) recently announced a stock split of two for one. The company's
shareholders are expected to receive their additional shares on
Apr 16, for each share they hold on the record date of Apr 15,
2013. Post split, Telus shares will commence trading on TSX
and NYSE from Apr 17.
Telus' stock split remains concurrent with its shareholder
friendly initiatives that aim at improving their interest while
adding liquidity in share trading. Under these initiatives, the
company has taken several measures.
These include exchanging 151 million non-voting shares with
common shares in a 1:1 ratio on Feb 4, 2013, and adhering to a
dividend growth model of 10% per annum from 2011-2013. In
addition, the company also intends to provide updates on dividend
growth for the period 2014-2016 at its shareholder meeting on May
Such initiates lead us to believe that Telus is focused on
maximizing shareholder value by increasing returns. This can be
attributed to the company's business momentum that supports the
top and bottom lines, thereby enhancing its market value.
Telus continues to benefit from its leading wireless subscriber
base, increased penetration of smartphones, improving churn
(customer switch), accelerating wireless data services and
spreading wireline fiber optic networks. Based on these
tailwinds, the company has registered increasing average revenue
per unit in 2012.
As a result, the company expects earnings to improve on better
revenues and operating profits as well as lower financing costs
in the near term. In addition, Telus expects free cash flow
growth to improve on reduced cash taxes and employer pension
contributions, despite continued investments for the expansion of
both wireline and wireless services.
However, accelerated access line erosion in the wireline segment,
a weak Canadian economy, competitive threats and reduced roaming
charges keep us wary on the stock.
Telus Corporation - which operates within the Canadian telecom
industry along with
Rogers Communications Inc.
) - currently carries a Zacks Rank #4 (Sell).
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), with a Zacks Rank #2 (Buy), is another stock in this sector
that is worth considering.