TELUS Corporation: Is the Stock Price a Buy or a Sell?

Ladies and gentlemen, let me tell you something: telus corporation (TSE:T) is a stock that's been making waves, and you need to pay attention! The share price has been on a rollercoaster ride, and it's crucial to understand what's driving these movements. So, buckle up as we dive into the nitty-gritty of TELUS's share price and what it means for your portfolio.

First things first, let's talk about the recent performance. TELUS's share price has taken a 5.27% hit over the past 52 weeks, dropping to CAD 20.50. That's a significant decline, and it's got investors scratching their heads. But here's the thing: the stock's beta of 0.70 means it's less volatile than the market average. So, while the price has dropped, it's not as risky as some other stocks out there.

Now, let's compare telus to its industry peers. The trailing PE ratio of 30.72 is way above the industry average of 11.69. That means TELUS is trading at a premium compared to its competitors. The forward PE ratio of 20.07 and the PEG ratio of 2.35 also suggest that the stock might be overvalued. But here's the kicker: TELUS is paying out a whopping 7.85% dividend yield. That's music to the ears of income-focused investors, but the payout ratio of 157.30% is a red flag. The company is paying out more in dividends than it's earning, and that's a recipe for disaster if earnings don't pick up.



But wait, there's more! TELUS has been making some big moves to strengthen its financial health. The company is exploring the sale of a minority stake in its wireless tower portfolio and is looking into creating a dedicated infrastructure entity. This could supercharge its next-gen wireless networks and bring in some serious cash. Plus, TELUS is launching Canada's leading Sovereign AI Factory, powered by NVIDIA. This is a game-changer for the company and the country, as it will help develop domestic AI technologies and boost productivity.

Now, let's talk about the future. TELUS has set a free cash flow target of 2.15 billion for 2025, and that's a big deal. It shows that the company is focused on growth and is taking proactive measures to strengthen its financial health. But here's the thing: the market might not be fully pricing in these growth prospects. The stock's price volatility has been lower than the market average, and that could mean it's less likely to rapidly reach levels around its industry peers.

So, what does all this mean for you? If you're a shareholder, you might be wondering whether to hold on or sell. The optimistic future growth appears to be factored into the current share price, with shares trading above industry price multiples. But if you believe TELUS should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio could be profitable. Just remember, the market hates uncertainty, and TELUS is facing some challenges, including unsustainable leverage and potential regulatory hurdles.



In conclusion, TELUS Corporation's share price is a mixed bag. The high dividend yield is attractive, but the sustainability of the dividend is a concern. The company's future growth prospects appear to be positive, and its plans to invest in growth opportunities and strengthen its financial health suggest that the stock could be a good long-term investment. But remember, this is a no-brainer: do your own research and make an informed decision. The market is unpredictable, and you need to be ready for anything. So, stay tuned, stay informed, and stay ahead of the game!

Ask Aime: What's driving TELUS's recent stock price volatility?