Is it good to buy Telus stocks
6/17/2024 08:56am
**Telus Corp. (TU) does not appear to be a compelling buy at this time.** Here's why:
1. **Financial Performance Concerns**: The company's negative year-on-year total revenue growth rate of -0.75% and a net profit margin of only 2.84% are indicators of potential financial struggles.
2. **Valuation Concerns**: The P/E ratio of 42.06 suggests that the stock is relatively expensive compared to the industry average, which may not be justified by its earnings potential.
3. **Dividend Yield**: While the dividend yield of 6.93% is attractive, the payout ratio of 134.1% indicates that the company relies heavily on its balance sheet to cover dividends, which could be a concern for its sustainability.
4. **Market Sentiment**: The consensus rating is "Neutral" with an average price target of $26, which is below the current trading price, suggesting that analysts do not see significant upside potential in the near term.
5. **Fund Flow**: The net fund flow of -$171,965.4 indicates that investors are pulling money out of the stock, which could be a sign of market sentiment or potential selling pressure.
6. **Hedge Fund Activity**: The involvement of hedge funds like Heathbridge Capital Management Ltd. and Crossmark Global Holdings Inc. in the stock does not necessarily indicate a positive outlook, as hedge funds often employ various investment strategies.
In conclusion, while Telus Corp. does pay a decent dividend and has some institutional support, the negative revenue growth, high P/E ratio, and concerns about sustainability of dividends suggest that potential investors should exercise caution. It is important to consider your own investment strategy, risk tolerance, and the specific circumstances before making any investment decisions.