TELUS $61.56 (Toronto symbol T.A; Shares outstanding: 324.9 million; Market cap: $20.0 billion; TSINetwork Rating: Above Average; Dividend yield: 4.0%; www.telus.com) gets 52% of its earnings from its growing wireless business, which now has 7.4 million subscribers across Canada.
The remaining 48% of Telus’s earnings come from its wireline division, which has 3.5 million traditional phone customers in B.C., Alberta and eastern Quebec. This business also has 1.3 million Internet users and 553,000 TV customers.
In the three months ended March 31, 2012, Telus’s earnings per share rose 6.0%, to $1.06 from $1.00 a year earlier. Rising demand for wireless and high-speed Internet services helped push up revenue by 4.0%, to $2.6 billion from $2.5 billion.
More consumers are upgrading from standard cellphones to smartphones and tablet computers. To take advantage of that trend, Telus plans to spend $1.9 billion on capital upgrades in 2011. That’s equal to what it spent on capital upgrades in all of 2011.
The stock is up 14% since the start of this year. Even so, it trades at just 16.2 times Telus’s forecast 2012 earnings of $3.79 a share. The company has raised its quarterly dividend by 5.2%, to $0.61 a share from $0.58. The new annual rate of $2.44 yields 4.0%.
Telus is still a buy.
