Recent Buy - Telus


Here I am sitting in Minneapolis airport waiting to board my last flight home. The last few days has been pretty crazy. Luckily I’ve made some great progress toward all the critical issues so my customer returned my Canadian passport, let me out of the windowless room that I have been working in the past 2 days, and allowed me to go home. Kidding aside the trip has been great considering the circumstances.

Yesterday the stock market went down the drain. Most of the stocks listed on Canadian and US markets dropped significantly. For the past number of weeks I have been eying Telus as a potential purchase in the regular trading account. Yesterday’s major drop allowed me to pull the buying trigger.

As my latest recent buy, I purchased 40 shares of Telus. This is first time that we hold a dividend paying company in all three different investment accounts – regular, RRSP account, and TFSA. Moving forward my plan is to add to our Telus positions so we can enroll in synthetic DRIP in all three accounts.

Telus is one of the big three telecommunication providers here in Canada. The company has shown consistent growth over the last number of years and has continued to add new customers during the last few quarters. Although traditionally a cellular provider, Telus has established a strong customer base in both TV and high speed internet businesses. This is very different than the other two competitors, Rogers and Bell. Rogers is primarily focused in the cellular and media businesses. Although Bell shares similar profile as Telus, BCE does not have as wide customer base as Telus. I definitely like that Telus has been able to expand into the non-cellular spaces. Expanding the empire is always a good way to attract more customers and generate more revenues. Telus has paid dividend since 1999 and has increased dividend for the past 10 years. In 2011, the management declared that they will continue increasing dividend twice each year at around 10% annual rate. The management has decided to do so at least until 2016. If the company continues to do well, there’s no doubt in my mind the 10% increase will continue. The declaration by the Telus management showed the confidence they have about the company when it comes to continue generating revenue in the foreseeable future.

I quite like the telecommunication sector because I believe the sector is a money making machine. The sector is stable and will continue to grow. This is why we own Telus, Bell, Rogers, AT&T, Vodafone, and Verizon in our dividend portfolio. A lot of people already have smartphones. For those that still have non-smart phones, they will eventually have to replace their phones. When you buy a smartphone on contract, all the carriers in Canada force you to sign up on a data plan. This is a very smart way to get the customers to pay for more money than necessary. Furthermore, it is extremely rare for someone that owns a smartphone to not have a data plan. The Canadian consumers will continue to pay money for using data on their smartphones. This is easy money for a cellular provider like Telus. Furthermore, as Internet of Things begin to pick up, more and more devices will be tied to the cellular network. This will bring even more revenues to cellular providers like Telus. On TV and high speed internet side of things, Telus has been adding customers and making their services more reliable. A lot of my friends and co-workers prefer Telus over Shaw for TV and internet services simply because Telus has a higher quality of service. Although we’re currently on Shaw for internet service, I’m strongly considering switching to Telus once we move to our new house. Telus is also working on expanding into the Health Care sector. Although the details are somewhat scarce, I believe this will further differentiate Telus from Rogers and Bell.

Like any stocks, there are always risks associated in investing in a company. Investing in Telus is no different. The Canadian government has been talking about adding a 4th nationwide carrier for a number of years. While I believe a 4th nationwide carrier is unavoidable, it’s unclear when such carrier will enter Canada. It requires a lot of capitals to set up all the necessary infrastructures to support a nationwide network. In addition, the new carrier will need spectrums. Right now the big three own most of the cellular spectrums in Canada. I strongly believe that it will take at least another 5 years or more to establish a new nationwide carrier. For the average consumers, unless the new carrier offers incredible deals, it is unlikely for them to switch their cellphone provider. In other words, I believe the risk is limited.

Currently Telus pays $0.38 per share each quarter. This purchase will add $60.8 into our annual dividend income.

What do you think about my decision to purchase Telus? Do you own Telus in your dividend portfolio?

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  • Reply
    My Own Advisor
    September 27, 2014 at 6:11 am

    DRIPping Telus every quarter and don't intend to stop 🙂

    • Reply
      September 27, 2014 at 8:07 pm

      Hoping to be able to DRIP Telus next year. 🙂

  • Reply
    September 27, 2014 at 2:54 pm

    A strong name to own in your portfolio. I have BCE and RCI.B in my portfolio but no T - atleast not yet. I am still debating if I should add it....I know its much more stronger and widespread in western Canada than here. Out here, Telus is just a cell phone service provider. I will have to take another look at the financials - but with the presence of BCE, RCI and AT&T in my portfolio, its starting to get a bit crowded. Still....a great sector to own for the long term, methinks.

    Best wishes

    • Reply
      September 27, 2014 at 8:08 pm

      Hi R2R,

      The way I see it, Telecommunication companies are becoming like utility companies. People need them so they'll be around for a very long time.


  • Reply
    September 27, 2014 at 11:46 pm

    I use Kodoo prepaid for my phone so think of me every time you get a dividend - just say "man that Steve guy is swell for contributing to my payments this quarter." 😀

    • Reply
      September 28, 2014 at 3:02 pm

      Hi Steve,

      I will think of you when I receive dividend from Telus. Thank you for contributing to my income lol. 😉

  • Reply
    September 28, 2014 at 3:21 am

    Very nice buy here and I like the high dividend yields that telecom companies offer. I am hoping to also oen T soon as it's a decent value. It's so true when you said they are becoming utilities. Having a phone is more important than hot water!

