{"id":4271,"date":"2026-08-10T14:25:14","date_gmt":"2026-08-10T14:25:14","guid":{"rendered":"https:\/\/smartinvestingschronicle.com\/index.php\/2026\/08\/10\/id-choose-this-cheaper-dividend-stock-over-telus\/"},"modified":"2026-08-10T14:25:14","modified_gmt":"2026-08-10T14:25:14","slug":"id-choose-this-cheaper-dividend-stock-over-telus","status":"publish","type":"post","link":"https:\/\/smartinvestingschronicle.com\/index.php\/2026\/08\/10\/id-choose-this-cheaper-dividend-stock-over-telus\/","title":{"rendered":"I’d Choose This Cheaper Dividend Stock Over Telus"},"content":{"rendered":"
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Telus <\/strong>(TSX:T) is a stock I have had some success covering lately. <\/p>\n

On July 13, I wrote that the company had an excessive payout ratio and would likely cut its dividend. I further wrote in the same article that the company was likely to sell off after announcing any dividend cut, as Canadian investors have a known dividend preference. On July 30, the company put out an earnings release in which it revealed that it would, in fact, be cutting its dividend, and subsequently declined by some 11.5% in the markets on the next trading day. To say my recent Telus coverage was accurate would be an understatement.<\/p>\n

Despite all that, there is one thing my Telus article from last month was definitely missing: ideas about what to do with money that one might have invested in Telus.<\/p>\n

While it\u2019s easy enough to point out that a particular stock is looking risky in some way (e.g., paying out more than it can afford to in dividends), it\u2019s harder to recommend a decent alternative.<\/p>\n

Truthfully, for most investors, the alternative in question is probably index funds. They are the lowest-risk investment with the highest expected return, assuming the person considering investing in them has no special business insights.<\/p>\n

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* Returns as of July 30th, 2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

If you\u2019re interested in individual stocks, however, I have an alternative to suggest that might perform a little better than Telus over the long run. Even after Telus\u2019s recent selloff, this stock is still cheaper than T, and that\u2019s despite it being a much stronger player in the national telco scene. While I\u2019m not invested in the stock personally, that\u2019s mainly because I\u2019m not interested in telcos as a group. To those who are interested in Canadian telcos: I\u2019m fairly certain that the stock I\u2019m about to name will perform better than Telus over the long term, for reasons I\u2019ll outline below.<\/p>\n

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Source: Getty Images<\/p>\n<\/figcaption><\/figure>\n

Rogers Communications<\/h2>\n

Rogers Communications <\/strong>(TSX:RCI.B) is a Canadian telecommunications company that is much stronger than Telus in many ways, yet still trades at a lower price-to-earnings ratio than Telus does. It has a bigger 5G network than Telus does, a wider national presence, and more geographic diversification. It is also the beneficiary of recent consolidation in the Telco space, having acquired Shaw (and all of its customers along with it). Despite this, Rogers trades at just 9.5 times earnings, while Telus trades at 16.3!<\/p>\n

A sensible payout ratio<\/h2>\n

One thing that Rogers has going for it today is a sensible payout ratio (that is, dividends paid as a percentage of total earnings). RCI.B\u2019s ratio is 40%, Telus\u2019s even after the cut will be just under 100%. So, even with Telus cutting its dividend, Rogers still has a much healthier payout ratio, which means more earnings to retain and invest back into its business.<\/p>\n

Decent growth<\/h2>\n

Unique among Canadian telcos, Rogers has actually been doing pretty decent growth in recent years. Over the last 12 months, the company\u2019s revenue increased 8%, and its earnings grew 307% year on year. Its compounded annual growth rates (CAGR) in these categories were pretty healthy over the last three- and five-year periods, too. Telus, however, saw its revenue shrink and its earnings barely increase in the trailing 12-month period. The same basic trend held over the trailing three- and five-year periods.<\/p>\n

An M&A winner<\/h2>\n

Rogers recently made a big win by buying out Shaw, a deal that saw Rogers take over 80% of that company\u2019s assets. Rogers had to unwind Freedom Mobile to Quebecor<\/strong> to comply with competition rules. The deal improved Rogers\u2019s market share, although Quebecor\u2019s strategy with Freedom Mobile (very low-priced plans) is increasing price competition in the telco space. It\u2019s a tough time for Canadian telcos in general, which is why I\u2019m not investing in the space. Nevertheless, Rogers is better positioned than most of the others, and it is likely to outperform Telus and its other large telco peers going forward.<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Telus (TSX:T) is a stock I have had some success covering lately. On July 13, I wrote that the company had an excessive payout ratio and would likely cut its dividend. I further wrote in the same article that the company was likely to sell off after announcing any dividend cut, as Canadian investors have […]<\/p>\n","protected":false},"author":1,"featured_media":4272,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-4271","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/posts\/4271","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/comments?post=4271"}],"version-history":[{"count":0,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/posts\/4271\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/media\/4272"}],"wp:attachment":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/media?parent=4271"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/categories?post=4271"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/tags?post=4271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}