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Telus Corp.: A Formidable Pick For Dividend Growth Investors

Published Thu, 14 Mar 2019 09:05:51 -0400 on Seeking Alpha

Investment thesis
Telus shares (NYSE: TU) have declined marginally over the last 12 months, but have continued to provide an attractive dividend yield to investors.

(Source – Morningstar)
Telus is set to grow for many years to come, driven by its strategy to improve the quality of its services offering. The company has invested a significant amount to build the necessary infrastructure to shift from copper cables to fiber-to-the-home technology. I expect this to provide competitive advantages to the firm, and a much higher market penetration by the end of next 5 years. Shares yield over 4.5% at the current market price, and are trading at a discount to my fair value estimate.
Company overview & business strategy
Telus is one of the big three wireless services providers in Canada, accounting for almost 30% of the total market. Telus operates under two different business segments.
Wireless Wireline Over the last several years, the wireless segment has continued to gain traction, and has been the main driver of customer connections growth in this period.

(Source - Investor presentation)
Telus provides various solutions to its customer base in Canada, including personal, business, and healthcare solutions.
Personal solutions

Business solutions

(Source – Company website)
The primary business strategy of Telus is to acquire a higher customer base by providing a top-quality service, and the company has... Read more