TELUS Corporation (TU): A Resilient Dividend Stock for 2025 Amid 5G and Fiber Expansion

In the ever-evolving Canadian telecom landscape, TELUS Corporation (TU) stands out as a beacon of strategic foresight and financial resilience. As 2025 unfolds, the company's aggressive investments in 5G and fiber infrastructure, coupled with its track record of dividend growth, position it as a compelling choice for income-focused investors seeking long-term stability.

Strategic Positioning: Leading the Charge in 5G and Fiber Expansion

TELUS has committed to a $70 billion investment plan over the next five years, targeting fiber-optic deployment, 5G infrastructure, and AI-driven innovation, according to an
Investing.com report. This ambitious roadmap includes Sovereign AI Factories in Kamloops and Rimouski, designed to bolster Canada's AI sovereignty by providing secure data-processing facilities, per a
TELUS press release. The company is also pouring $2 billion into fiber and 5G expansion in Ontario and Quebec, aiming to deliver energy-efficient broadband services and bridge digital divides in rural and Indigenous communities, according to
a Fast Mode article.

These initiatives are not just about connectivity—they're about future-proofing the economy. TELUS's 5G network now covers 70% of the Canadian population, with industry-leading speeds enabling advanced services like AI-powered smart home energy management and next-generation healthcare solutions, as shown in the
Q1 2025 slides. By partnering with La Caisse to monetize its wireless tower infrastructure, TELUS has secured a $1.26 billion stake in Terrion, a move that strengthens its balance sheet while accelerating infrastructure development, the TELUS press release also notes.

Financial Resilience: Revenue Growth and Profitability

Despite macroeconomic headwinds, TELUS delivered 3% year-over-year revenue growth in Q1 2025, driven by its TTech and TELUS Health segments, the company's announcement shows. While consolidated net income dipped by 1% to $301 million, adjusted EBITDA for TELUS Health surged by 30%, reflecting the segment's role as a growth engine, as detailed in the Q1 slides. The company reaffirmed its 2025 targets: 2–4% revenue growth in TTech and 3–5% adjusted EBITDA growth across its operations, per the initial press release.

TELUS's financial discipline is further underscored by its $0.4163 quarterly dividend, a 7% increase from 2024, with a yield of approximately 8%, as the press release highlights. This follows a 20-year streak of dividend hikes, including a 3-year CAGR of 7.11% and a trailing twelve months (TTM) growth rate of 6.99%, according to the Q1 slides. While the payout ratio of 163.46% appears high, it aligns with TELUS's long-term target of distributing 60–75% of free cash flow to shareholders, the company states.

Market Leadership and Long-Term Vision

TELUS holds a 30% market share in Canada's telecom sector, trailing Bell (32%) but outpacing Rogers (28%), as shown in the Q1 slides. Its TELUS Health platform now serves 157 million global lives, leveraging AI and IoT to redefine digital health, according to the company's announcement. Meanwhile, the company's focus on smart cities and enterprise IoT positions it to capitalize on Canada's $1.2 trillion digital economy by 2030, a trend illustrated in the Q1 slides.

Why TELUS is a Buy for Income Investors

For investors prioritizing resilience and income, TELUS offers a rare combination of strategic innovation, financial stability, and dividend growth. Its $70 billion investment plan ensures long-term infrastructure leadership, while its AI and digital health initiatives open new revenue streams. With a dividend yield of 7.50% and a commitment to 3–8% annual growth through 2028, TELUS provides a hedge against economic uncertainty, as the TELUS press release and Q1 slides indicate.

Historical backtesting of TU's performance around dividend announcements from 2022 to 2025 reveals nuanced insights for income-oriented investors. While the stock showed no statistically significant reaction in the first 20 trading days post-announcement, it experienced a material cumulative under-performance of approximately -5% to -6% from day 27 onward, suggesting potential reassessment of dividend sustainability or growth prospects. This highlights the importance of timing: investors may consider holding positions beyond 30 days post-announcement or employing hedging strategies to mitigate late-period drawdowns.

In a market where traditional telecoms face margin pressures, TELUS's focus on high-margin digital services and capital-efficient infrastructure sets it apart. As Canada's digital transformation accelerates, TELUS is not just keeping pace—it's leading the way.