Telus Stock (TSX:T, NYSE:TU): Dividend Pause, Free Cash Flow Target and 2026 Price Forecasts

Telus stock is back in the spotlight. On December 3, 2025, Telus Corp. (TSX:T, NYSE:TU) stunned many income investors by pausing its dividend growth plan while unveiling an aggressive new three‑year free cash flow (FCF) growth target and balance‑sheet strategy. ^[1]

At the same time, the shares are trading near 52‑week lows on both sides of the border and offering a dividend yield of roughly 9%–9.2%, one of the richest payouts among large Canadian telecoms. ^[2]

This article pulls together the latest news, forecasts and analyses as of December 3, 2025, and explains what they may mean for Telus stock in 2026 and beyond.

1. What Telus Announced on December 3, 2025

On December 3, Telus updated investors on its capital allocation framework, making three big moves: ^[3]

Dividend growth paused
- Telus will keep its quarterly dividend at C$0.4184 per share, the level set with the Q3 2025 increase.
- Management explicitly paused the dividend growth model “until such time” as the share price and dividend yield better reflect Telus’ growth prospects.
New three‑year free cash flow target
- Telus reaffirmed that it expects about C$2.15 billion in FCF in 2025.
- It set a preliminary FCF target of C$2.4 billion for 2026 and guided to at least 10% compounded annual FCF growth from 2026 through 2028. ^[4]
- Capital expenditures are expected to be around C$2.3 billion in 2026, reflecting moderating but still substantial investment in fibre, 5G and digital infrastructure. ^[5]
Step‑down of the Discounted DRIP (Dividend Reinvestment Plan)
Telus is systematically dismantling the capital-raising boost it has long enjoyed through a discounted DRIP: ^[6]
- 2025: Current 2% discount on shares issued through the DRIP.
- 2026: Discount moves to 1.75% (February & May) and 1.5% (August & November).
- 2027: Discount cut to 1%.
- 2028 onward: No discount — the DRIP continues, but at market price.
Deleveraging plan to ~3× net debt/EBITDA
Telus reported a net debt to EBITDA ratio of 3.5× as of September 30, 2025, and now targets: ^[7]
- ~3.3× by the end of 2026
- ~3.0× by the end of 2027
Management expects to get there via:
- The Terrion tower partnership completed with La Caisse (Caisse de dépôt et placement du Québec), which monetizes towers while preserving access. ^[8]
- Future hybrid note offerings and other financing. ^[9]
- Non‑core asset sales and real‑estate monetization. ^[10]
- Strong cash generation from Telus Digital (formerly Telus International) now that Telus has acquired the minority interest. ^[11]

Put simply, Telus is trading a faster dividend growth path for a multi‑year FCF and deleveraging story, while still paying a very high absolute dividend.

2. Telus Stock Today: Price, Yield and 52‑Week Lows

TSX: T near the bottom of its range

On the Toronto Stock Exchange, Telus closed around C$18.7 on December 3, 2025, based on end‑of‑day data showing a closing price of C$18.72. ^[12]

Recent trading has been rough:

MarketBeat reports a new 52‑week low of C$18.04 on December 1. ^[13]
Earlier in November, shares also set fresh lows around C$18.4–C$19.1. ^[14]

At the current quarterly dividend of C$0.4184 (annualized C$1.6736), the forward dividend yield on the TSX is in the high 8% to roughly 9% range, depending on the exact share price you use. Barchart, quoting Canadian Press, pegged the yield at “nearly 9.2%” based on Tuesday’s closing price. ^[15]

NYSE: TU also scraping 52‑week lows

In New York, the U.S. listing TU was recently trading around US$13.4 on December 3.

MarketBeat notes: ^[16]

A 52‑week low near US$12.8–12.9.
A dividend yield just above 9% at current prices.

In other words, both listings are pricing in considerable risk, even as Telus continues to pay (but no longer raise) a very large dividend.

