TELUS (TSX: T) has been one of the most frustrating stocks for Canadian income investors in 2026, and I wouldn’t blame anyone for wondering whether it’s time to move on. Imagine watching a dividend stock lose over 40% of its value in a year, only to see the company make a steep dividend cut.
That’s hardly what most people expect when they buy an established telecom stock for steady income. But here’s where I find the decision tricky. TELUS still operates an extensive wireless and internet business, and its shares still offer a juicy dividend yield. The company is also trying to repair the balance sheet, with the dividend cut expected to save well over $2 billion in the coming years.
In this article, I’ll share why I’d recommend holding TELUS for now, what keeps me from buying it, and which improvements could eventually change my mind.
Telus stock
To decide whether TELUS is worth buying at its current price, let’s first understand what has been putting pressure on its shares.
This Vancouver-based communications technology giant provides wireless, internet, and other digital services, along with healthcare technology solutions. Over the last year, TELUS stock has plunged 42% to currently trade at $12.19 per share with a market cap of $19.4 billion. At this price, it offers a 6.1% annualized dividend yield.
While this dividend yield might look attractive for income investors, the company’s recent financial challenges are hard to ignore. Intense competition in Canada’s telecom market and aggressive promotional pricing have been weighing on its revenue growth. At the same time, slower population growth has reduced demand for new subscriptions, making it harder for TELUS to expand its customer base.
These pressures were evident in its second-quarter results. The telecom giant’s operating revenue for the quarter declined 2% year-over-year (YoY) to $4.9 billion, partly due to lower mobile equipment sales and weaker TELUS Digital revenue. Similarly, its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) slipped 2% YoY to $1.8 billion.
More concerningly, TELUS posted a quarterly net loss of $1.8 billion, mainly due to a $2.1 billion non-cash impairment related to TELUS Digital.
However, there were some encouraging signs beneath these disappointing numbers. For example, TELUS’s operating cash flow jumped 15% YoY to $1.3 billion, while its free cash flow improved 2% YoY to $545 million, backed mainly by lower income tax and lease payments.
Why I wouldn’t recommend selling Telus stock yet
Despite these challenges, I believe TELUS has some positive developments that make selling its beaten-down stock right now less appealing.
In July, the company announced a 55% cut to its quarterly dividend, bringing the payout down to $0.19 per share. While this was disappointing for income investors, the decision is expected to save roughly $2.7 billion through 2028, giving TELUS more room to reduce its debt.
The Canadian telecom giant also aims to bring its net debt-to-adjusted EBITDA ratio down to approximately 3 times or lower by the end of 2028, compared to 3.5 times in the second quarter. In addition, it plans to sell non-core assets and gradually reduce capital spending relative to revenue to strengthen its balance sheet.
Beyond these financial priorities, TELUS continues to invest in its core business. In the latest quarter, it added 187,000 connected devices and 20,000 internet subscribers. Its continued investments in PureFibre, fifth-generation wireless networks, and artificial intelligence (AI) infrastructure could also support long-term growth.
TELUS: My buy, sell, or hold verdict
Considering these factors, I would lean toward holding TELUS stock rather than rushing to buy more shares or selling at its current depressed price.
After all, its revised 2026 guidance suggests that the company’s near-term challenges aren’t over yet. TELUS now expects its adjusted EBITDA to decline by 2% to 4% this year, while generating about $1.8 billion in free cash flow.
Even so, its attractive dividend yield, established telecom business, and renewed focus on debt reduction make TELUS worth holding for patient long-term investors, in my opinion. I’d consider buying more shares once its earnings stabilize and its efforts to strengthen the balance sheet start delivering clearer results.