Trading Near Its 52-Week Low, Is Telus A Good Dividend Stock To Buy On Weakness?

Telecom giant Telus Corporation (TSX:T)(NYSE:TU) has faced a challenging market lately, with its share price declining 23% over the past 12 months. This sell-off has pushed its dividend yield to nearly 10%. While double-digit yields often signal financial distress, Telus' latest first-quarter 2026 earnings numbers suggest the business remains incredibly resilient.

Despite a dynamic operating environment, Telus delivered fairly strong financial results for the first quarter of 2026. Consolidated service revenue grew by 1%, and consolidated adjusted EBITDA held steady at $1.8 billion. More importantly for income-focused investors, cash from operations reached $1.05 billion, while free cash flow surged by an impressive 19% year-over-year to $583 million. This growth was supported by 1% mobile network revenue growth and 262,000 total net customer additions, highlighting sustained demand for its premium bundled services.

Beyond its core telecom business, Telus is unlocking new growth vectors. Its healthcare division, TELUS Health, posted robust 11% service revenue growth. Concurrently, its "Sovereign AI Factories" are seeing massive commercial success, with its first fully sovereign AI facility in Rimouski already sold out.

Management is actively advancing a comprehensive balance sheet deleveraging strategy to reduce the stock's overall risk. By pursuing strategic partnership opportunities for Telus Health and implementing rigorous cost management, the company expects to lower its net debt-to-EBITDA leverage target to 3.3-times or lower by the end of 2026. Backed by a target of 10% compounded annual free cash flow growth through 2028, Telus may be a safer dividend stock than it looks to be at first glance.

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