3. Why Management Hit Pause on Dividend Growth

This dividend decision doesn’t come out of nowhere. For years, Telus has marketed a multi‑year dividend growth program, most recently promising 3%–8% annual dividend increases from 2026 through 2028, with a long‑term payout ratio target of 60%–75% of free cash flow. ^[17]

However, several developments have turned up the heat on that strategy:

External warnings on payout ratios

Independent research firm Veritas calculates that Telus’ dividend outlay was about 140% of its adjusted free cash flow in 2024, potentially rising to 148% in 2025, before easing closer to 103% by 2027 in an optimistic scenario. ^[18]
Veritas argues that Telus’ own payout‑ratio metric excludes some cash outflows (like certain lease payments), making the dividend look safer than it may be on a strict cash basis. ^[19]

JPMorgan downgrade: “Dividend growth appears unsustainable”

On November 18, 2025, J.P. Morgan cut Telus from Neutral to Underweight and slashed its 12‑month price target from C$22 to C$19, explicitly citing concerns that Telus’ dividend growth path “appears unsustainable” given leverage and payout trends. ^[20]

The downgrade helped push the shares to new lows on heavy volume, with TechStock² and MarketBeat flagging the session as a key inflection point for sentiment. TechStock²+1

Management’s response

Seen in that context, today’s move looks like a direct response to market pressure:

Telus keeps the headline dividend intact, avoiding a cut that could damage its reputation with income investors.
It halts future increases and phases out the discounted DRIP, both of which should slow the growth in cash outflows to shareholders and reduce shareholder dilution. ^[21]
At the same time, management is promising much stronger FCF and lower leverage, effectively asking the market to re‑rate the stock on an improving cash‑flow and balance‑sheet story rather than on dividend growth alone. ^[22]

4. Q3 2025: The Operating Story Behind the Numbers

Telus’ third‑quarter 2025 results are the operational backdrop for today’s guidance. In its November 7 release, the company highlighted: ^[23]

288,000 total mobile and fixed customer additions, including:
- 82,000 mobile phone additions
- 40,000 internet additions
- 169,000 connected‑device net additions
Service revenue up 2%, offset by weaker mobile equipment sales, leaving total operating revenue roughly flat at C$5.1 billion.
Net income and basic EPS up 68% year‑over‑year, helped by cost discipline and scaling of newer businesses.
Free cash flow of C$611 million, an 8% increase versus the prior year, supporting the Q3 dividend bump to C$0.4184.

Segment‑wise, management called out: ^[24]

Telus Health – operating revenue up 18%, adjusted EBITDA up 24%, now touching over 160 million livesglobally.
Telus Digital – higher external revenues plus expected C$150 million in annual cash synergies after Telus acquires the remaining minority stake.
Continued fibre roll‑out and bundled offerings driving internet revenue growth and low churn, with postpaid mobile phone churn at just 0.91% in Q3.

These results help explain why Telus is confident enough to promise FCF growth and deleveraging, even as it tightens the dividend policy.

5. Growth Bets: AI, Cybersecurity, Fibre and Telus Digital

Despite the dividend pause, Telus is leaning hard into growth themes that go well beyond traditional wireless and internet access.

Sovereign AI Factory and data‑centre push

In 2025, Telus announced that its Sovereign AI Factory was recognized on the TOP500 list as Canada’s fastest and most powerful supercomputer and the 78th fastest globally, hosted in a highly efficient, mostly renewable‑powered data centre in Rimouski, Quebec. TechStock²+1

The pitch to investors:

Canadian‑owned AI infrastructure — addressing data‑sovereignty concerns for governments and enterprises.
Potential to sell high‑margin AI, cloud and high‑performance computing services on top of Telus’ connectivity footprint. TechStock²

Quantum‑safe cybersecurity

Telus has also launched a cybersecurity service targeting quantum‑computing threats, essentially a quantum‑safe VPN for enterprises worried about next‑generation cryptographic risks. ^[25]

This complements Telus’ broader managed‑security offerings and fits the narrative of the company as a digital infrastructure and security platform, not just a carrier.

TELUS TV+ and streaming aggregation

Through TELUS TV+, the company is positioning itself as a “super‑aggregator” of streaming services:

The platform has expanded to Samsung and LG smart TVs and Amazon Fire TV, as part of a bring‑your‑own‑device strategy. TechStock²+1
Telus already serves over 1.3 million households with linear TV and streaming bundles, including its Stream+ offering that packages Netflix, Prime Video, Disney+ and numerous free ad‑supported channels. TechStock²

The goal: defend against cord‑cutting and build sticky, multi‑service customer relationships with recurring subscription revenue.

