Dividend Stock Analysis of TELUS Corporation (USA) (TU)

From a valuation perspective, Rogers Communications looks to be the best option right now.

Rogers Communications is the only company that is currently rated a 5 star stock by Morningstar. Its current yield is the highest above its five year average, coming in 27% higher. It is currently a little above my $38 target price, but it is still the closest to my target compared to my other target prices of $22 for TELUS and $20 for Shaw Communications. Right now, Rogers Communications looks more appealing than TELUS.

Conclusion

TELUS has seen its price drops recently due to the announcement from Verizon, but it still needs to come down a lot more for it to reach my target price of $22. I expect dividend growth around 10% going forward. While 10% annual dividend growth is appealing, I think you can get similar rates from Rogers Communications with a better overall valuation. Overall, TELUS is a well run company and I’d be happy to invest more, but its valuation is currently too rich for me.

Michael Weber owns shares of TELUS and BCE. The Motley Fool recommends Rogers Communications (USA).

The article Dividend Stock Analysis of TELUS originally appeared on Fool.com and is written by Michael Weber.

Michael is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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