,000 mobile and fixed-line customers, including 12,000 mobile phone additions, 229,000 connected devices, and 21,000 internet net additions.
On the financial front, mobile network revenue rose 1% year-over-year in the quarter, consolidated service revenue inched up 1%, and adjusted EBITDA held steady at $1.8 billion. More notably, free cash flow surged 19% year-over-year to $583 million. Meanwhile, Telus’s 5G network now covers more than 90% of Canada’s population, laying the groundwork for growing demand for higher-value data and digital services.
The Balance Sheet Is Improving
Telus shares have declined 19% over the past six months, and the market has clearly turned cautious. However, the company’s financial discipline is strengthening. Management has set clear deleveraging targets: reducing net debt-to-EBITDA to 3.3 times or lower by the end of 2026, and to 3 times or better by the end of 2027. Additionally, potential monetization of Telus Health could provide further support for the deleveraging plan.
Is the High Dividend Sustainable?
For income investors, the sustainability of an 11.5% dividend yield is the central concern. Based on current data, the company has not shown any significant deterioration across the three key dimensions of customer growth, profitability, and cash flow — which provides fundamental support for dividend sustainability. Of course, short-term volatility is unavoidable, but at the current price level, investors are being richly compensated to wait while also having the potential for valuation upside.
For income investors who can tolerate some near-term volatility, Telus near its 52-week low may well be a long-term allocation opportunity worth considering.
