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Telus Corp T.T

Alternate Symbol(s):  TU

TELUS Corporation is a Canada-based communications technology company. The Company provides a range of technology solutions, including mobile and fixed voice and data telecommunications services and products, healthcare software and technology solutions, and digitally led customer experiences. Data services include Internet protocol; television; hosting, managed information technology and cloud-based services; and home and business security. Its TELUS technology solutions segment includes network revenues and equipment sales arising from mobile technologies, data revenues, healthcare software and technology solutions, agriculture and consumer goods services, voice, and other telecommunications services revenues. Its TELUS International segment comprises digital customer experience and digital-enablement transformation solutions, including artificial intelligence (AI) and content management solutions. It is also a cybersecurity provider specializing in advanced penetration testing.


TSX:T - Post by User

Comment by Milhouse123on Sep 21, 2023 11:48pm
225 Views
Post# 35648651

RE:Investment Thesis?

RE:Investment Thesis?Without getting too far into the weeds, the company is just starting to come out of a capital intensive period building out its fiber footprint and deploying 5G. Yet the big capital spends still won't be done until about year end 2024 after the last 5G spectrum auction.  T's earnings are impacted by its capex spend from non-cash accounting expenses such as amortization and depreciation.  Instead,I would point you to its free cash flow projections for a view of its profitability and where it's heading.  Its dividend payout ratio guidance is also based on its free cash flow (though it is skewed by DRIP numbers), not earnings.  

FCF was originally slated to grow from $1.27B in 2022 to about $2.0B in 2023 before it was recently downgraded to $1.5B due to its TI divison miss and most of which from a one time $475M in additional restructuring costs due to its recently announced layoffs which incidentally will create an additional $325M in annual cost savings that will likely flow to FCF.  

If you are truly a value investor, I do not think T is the right investment for you (nor BCE or RCI) as their numbers won't satisfy metrics that you would be screening for.  IMO, it's currently more of an income/yield play while waiting for some issues to shake out (TI, interest rates, debt ratio, etc) before significant SP appreciation as they start to fully harvest the capex investments in fibre and 5G with a big question mark on their non-traditional divisions of TI, Health, and Agriculture.      
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