(RTTNews) - TELUS Corporation (TU), a Canadian telecommunications and information technology company, on Wednesday provided an updated mid-term outlook and further details of its enhanced capital allocation framework, including a new multi-year free cash flow growth target.
The company will also pause dividend growth while maintaining the quarterly dividend at $0.4184 per share, and will begin a phased reduction of its Discounted Dividend Reinvestment Plan (DRIP) starting in early 2026.
TELUS said it expects to generate about $2.15 billion in free cash flow in 2025, in line with prior targets. From 2026 to 2028, it aims for a minimum compounded annual free cash flow growth rate of 10%. The preliminary free cash flow target for 2026 is $2.4 billion, with capital expenditures of approximately $2.3 billion.
TELUS said these measures support its plan to reduce its net debt-to-EBITDA leverage ratio to about 3.0 times by the end of 2027. As of September 30, 2025, leverage had improved to 3.5 times, supported by the Terrion partnership, hybrid note issuances, strategic partnerships, non-core asset divestitures, and strong cash flow from TELUS Digital. The company expects the ratio to decline to roughly 3.3 times by the end of 2026.
Under the revised DRIP schedule, the current 2% discount will fall to 1.75% for dividends declared in February and May 2026, then to 1.5% for August and November 2026, to 1% for dividends declared in 2027, and will be eliminated entirely in 2028.
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