Telus's Dividend Cut, Outlook 'Much Worse than Expected'

Dow Jones
07/31

1046 ET - Telus's dividend cut and guidance changes were "much worse than expected," says TD Cowen's Vince Valentini in a note. The Canadian telecom company is cutting its dividend by 55%, calling the move a reset, to put the money towards the company's debt repayments. Overall, Valentini says 2Q results "were not that far below our expectations," with "beats in free cash flow, mobile average revenue per unit, and wireless service revenue." However, the analyst also adds, "If we simply take the new dividend (C$0.75) at the current BCE yield (5.8%), then we get a value of C$13.03 per T share." Telus slides 12% to $13.21.

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