Telus Digital acquisition and AI/SaaS upside

In September and October 2025, Telus moved to buy out the remaining minority interest in Telus Digital (TIXT) for US$4.50 per share, valuing the deal at roughly US$539 million and representing a 52% premium to its unaffected trading level. ^[26]

According to the transaction materials and Telus’ Q3 commentary, the deal is expected to: ^[27]

Fully integrate Telus Digital’s AI and digital‑CX capabilities into the Telus ecosystem.
Deliver about C$150 million in annual cash synergies through cost efficiencies and operational alignment.
Expand Telus’ reach in AI‑enabled SaaS, BPO, and digital transformation services for global clients.

Taken together, these initiatives underpin Telus’ claim that it can grow free cash flow at a double‑digit rate while gradually reducing capital intensity.

6. Analyst Ratings and Price Targets: Mixed but Cautiously Constructive

TSX: T – “Moderate Buy” and ~C$22–23 average targets

On the Canadian listing, Telus still carries a broadly positive analyst consensus:

13 equity research analysts currently cover the stock.
MarketBeat reports an average 12‑month price target of C$22.77, with a high of C$26 and a low of C$19, versus a current price around C$18.7. That implies roughly 22% upside. ^[28]
The rating mix: 1 Strong Buy, 7 Buy, 4 Hold, 1 Sell, amounting to a consensus “Moderate Buy.” ^[29]

Recent moves include: ^[30]

National Bank upgrading Telus to Outperform with a target around C$21.
BMO trimming its target from C$24 to C$23 but maintaining a Buy.
Scotiabank, RBC, CIBC, Canaccord and others with targets in the C$21–C$26 range, skewed toward buy/outperform.
J.P. Morgan standing out with an Underweight and C$19 target.

NYSE: TU – “Hold” with ~35% implied upside

On the U.S. listing:

MarketBeat’s TU forecast page shows an average target of US$18.17, with a low of US$14 and a high of US$21.50, implying about 36% upside vs a price near US$13.4. ^[31]
The overall consensus rating is “Hold”, with Public.com and StockAnalysis both highlighting a mix of hold and sell recommendations. ^[32]

In short, Canadian‑side analysts lean more optimistic (“Moderate Buy”), while U.S. coverage is more cautious (“Hold”), but both see meaningful upside if Telus delivers on its free‑cash‑flow plan.

7. How Valuation Models See Telus

Different fundamental models disagree sharply on what Telus is really worth.

Simply Wall St: deep DCF upside, but P/E looks rich

A detailed Simply Wall St analysis in late October found: ^[33]

A DCF‑based intrinsic value estimate of about C$45.8 per share, implying the stock was roughly 54% undervalued when it traded around C$21.1.
However, Telus’ P/E ratio around 33.5× was much higher than the Canadian telecom industry average (~16.7×) and above a “fair” multiple of ~18× derived from its growth and risk profile.
On that P/E basis, Simply Wall St labelled the stock overvalued, even while the DCF suggested deep value.

The takeaway: valuation is highly sensitive to assumptions about long‑term FCF growth, especially around AI, digital services and health.

MarketBeat & Street metrics: moderate growth, heavy leverage

MarketBeat’s data snapshot around Telus’ recent 52‑week lows highlights: TechStock²+1

P/E ratios in the mid‑20s (on some measures) for a relatively slow‑growing telecom.
Debt‑to‑equity near 180%+, with current and quick ratios below 1, underscoring balance‑sheet risk if conditions worsen.

That combination – high yield, moderate growth, high leverage – explains why some analysts are excited about the upside while others warn about potential downside if growth disappoints or rates stay elevated.

