This Canadian telecom company just launched its 1.5 gigabit TELUS PureFibre, the only 100% fiber-to-the-premise network widely available from a major carrier in Western Canada. The shares have a current dividend yield of 4.87%, paid quarterly.
Telus Corporation (TSX: T.TO, NYSE: TU)
From Internet Wealth Builder
Telus claims to be Canada’s fastest-growing telecommunications company, with $14.7 billion in revenue in 2019 and 15.2 million subscriber connections. The company provides a wide range of communications products and services, including wireless, data, Internet protocol (IP), voice, television, entertainment and video, and is Canada’s largest healthcare IT provider.
Telus split its shares 2 for 1 in March, just before the market swooned. The stock has been struggling to claw back those losses since.
Telus reported first-quarter results that were largely in line with analysts’ estimates and did not indicate any serious fall-out from the recessionary impact of the coronavirus. Operating revenue was $3.9 billion, up 5.4% from $3.5 billion last year. Adjusted net income was $400 million ($0.32 per share) compared to $453 million $0.38 per share) in the same period last year. The company said that high depreciation and amortization costs due to recent acquisitions contributed to the profit drop. An increase in the number of outstanding shares reduced the EPS results.
Telus reported free cash flow of $545 million, up by $392 million over the same period a year ago. This resulted primarily from decreased income tax payments, lower device subsidy leasing amounts, lower restructuring and other costs disbursements, and higher EBITDA.
The company said it had 70,000 net wireless additions during the quarter, of which 21,000 were high-quality mobile phones. There were also 36,000 net wireline additions.
“Our robust and consistent performance over the longer-term, coupled with our strong financial position, positions us well to navigate the uncertainty caused by the global COVID-19 pandemic, as well as for anticipated post-pandemic economic challenges and market opportunities,” said CEO Darren Entwistle.
CFO Doug French said the company is in a sound financial position. “We have a strong balance sheet, further supported by our successful $1.5 billion equity offering in February, with available liquidity of over $3 billion and no debt maturities until 2021. This puts us in an enviable position to navigate this period of uncertainty, and to continue to grow the business and prosper in the post-COVID-19 environment,” he said.
The company withdrew its previous 2020 guidance and said it would issue revised guidance at the time of the second-quarter results, expected at the end of July.
The stock pays a quarterly dividend of $0.29125 ($1.165 a year).
This is another company that appears to be well-positioned to deal with the COVID recession and the dividend is very attractive.
Action now: Buy.
Gordon Pape, Internet Wealth Builder, buildingwealth.ca, 1-888-287-8229, June 1, 2020