TELUS Corporation (TSE:T): Ex-Dividend Is In 3 Days, Should You Buy?
Important news for shareholders and potential investors in TELUS Corporation (TSX:T): The dividend payment of CA$0.53 per share will be distributed into shareholder on 03 July 2018, and the stock will begin trading ex-dividend at an earlier date, 07 June 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine TELUS’s latest financial data to analyse its dividend characteristics. See our latest analysis for TELUS
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Does it pay an annual yield higher than 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has dividend per share amount increased over the past?
Is it able to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does TELUS fit our criteria?
The company currently pays out 81.39% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 77.99%, leading to a dividend yield of around 4.92%. Furthermore, EPS should increase to CA$2.7. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of T it has increased its DPS from CA$0.9 to CA$2.1 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes T a true dividend rockstar. Compared to its peers, TELUS produces a yield of 4.61%, which is on the low-side for Telecom stocks.
Next Steps:
Keeping in mind the dividend characteristics above, TELUS is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three relevant factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for T’s future growth? Take a look at our free research report of analyst consensus for T’s outlook.
Valuation: What is T worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether T is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