8. Institutional Moves: 1832 Asset Management Trims Its Stake

On December 3, MarketBeat reported that 1832 Asset Management L.P. (a major Canadian institutional investor) sold about 592,079 Telus shares in Q2, trimming its position by roughly 1.5%. ^[34]

Even after the sale:

1832 still holds around 40.1 million shares.
Telus remains its 24th‑largest holding, representing about 0.5% of the firm’s portfolio and about 2.6% of Telus’ outstanding shares. ^[35]

Several smaller institutional investors have reportedly added to their positions over recent quarters, suggesting mixed but active institutional sentiment rather than a wholesale exodus. ^[36]

9. Telus Stock: Bull vs. Bear Case After the Dividend Pause

Bull case: High income, improving FCF, and digital growth

Supporters of Telus stock point to: ^[37]

Very high dividend yield (~9%) from a large, regulated telecom with a long history of paying and growing dividends.
Strong subscriber growth and low churn, especially in bundled mobile + fibre offerings.
A clear path to FCF growth of 10%+ annually and a net‑debt/EBITDA target of ~3×, which could support a future resumption of dividend growth or share buybacks.
Exposure to higher‑growth adjacencies: Telus Health, Telus Digital (AI/SaaS), the Sovereign AI Factory, and cybersecurity.
Analyst consensus on the TSX side that still calls for double‑digit price upside over the next 12 months.

For long‑term investors comfortable with volatility, Telus can be framed as a high‑yield, FCF‑improvement story.

Bear case: Leverage, payout risk and execution challenges

Skeptics focus on several risks: ^[38]

High leverage and thin liquidity – debt‑to‑equity near 180% and sub‑1.0 current/quick ratios leave little margin for error.
Payout ratios above 100% of more conservative FCF definitions, meaning the dividend is heavily dependent on hitting ambitious growth and monetization targets.
Slower revenue growth and modest net margins (~5–6%) compared with the premium valuation multiples.
Execution risk around:
- Integrating and monetizing Telus Digital
- Scaling AI and data‑centre services against global hyperscale competitors
- Delivering synergies and FCF targets while still investing in fibre and 5G
Regulatory and competitive pressure in Canadian telecom, where pricing moves and network‑quality battles can compress margins.

From this angle, today’s dividend pause is a warning sign, not just balance‑sheet prudence.

10. Key Things to Watch for Telus in 2026

For investors tracking Telus stock over the next 12–24 months, several milestones will likely drive the share price:

Free cash flow vs. targets
- Does Telus deliver C$2.4 billion in FCF in 2026 and stay on track for a 10%+ CAGR through 2028? ^[39]
Leverage trajectory
- Does net debt/EBITDA actually fall toward 3.3× in 2026 and 3.0× in 2027, or stall at a higher level? ^[40]
Dividend posture
- Does the board maintain the C$0.4184 quarterly dividend, resume growth, or – in a more negative scenario – reconsider the payout if FCF under‑delivers?
Telus Health and Digital performance
- Are revenue and EBITDA growth in health and digital strong enough to justify Telus’ premium EV/EBITDA and P/E multiples? ^[41]
AI and data‑centre monetization
- Do the Sovereign AI Factory and related initiatives translate into material external revenue and margins, or remain largely strategic positioning? TechStock²+1
Macro and rates
- Higher-for‑longer interest rates would keep debt service costs elevated, impacting FCF and equity valuations across capital‑intensive sectors like telecom.

Final Thoughts (Not Investment Advice)

As of December 3, 2025, Telus stock is a classic high‑yield, high‑debate name:

A near‑9% dividend that management insists on maintaining.
A formal pause on dividend growth to ease legitimate concerns about leverage and payout ratios.
Ambitious FCF and deleveraging targets built on network investments, digital platforms and AI‑related services.
Analyst and institutional views that are split, but still tilt toward upside if execution goes well.

Whether Telus is a bargain or a value trap depends on how much confidence you place in its free‑cash‑flow ramp, deleveraging plan and digital growth strategy.

This article is for information and education only and does not constitute financial advice or a recommendation to buy or sell any security. Anyone considering Telus stock should evaluate their own objectives, risk tolerance and time horizon, and, if necessary, consult a qualified financial advisor.

References

Telus Stock (TSX:T, NYSE:TU): Dividend Pause, Free Cash Flow Target and 2026 Price Forecasts – December 3, 2025