Other than the benefits of both this sector's limited competition in our country and
this government's immigration policy that has been put in place, are there any other reasons why Telus holds a relatively large PE valuation relative to the single digit PE's of both AT&T and Verizon?
From 2020-22, Telus has covered its dividends. Operating cash flows help provide a better picture of dividend coverage due to the non-cash items included in earnings. Cash from operations in 2020 was $4.57B, 2021 was $4.38B and 2022 was $4.81B. If we compare this to dividends paid in 2020 it was $930M, 2021 was $1.045B, and 2022 was $1.12B. This indicates that Telus has been covering its dividends. To further look at payout ratio for each year from 2020-22, it has been 77%, 63.14%, and 73.56%. Although this is a very high payout ratio Telus has covered. Cash from operations for 2023 and 20204 is expected to be 4.12B and 5.64B, so it is likely that T will continue to cover its dividend payments on a cash basis.
Competition is a large reason why Telus has a much higher valuation than AT&T or VZN. The Canadian telecom industry, being much more regulated than the US, makes it much safer in terms of competition with the top three firms having majority of the markets concentration. Telus also has a much stronger EPS outlook than VZN or AT&T.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in VZ.