Investment Q&A

Q: I have held Telus for 10+ years and have been fine with the results but for the last year or so I have been wondering if they could be in risk of someone providing a product to compete with them for cell and internet coverage over satellite. I am aware of a few products for internet over satellite now. I read an article about perhaps Apple of going this route for their cell phones. With the recent announcement of the increased spend for Telus how likely do you see them in the position of shrinking revenue and earnings. Has the risk of the company increased.

Q: Hi Peter and 5i Team,

An article in the Globe & Mail (May 27) was titled:

“Telus to invest more than $70-billion in Canada over next five years to expand infrastructure”

Given that its payout ratio is now approximately 100%, and if interest rates should rise while there’s a slowdown in the economy, is this a prudent decision for Telus to take? Having recently sold BCE at a loss, and still owning T, are my concerns justified?

In the Communications Services Sector, we also have a small position in QBR.B, which is doing reasonably well so far. Its debt leverage is the lowest among its peers, which I believe to be an important metric at this time.

Thanks in advance for your insight.

Q: BCE has given up much of its post-dividend-cut rally - not to say that the cut was a bad idea, and maybe there's a support level lurking somewhere here. At the same time, I find myself wondering just what BCE's value proposition could be, now, to make it more attractive than T (or, for that matter, BNS or PPL, which offer similar yields)? Put another way: if investors have no reason to buy BCE other than income, and if declining interest rates are the only meaningful catalyst for share price appreciation, then, post-cut, isn't it at least as likely that it will continue to decline?

Q: Hello Team,
Could you give me a short commentary on both and which would you prefer for total return over the next couple of years. I already own Telus and wonder if there would be too much overlap to own both.
Thank You,
Barry

Q: One more time on Telus: the elevated payout ratio and the fact that they're not using dollars from the profitable Telus International is a huge concern but has the recent purchase of Workplace Options improved the picture in your view?

Q: Hello

Which of these 3 major Canadian wireless service providers is the best/safest buy at the moment taking in to account capital gains going forward and dividends.

Q: Hi 5i - what do you think the 10 year prospects are for BCE and Telus? Would you start or add to a position at current prices?

Thanks, Neil

Q: If Telus is successful in selling a minority position in its tower network, will the proceeds be enough to "right the ship" in terms of its ability to continue paying its stated dividend, its debt/equity ratio and any other metric used to evaluate whether the company is investable at this time?

Would you buy Telus today with the idea that if such a deal does go through that is merely a potentially added benefit and if so at what price would you initiate a position?

Thanks for the great service.

Ian

Q: If telus sells it's towers, will they have to pay "rent" or lease them back?. What would be the net results to their earnings, since the sale would be a one time event to pay down the debt, I hope.

Thanks

Q: Is Telus buyable today and what would be a good entry price?

Thanks.

Q: When companies like Telus issue millions of Restricted share units (RSU) like it recently did does this affect the share count and are these free shares given out as compensation irregardless of performance of the company? Thx for helping me to understand.

Q: Hello 5i,

I'm thinking of selling my BCE shares in my non-registered account for tax loss purposes since I'm also expecting a dividend cut shortly. I'm looking to replace the dividend income as much as possible and I'm thinking of putting the proceeds in Telus (which I already own) or FRU.UN (not owned but I already own TOU). I'm debating whether a possible capital appreciation with BCE following a dividend cut makes it worth rebuying after 30 days instead of continuing to hold T or FRU.UN for the long term? Overall, my goal is to maintain my dividend income with this particular trade.

I'm also thinking about replacing FSV with HPS.A (I had HPS.A FOMO a few months ago but I'm not sure it's going back to its previous days?) in my TFSA for overall returns and I'm wondering if you have a preference between the two?

Thank you,
Lisa

Q: Bank of America downgraded Telus to neutral from Buy. The reasons are excessive leverage and the dividend exceeding cash flow. The stock is down 5%.
Three questions:
1. Do you agree with the assessment of the analyst ?
2. The Analyst making the assessment is assigned only one star on a scale of five according to my broker. Does the fact that the analyst is assigned only one star makes his prediction less reliable?
3. What is your recommendation going forward for Telus ? Sell or hold ? Is there more downside risk? Although the dividend was increased twice in 2024 is there a risk of an imminent dividend cut ?
Thank you as always for your insight.
Please deduct as many credits as deemed necessary.

Q: Looks to be lots of inside buying on Telus or are RSU shares must be purchased as compensation?

Thx

Q: What do you think of telus or bce for income and some growth. is there a recovery in the near future.

Q: Hello. Notwithstanding the obvious issues with some of these names, as well as with the sector more broadly, how would you rank these 4 on a scale of 1-10, with 10 being the best. Context is ~ 2 year timeline.

Thank you.

Q: In process of rebalancing growth leaning portfolios, so for the Communications sector, what would be your top five or six "must own" holdings, any market in this sector. Currently I have a notional 6% allocation to sector and small positions in GOOG, SIXG (FIVG), NBIS, and Telus. At a 3.6% position I have room to grow and looking for ideas.

Q: Hi group can you please comment on Capitol direct trust - last quarter they paid out 9% + over last 3 yrs they have averaged 7+ %. What is your assessment of the risk rewards in this sector i suspect that restrictions on liquidly and management fees are concerns but the attractive quarterly payout are very attractive in this unstable market overall your thoughts please. I am 74 and retired so steady income is a driver. Also please rate the above stocks (1-10 . 10 being best) Thanks for your help

Q: Hi Peter and Team,

With the intent of better opportunities elsewhere, would YOU be a seller of BCE held in a registered account? (A significant loss, given the time we've held BCE)

Or, would YOU consider it a hold?

If a seller, would YOU add to our current holdings in Telus?

Or would YOU not stay in the sector for the time being due to all the headwinds it’s experiencing?

Thanks for your help.

Q: Hi 5i, thoughts on quarter, looks like the market approves. Forward guidance looks good, along with cost savings planned to reduce debt. Thx.