When traders in search of a dividend inventory to purchase discover one that provides a yield within the double digits, the primary response is usually alarm. That’s as a result of an especially excessive yield is normally an indicator of an unsustainable enterprise. It might additionally imply that the market has priced in excessive danger.
However that’s not at all times the case. Typically, the market can change into too targeted on what went flawed and ignore what might start to go proper.
That’s the case with Telus (TSX:T). The telecom large has struggled lately as increased rates of interest and elevated debt ranges weighed closely on the inventory. And whereas that despatched the inventory decrease, it propelled the yield into double-digit territory.
It even raised questions on whether or not the quarterly dividend was nonetheless sustainable.
However right here’s the factor. Telus continues to generate billions in money move. The corporate’s outlook for the remainder of 2026 means that its monetary efficiency is transferring in the fitting route, too.
Which means that traders in search of to offset danger may gain advantage drastically from this uncommon mixture of large revenue potential now and vital restoration potential sooner or later.
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An 11% yield hiding in plain sight
Telus is certainly one of Canada’s huge telecom shares. The corporate offers wi-fi, wireline, web, tv, and different communications companies to thousands and thousands of consumers throughout Canada. These companies are subscription-based, producing a recurring income stream.
Lately, the wi-fi and web segments have change into extra of a necessity for subscribers, giving Telus extra defensive attraction.
Other than its core subscription-based choices, Telus has expanded into providing different digital companies by its Telus Well being and Telus Digital companies.
But regardless of that broad providing of rising requirements, traders have largely targeted on the telecom’s steadiness sheet and the amount of money required to fund that dividend.
These considerations contributed to the decline within the inventory worth, pushing the dividend yield effectively into double-digit territory. As of the time of writing, Telus gives a dividend of $0.41 per share, which works out to a yield of 11.3%.
Which means that traders who deposit $5,000 into the inventory will generate over $550 in annual passive revenue. To place it one other approach, that’s over 35 new shares generated and able to compound for annually of ready.
That being stated, whereas Telus works on bettering its monetary home, the corporate has paused its dividend progress. Which means that potential traders shouldn’t anticipate any dividend progress anytime within the foreseeable future.
As a substitute, these traders can anticipate to gather an unusually excessive stage of revenue whereas ready for Telus’ monetary place and market sentiment to enhance.
Why Telus might soar in 2026
One of many foremost causes traders needs to be constructive about Telus’s potential to enhance its place may be traced again to money move. The corporate is focusing on $2.45 billion in free money move for 2026. Telus can also be focusing on service income and adjusted EBITDA progress to come back in at 2% to 4%.
Up to now, the outcomes are encouraging. In the course of the first quarter, Telus generated $583 million in free money move. That’s a 19% enchancment over the identical interval final 12 months.
Telus Well being can also be seeing promising progress, and extra importantly, the phase permits Telus to diversify exterior its core telecom market. Within the first quarter of 2026, Telus reported that service income and adjusted EBITDA from the phase each elevated by 11%.
Is that this high-yield dividend inventory value shopping for?
No inventory is with out danger, and that’s evident in reviewing Telus. The corporate isn’t a low-risk possibility as we speak. The ultra-high yield supplied displays that danger.
That being stated, the risk-reward is changing into attention-grabbing.
Buyers shopping for Telus as we speak are getting an 11.3% yield whereas administration works towards increased free money move and decrease leverage. In the meantime, Telus Well being offers a progress platform that would change into extra necessary and contribute extra in direction of earnings over time.
That makes Telus a singular sort of dividend inventory alternative. For traders, the high-yield dividend is paid generously to traders ready for that turnaround to come back to fruition.
For revenue traders who can tolerate the added danger, Telus may very well be some of the attention-grabbing Canadian dividend shares to look at in 2026. If free money move continues rising and debt ranges enhance, Telus might have room to get better as half of a bigger, well-diversified portfolio.
