Telu’s exceptional transformation from a traditional telecom utility into a high-margin, technology-driven enterprise with a big runway in AI and digital services is the primary reason to buy this firm.
While the stock trades at a low, due to industry-wide pressures, its core customer acquisition engine remains stronger than ever. And unlike rivals that are tethered to wireless price wars, this company is unlocking premium growth vectors through its health division and its AI data centres.
TELUS CORP. (Toronto symbol T; www.telus.com) is a Canadian wireless carrier with 21.2 million subscribers (including non cellphone devices such as tablets). It also sells landline phone, Internet and TV services in B.C., Alberta and eastern Quebec.
As well, through its Telus Health division, the company helps clinics, pharmacies and hospitals manage electronic patient records and healthcare plans. This business supplies about 10% of its total revenue, and 5% of its earnings.
Telus is now exploring ways to unlock the value of Telus Health. That could include selling a minority stake to other firms or selling shares to the public.
Telus recently opened a new datacentre in Rimouski, Quebec, to run artificial intelligence (AI) software using advanced chips from Nvidia Corp. (Nasdaq symbol NVDA). The company is also building a second AI datacentre in Kamloops, B.C.
Telus has not yet said how much these new facilities will cost. However, they should help it attract more clients, particularly as Canadian businesses become wary of storing their data on foreign platforms. The company has already secured deals with Canadian healthcare software provider League, enterprise software firm OpenText and business consulting firm Accenture.
Telus has also teamed up with Fortanix, a private firm whose software helps businesses securely run AI programs.
Most AI programs need unencrypted data during the training period. However, Fortanix’s Confidential Computing platform keeps sensitive data encrypted when the AI is using it.
This service should give Telus an advantage, particularly as many of its Canadian clients need to ensure that their data remains inside this country. The improved security should also help Telus sign up regulated organizations, such as banks, for its AI services.
Meanwhile, Telus has formed an alliance with Xanadu Quantum Technologies Inc.—now developing quantum computing hardware, which uses electrons, rather than transistors, to carry out a vast number of calculations simultaneously. That makes them much faster than regular computers.
The partners plan to collaborate on advancing sovereign quantum computing infrastructure in Canada, and on exploring the development of a quantum datacentre. The collaboration brings together Xanadu’s work in photonic quantum computing with Telus’ experience in AI, datacentre operations, and its nationwide PureFibre network.
Telus has formed a new alliance with AST SpaceMobile Inc. (Nasdaq symbol ASTS); that’s a provider of satellite-based cellphone and high-speed data services. The deal will let Telus expand service to remote regions in Canada that currently have no cellphone coverage.
The company’s customers will be able to send texts, make calls and use data in Canada’s most remote locations. Under the deal, Telus will invest in ground-based satellite infrastructure. It will also acquire an undisclosed equity stake in AST.
The partnership follows a similar agreement with BCE Inc., which first partnered with AST in 2021 and backs the company through its corporate venture arm. BCE also owns the ground stations that connect satellites directly to its user devices.
[ofie_ad]
Telus’s High yield appears sustainable
The company last raised your quarterly dividend by 0.5% with the January 2026 payment, to $0.4184 a share from $0.4163. The new annual rate of $1.674 yields a very high 10.7%.
Meanwhile, to conserve cash for debt repayments and other uses, Telus will pause its previously announced plan to increase the annual rate by 3% to 8% from 2026 through to the end of 2028.
Based on the current dividend rate, annual dividend payments will likely total $2.6 billion in 2026, or 108% of its projected free cash flow. That ratio should drop to a more sustainable 93% by 2028.
Including the latest increase, the company’s dividend has grown at an average annual rate of 6.1% over the past five years. Telus holds an Above Average TSI Dividend Sustainability Rating.
Recommendation in The Successful Investor: Telus Corp. is a buy for long-term gains.
