Telco’s earnings won’t disappoint – 50 More Shares

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Telco’s earnings won’t disappoint – 50 More Shares

Hey everyone

Hope life has been treating you well and your continuing to stay healthy. A lot is happening in the world and news is changing daily. The market climbs on optimism but the reality is things aren’t looking too hot at the moment.

Personally I have been watching this market and just thinking what in the actual F&**….

With time things will be back to a new normal but I think in the next 2 quarters we will be seeing a lot of negative earnings. This should create some more fantastic opportunity’s. At the same time though, certain company’s and sectors continue to pile in the money.

Should I just sit here and stack cash and hope things go to shit, so I can buy at a better price? I dunno that’s not really my style. Although I am going to cap our investment to around $1000-1200 plus that $250 for xaw etf a month. All money above that will be sitting in the investment account waiting for a even better time to deploy it.

One that I believe will do really well is telco’s. Lots of people are in lock down and are sitting on their phones, streaming all the time. Playing poker online, talking to friends with houseparty, zoom, facetime etc. Of course you try to get outside as much as you can, but here its actually been snowing off and on and cold. I’m not outside as much as I was last week.

Imagine a lock down without your phones or internet.. People would be going absolutely crazy.




Telus

Recently Telus did a 2 for 1 stock split in a effort to encourage more investment. This does nothing to the financial’s but appears cheaper at first glance to potential investors. The lower stock price is great for people who aren’t deploying that much cash as you feel like you get more shares. I think this was a great move and should help improve that stock price moving forward.

An added bonus is that drip is now easier to get. As you already know I’m a huge fan of drips! I currently receive about 55 quarterly from Telus which drips 2 shares but now because of the split I can deploy a little more capital and hopefully get 3 drips a quarter. Compounding at it’s finest!

Out of Canada’s big 3 Telcos (Telus, Bce and Rogers) Telus has the highest dividend growth rate. They plan to increase it by 7-10% a year until 2022. Of course in this environment nothing is guaranteed. Telus has raised their dividend the last 16 years and have a 10 year dividend growth rate of 9%.

There could be benefits from covid 19 for Telus though. They also have telus health, a way to use technology to improve the entire healthcare system. I can talk a little about it but I think you would be better off checking out their website here to learn more about this.

I guess the elephant in the room regarding all Telco’s is 5g. There is a lot of debate on this. I’m not a health care guy or anything but a lot of people say the move to 5g will have massive health effects. If there is that much risk, do we really need it? I don’t think so, but I think it’s coming anyways. This will be extremely capital intensive, so dividend growth may be lower.

One of my biggest concerns is that fact that telus has decided to use Huawei Technologies Co gear for 5g. While this is the cheaper way to go. Huawei has been a hot topic in the tech world. Will governments, corporations & people in general switch to the other providers who decided against using Huawei?

Time will tell……

The Purchase

We added an additional 50 shares of Telus this week at $22.39 per share. While its not the 52 week low its also 20-25% cheaper than their 52 week high. I feel good adding at these levels. This purchase adds $58.26 in forward income to our dividend portfolio and hopefully enables that third drip each quarter.




Conclusion

In total we now have 248 shares of telus in the portfolio. In these uncertain times, I feel the telco’s offer a great deal of safety and rising dividends for years to come. The market still offers up quite a bit of deals, but its crazy to see certain stocks hitting 52 week highs. 2020 will certainly be a bumpy ride.. Is there any stocks you have been purchasing or watching? Or just topping up that cash?

As always do your own research, stay healthy, smile and try to enjoy these moments with your family.

cheers.

14 Responses

  1. Matt M. says:

    All good points Rob, I’m long on Telus and feel really good about adding at this price point! A few years back when I wanted a company in this industry, it really was the dividend growth rate that drew me to Telus over Bell and Rogers. Have a good weekend!

    • Rob says:

      hey Matt

      Their growth rate sure has been nice. Bell gives you a solid 5% each year which is nice as well. Both our phones are with virgin mobile so always like getting that bce dividend too.

      Thanks for commenting Matt, have a great weekend as well.
      cheers

  2. German says:

    Hey Rob, I like your Telus purchase. I think the cellphone is an essential product. People are used to be connected at all times. Although, we don’t go out anymore, we still need a cellphone because most people don’t have a landline anymore. And since Canadian are received the $2K CERB, they should have enough money to pay the bills.

    • Rob says:

      hey German

      For sure, if anything those phone bills will be the first to be paid. I have left the house for work without my wallet before but if I forget my phone I go back to get it – wallet only if I need to get gas will I go back

      crazy priorities right?
      cheers

  3. Good by. Telus is rock solid. Might face some bad earnings for a couple quarters and things will be back to “normal” after the pandemic.

    • Rob says:

      Thanks Pursuit

      You think telus will experience a couple bad quarters? or the economy as a whole? we slowly seem to be getting out of this rut.

      Looks like we finally got the go ahead to start landscaping. Will feel good to be back at it.
      All the best pursuit
      cheers

  4. I’ve owned Telus since 2004 and consider it among my core holdings. My yield on cost is now over 11%. keep buying as I believe Telco’s to very stable even in these difficult times.

    • Rob says:

      wow div

      11% that is impressive! congrats. Hopefully one day my yoc will be that high. I agree telcos are extremely stable given our need to always be online.
      cheers

  5. GYM says:

    I have Telus too and tried to buy more but it hasn’t hit my limit order yet. I agree, my screen time has been THROUGH THE ROOF. It’s been better lately as I stopped obsessively looking up COVID-19 information and stats.

    • Rob says:

      haha gym

      I really try not to watch much about covid. Information is all over the place. news in the morning with my coffee is all i need.
      Hope your limit order hits for you.
      cheers

  6. Hey Rob,

    T is definitely one of my favourite names out there. A strong, consistent, dividend growth track record, coupled with the transparency around their plans with it, is amazing. I’m interested to follow how TELUS Health develops over the coming years; they already have a strong position in the electronic health record market, and there will be plenty of opportunities to expand there in the years to come.

    Take care,
    Ryan

  7. Wally says:

    Hey Rob. Telus is a solid pick. I added to my position this week as well and wouldn’t mind adding more in the near future. Hope you are staying safe during these crazy times.

Id love to Hear What You Think

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