Telus

Hi IF
The short answer is no. Telus will work hard to minimize the dividend cut, but I would be surprised if Telus wasn't forced to trim the dividend a bit to be able to grow revenue within a year. I really hope I am wrong about this. I plan to reduce my holdings in Telus to reduce risk, and I expect many other investors will do the same. The silver lining is that the return is almost 9% so a dividend trim could happen and there is still room for a 4.5% to 5% return. The rough part is that dividend cuts harm investor confidence, and the stock would get oversold. BCE has already been through this.
Regards,
MB

The interesting part here is I knew everything about Telus that the Globe article and analyst mentioned.

The fact that the stock reacted so poorly to this news kind of shows me that a lot of investors don't truly know that they own. Coverage ratios have always been tight with a company like TELUS and my main thesis was that these tight ratios would subside moving forward.

It looks like the company has had to halt dividend growth in response to the price action of the stock. The price movement of the stock was unfortunate because it was having a heck of a year prior to the news, I believe it was up 22%~ including dividends.

I do not believe the dividend is safe. However, I never really thought the dividend was safe. Do I believe it will be cut? No. But does that mean I believe it is safe? No. At this point in time, they need increased free cash flow over the next few years for the dividend to be well covered.

They are projecting a fairly big increase in free cash flow next year and then on years moving forward double digit increases. If this is the case, the dividend should be well covered by 2027, and I do not believe they will cut it in this instance.

The dividend is "on edge", but this was not my thesis for buying. My thesis was primarily a low risk/medium level return on expanding free cash flow. One that was looking like it was coming to fruition up until the article. I still remain bullish that this company can get back to the mid to high $20 range, so I still hold. Any deterioration of the fundamentals however and I would have no problem selling. Premium members would know as soon as I do.