Telus Corp

S&P Dow Jones Indices announced that TELUS Corp will be deleted from the S&P/TSX Canadian Dividend Aristocrats Index effective prior to the open of trading on Tuesday, September 1, 2026. The change results from the monthly dividend review. No other companies were added or removed in this update.

TELUS Corporation announced a comprehensive transformation strategy including a 55% dividend reduction to $0.1875 per share quarterly and a revised 2026 outlook, as it reported second-quarter results. Service revenue fell 1% to $4.4 billion and adjusted EBITDA declined 2% to $1.8 billion, while a $2.1 billion pretax noncash impairment was recorded at TELUS Digital. The company now expects full-year service revenue to be flat to negative 2% and adjusted EBITDA to decline 2% to 4%, down from prior growth forecasts, and free cash flow guidance was cut to approximately $1.8 billion from $2.45 billion. CEO Victor Dodig outlined priorities to strengthen the balance sheet, targeting net debt to adjusted EBITDA of 3x or lower by end of 2028, supported by $2.7 billion in cumulative dividend cash savings and asset monetizations. The dividend reinvestment plan discount will also end on October 1, and a moratorium on acquisitions is in place until leverage targets are met.

Chevron shares rose 2.4% after reporting second-quarter 2026 adjusted earnings of $6.06 per share, surpassing the Zacks Consensus Estimate of $5.80 per share. ExxonMobil shares fell 1% after posting adjusted earnings of $3.52 per share, missing the estimate of $3.68 per share. TELUS shares plunged 11.2% after adjusted earnings of $0.12 per share lagged the estimate of $0.16 per share. LyondellBasell shares gained 2.7% after adjusted earnings of $4.30 per share outpaced the estimate of $3.56 per share.

TELUS Corp announced a 55% reduction in its quarterly dividend to $0.75 per share annually as part of a strategic reset to strengthen its balance sheet. The dividend cut is expected to generate approximately $2.7 billion in cumulative cash savings for debt reduction. The company also revised its 2026 guidance downward, with consolidated service revenue now expected to be flat to down 2% and adjusted EBITDA expected to decline 2% to 4%, compared to prior growth forecasts. Free cash flow for 2026 is now expected to be approximately $1.8 billion, down from the previous outlook of $2.45 billion, due to lower EBITDA, higher CapEx, and restructuring costs. TELUS reported a significant $2.1 billion pre-tax non-cash impairment at TELUS Digital due to accelerated automation of legacy services by hyperscale clients and slower-than-expected AI adoption. The company is advancing its asset monetization program, with active processes for TELUS Health and real estate assets, and a successful precedent set by the $1.26 billion Terion transaction. TELUS is committed to a transformation strategy focused on operational discipline, cost control, and investing in core telecom and digital infrastructure, with a target of 10% minimum compounded annual free cash flow growth off the lower 2026 base.

The United Steelworkers union is disappointed with ADT by Telus after the company announced it is eliminating all Canadian Client Representative, Retention and Client Representative and Customer Service positions. This decision will result in approximately 15 USW Local 1944 members in Calgary losing their jobs, a move that will cut the bargaining unit nearly in half. Despite employees overwhelmingly choosing to remain with the company rather than accept a voluntary separation package, ADT by Telus has informed the union it will once again offer workers a choice between accepting a lump-sum voluntary separation package or being laid off. The company has indicated there are virtually no redeployment opportunities available for affected employees, despite being part of one of Canada's largest telecommunications companies. USW Local 1944 President Michael Phillips said the union expected Telus to make every reasonable effort to redeploy these skilled workers, and USW Staff Representative Jayson Little added that Telus has the size, resources and responsibility to find meaningful redeployment opportunities rather than forcing loyal workers to choose between signing a release or losing their livelihoods.

TELUS stock still screens as expensive on broad valuation checks despite a 28.5% decline over the past year. The company trades at a P/E of about 25.0x, well above the telecom industry average of 17.0x and a peer group at roughly 9.4x, while a fair reference multiple for TELUS is around 10.4x. Participation in AI and broadband initiatives may support long-term earnings, but the current premium leaves the stock hinging on whether those efforts translate into stronger profitability while managing leverage and dividend commitments.