    • Reply
      September 28, 2014 at 3:02 pm

      Hi Dividend Mongrel,

      Telecommunication sector is definitely getting as important as hot water. 🙂

  • Reply
    September 28, 2014 at 2:38 pm

    Hi Tawcan,
    Owning Telus in a dividend portfolio makes a lot of sense to me. Good company, good dividend and a growing dividend.

    I have to question the logic of having the same stock in 3 accounts. This must create a lot of problems keeping track of the various ACB’s, calculating your annual returns and costing you money on fees.

    I feel you should decide which stock should be in which account and stick with it. Don’t forget, a dividend is not a “dividend” in an RRSP or TFSA, it is only income without the tax benefits of the dividend tax credit.

    It is my opinion you want long-term dividend growers such as Telus in your regular account where dividends are taxed like dividends, foreign dividend payers in your RRSP along with other investments you want to own and small cap dividends payers with more growth in the TFSA. I understand you may have limited funds at present, but you still should have a long-term plan on where you want your investments to end up.

    I’m sorry if this is a little “preachy” but I feel most DIY investors don’t have a good long-term plan which would include an asset allocation plan and a portfolio management plan.

    Hopefully this will give you something to think about.


    • Reply
      September 28, 2014 at 3:12 pm

      Hi Just,

      You have some very good points and I don't think you came across a preachy. Your points have merits and I definitely have considered all of them. For me, it doesn't create any problems in terms of tracking. I have a straight forward excel sheet set up to track all our investments. Everything is set up so things can be calculated automatically.

      "Don’t forget, a dividend is not a “dividend” in an RRSP or TFSA, it is only income without the tax benefits of the dividend tax credit."

      This statement is not exactly true. In TFSA all of the dividend income received is tax free so you don't need to worry about dividend tax credit. If you keep your RRSP until age of 71 and convert to RRIF then all the dividend income will be taxed as regular income. Yes you don't get the tax benefit. However I don't plan to ever convert our RRSP to RRIF, simply because RRIF is too restricted and forces you to withdraw a certain amount each year. My plan all along is to withdraw RRSP once I'm retired and pay a lower tax rate. For regular account yes you do get the tax benefit of the dividend tax credit that's why I'm slowly building up our regular accounts with dividend paying stocks. Perhaps you should take a look at this post about my dividend approach -


  • Reply
    Dividend Mantra
    September 28, 2014 at 5:43 pm


    Telus looks pretty solid. Nice buy!

    Telecommunication companies definitely aren't going anywhere, though it's probably a low-growth industry with a lot of saturation.

    What are your thoughts on MVNOs here?

    Enjoy those dividends. 🙂

    Best regards!

    • Reply
      September 28, 2014 at 7:49 pm

      Hi Dividend Mantra,

      Yes telecommunication companies are probably not going to have high growth, that's why we need to have a mix of high growth industries in the dividend portfolio. In terms of MVNOs, such thing doesn't really exist in Canada. I know it's a bit more popular in the states. These MVNOs still have agreements with the major carriers and pay some feeds to the carriers for using the spectrums. Either way, the carriers are making money.


  • Reply
    Investing Pursuits
    September 28, 2014 at 7:22 pm

    The communications sector is a great sector in Canada. I do not hold Telus, but own 3 others (BCE, Rogers, Shaw).

    I think Telus is a good stock to hold for the long term and will be dividends and increase them years to come.

    • Reply
      September 28, 2014 at 7:50 pm

      Hi Invest Pursuits,

      I thought about investing in Shaw for this transaction but decided to go with Telus simply because Shaw is not as diversified compared to Telus. One day I'll probably own Shaw though.


  • Reply
    September 29, 2014 at 7:15 am

    The more I learn of Telus, the more I like it. I've never liked telecoms much because of how little they grow and their ... subpar customer service. But Telus seems a little different, and I may research it in detail someday. I think you made a good choice.

    • Reply
      September 29, 2014 at 10:49 am

      Hi Dividend Developer,

      Even with the subpar customer services, people continue to pay their cellphone service providers. This is why I like telecoms so much. 🙂

  • Reply
    September 29, 2014 at 11:13 am

    Solid buy with Telus. Actually, in the Canadian space I started eyeing Telus as well as Rogers. We worked with Rogers in the past at my company and I never really considered them as a dividend investment. I know it is a solid company with good long term prospects but I never pulled the trigger on it. As you know I opted for the Canadian banks with TD, BNS and RY instead. Thanks for sharing your recent purchase.

  • Reply
    September 30, 2014 at 9:33 pm

    Excellent buy with Telus. I was tempted to add to my already sizable position the other day, but held off for now as I am overweight in telecoms.

    I have been a very proud owner of Telus shares since 2010. My only regret is not buying more at the time. I have a DRIP set up on the dividends and intend on holding my position for a very long time. Happy shareholder for sure.

    • Reply
      October 1, 2014 at 11:40 am

      Hi Wiston,

      That's awesome that you started you've been a Telus owner since 2010, looks like you did very well. 🙂

  • Reply
    October 3, 2014 at 9:31 pm

    Congrats on your Telus position. I just got a nice check on Oct 1 for $190 on my 500 shares of Telus. Also hold BCE. I feel very confident that these two dividend payers will be around for a while yet.

    • Reply
      October 4, 2014 at 9:59 am

      Hi NRG,

      Thanks! Wow 500 shares of Telus is HUGE!

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