Canadian telecom company
) announced its plans to repurchase 4 million shares. This share
buyback program is part of its 15 million share repurchase
authorization announced on May 21, 2013.
We believe that the company's focus on improving balance sheet
position is playing a pivotal role in maximizing shareholders
returns. Further, the carrier's attractive market position in the
Canadian wireless business also bodes well for long-term
Telus has so far remained successful in expanding its wireless
subscriber base, marketing of smartphones like
) iPhone, improving churn (customer switch), increasing average
revenue per unit, accelerating wireless data services and growing
wireline fiber optic networks. As a result, the company expects
these parameters to support its financial position without
additional financial leverage.
Consequently, the company will see earnings growth on lower
financing costs and higher EBITDA of $250 million by 2015. In
addition, Telus expects free cash flow growth on reduced cash
taxes and employer pension contributions, despite continued
investments in the expansion of both wireline and wireless
The consistent earnings performance and strong free cash flow
has resulted in management's commitment to return value to
shareholders through attractive dividends and share buybacks. The
company expects a payout ratio between 55% and 65% of net
earnings over the long term.
In May, Telus raised its quarterly dividend to C$0.34 per
share from C$0.32, paid previously. The move is in sync with the
company's plan to hike dividend twice every year - expectedly in
May and November.
In addition, the company increased its dividend growth program
by another three years from 2013 to 2016, with projection of
semi-annual dividend growth of approximately 10%. Further, the
previously announced two-for-one stock split of common shares was
completed on Apr 17.
Going forward, the company also expects its latest repurchase
program to increase to $2 billion by 2016. Together with share
purchase and dividend payments, the company targets to return up
to $6 billion or around C$10 per share through 2013-2016 to its
TELUS Corporation - which operates within the Canadian telecom
industry along with
Rogers Communications Inc.
) - currently carries a Zacks Rank #2 (Buy).
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