Friday, November 2, 2007

Telus hikes dividend 20%

Telus reported a 28% jump in third quarter earnings today, and raised the quarterly dividend 20% to $0.45 / share. They also boosted their 2007 earnings forecast. One negative on this report was the fact that their average monthy revenue per user or 'ARPU' decreased 1.3% to $64.80. Telus is certainly trailing competitor Rogers Communications in subscriber growth, as Rogers reported strong subscriber gains in the quarter. Telus now has 994,000 high speed internet subscribers, up from 962,700 last quarter. Telus TV was also launched in several Quebec cities during the quarter, joining Vancouver, Calgary, and Edmonton.

Telus shares, which I own, now yield almost 3.4% on today's mid afternoon price of $53.50 / share.

Below is Telus' recent dividend payment history:
2004 = $0.60 / share
2005 = $0.80
2006 = $1.10
2007 = $1.50
2008 = $1.80 (estimated)

This represents a compound annual growth rate of the dividend of over 30%. One share of Telus bought in 2004 for $22.00 would now be yielding almost 8.2% on original investment, which some say is a meaningless statistic, but nevertheless it is an interesting one. Telus though, can not really be called a great long-term dividend growth company as they have only really ratcheted up the payments over the past 4 years, and the actual company (Telus) has a short operating history as it is.


Anonymous said...

"Which would now yield 8.2%". Why is would this stat be meaningless to some people?


MG said...

The reason this stat is thought to be meaningless is because it is not the true, current yield. The stock's yield at which it can be bought at currently is more like ~3.2%. Yield on original investment is nice but it tells you much less. The stat has you focusing on hisotry instead of current or future trends.

Personally I think it provided insight, and it interesting to look at.

MG said...

sorry for all the typos...