A top Canadian investing expert says think twice before buying Telus after its 55% dividend cut

Telus Corporation (TSX:T) cut its quarterly dividend by 55% — from $0.4184 down to $0.1875 per share. The announcement was part of the firm’s second-quarter 2026 results report and was part of an announcement for a larger, more focused strategy for the corporation. In particular, Telus is planning to focus on three near-term strategic priorities:

• A reset of its quarterly dividend
• Planned removal of the dividend reinvestment plan (DRIP) discount
• Revised full-year financial guidance that reflects the company’s financial priorities

The dividend cut and the proposed refocus followed an $1.8-billion quarterly net loss and was the first earnings report under new president and CEO Victor Dodig, who took over from long-time chief Darren Entwistle on July 1, 2026.

The impact of this refocus is significant. Telus is one of the most widely held dividend stocks in Canadian TFSAs, RRSPs and RRIFs, so the cut touches a lot of retirement income streams and impacts those planning retirement portfolios.

It also attracted the attention of Gordon Pape, editor and publisher of the highly-respected Internet Wealth Builder and Income Investor newsletters. In a recent Globe and Mail column, Pape weighed in on whether the pullback makes Telus worth buying.

Why Telus cut its dividend now

New Telus CEO, Dodig, took the help on July 1, 2026 about a month before the release of the firm’s second-quarter 2026 results. The firm’s financials show Telus took a $2.1-billion non-cash writedown on Telus Digital, and this pushed the company into a net loss for the quarter. As a result, net debt climbed to 3.5 times the adjusted EBITDA at quarter-end. In the new refocus, management is targeting 3 times EBITDA (or lower) by the end of 2028.

The reset, plus the planned removal of the dividend reinvestment plan discount (effective as of October 1, 2026), is expected to preserve roughly $2.7 billion in cash through 2028 for debt reduction.

Dodig said the moves would “strengthen our financial foundation” and sharpen the company’s operating focus going forward.

Telus isn’t the first to slash dividends in recent years. BCE (TSX:BCE) cut its own dividend by about 56% in May 2025, trimming its annualized payout to $1.75 per share from $3.99. The Telus reset comes less than 15 months after that move, meaning two of Canada’s biggest telecom dividend payers have now slashed their payouts within an 18-month period. ## What the smaller dividend means for investors

The annualized dividend falls to $0.75 per share from $1.6736 — a cut of roughly $0.92 per share. Telus shares recently closed around $13.50, down sharply from about $18 at the start of the year, putting the new yield at roughly 5.5%, according to Pape’s analysis.

What does this mean for investors? Assuming you held 1,000 Telus shares in an RRSP, this holding would have collected roughly $1,674 a year in dividends under the old rate. At the new rate, that falls to about $750 a year — a drop of more than $900, before accounting for any change in share price.

Is Telus still worth holding? One expert weighs in

Reaction from Bay Street was mixed. Several analysts, including Morgan Stanley, CIBC and Barclays, trimmed their price targets and flagged dividend durability as an ongoing concern.

RBC Capital Markets went further, downgrading the stock and telling clients its earlier, more bullish call had missed the mark, while flagging a possible downside scenario as low as $11.