RE:# 3 Top Pick Telus (T TSX)
Telus’ shares have been negatively impacted by higher interest rates, competitive impacts, and high capex expenses. However, with an attractive valuation, defensive characteristics and 6.7 per cent dividend yield, we believe Telus shares should outperform in the medium term. Telus is further ahead of its FTTH buildout which should provide greater wireline subscriber traction as well as reduced capex going forward. Competitive intensity should eventually stabilize and while immigration targets in Canada may get reduced, it is still expected to see the fastest population increases of any G7 country. During periods of economic weakness, telcos provide relatively stable earnings as they provide critical services such as internet and mobile cell service. While the rest of the market accelerated in 2024, telco share prices remain depressed. At a time when we feel the market is disconnected from the economy, we feel it is safer to focus on companies with solid dividend yields where we can collect the bulk of our return expectations in the form of a dividend and rely less on market price appreciation.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
| BEP.UN TSX | Y | Y | Y |
| TRP TSX | Y | Y | Y |
| T TSX | Y | Y | Y |