Victor Dodig speaks at the Intersect 2025 conference on June 9, 2025 in Toronto.The Globe and Mail
Welcome to the start of the Victor Dodig era at Telus Corp. T-T Expect folksy charm and calm reassurances that this is a rebound you won’t want to miss.
Oh, and kiss the current dividend goodbye.
Mr. Dodig, former chief executive officer of Canadian Imperial Bank of Commerce CM-T, became CEO of the Vancouver-based telecom on July 1, taking over from Darren Entwistle.
Telus names ex-CIBC chief Victor Dodig as CEO, replacing Darren Entwistle
He has inherited a hot mess of a stock.
The share price has fallen 57 per cent over the past four years, as telecoms struggle with slowing population growth and intense competition for wireless customers. There is even the emerging threat of new players – such as Starlink, a division of Space Exploration Technologies Corp., or SpaceX – potentially entering the wireless sector in the United States and denting valuations elsewhere.
Equally alarming, the declining share price has driven the dividend yield on Telus shares above 11 per cent, which suggests that the market is resigned to a large cut.
Some analysts agree that it may be the best solution to a killer combination of slow growth and an alarming debt load.
“We believe a roughly 50 per cent dividend reset would create the financial flexibility needed to begin repairing the balance sheet and reset the equity story on a more sustainable footing,” Maher Yaghi, an analyst at Bank of Nova Scotia, said in a note this week.
If Mr. Yaghi is right, that 11-per-cent yield will fall to 5.5 per cent.
But is that a reason to run from the stock now? I don’t think so. (Full disclosure: I own shares of Telus and BCE Inc. BCE-T, and I am under water on both).
One source of hope: The wireless market is showing signs of stabilizing, which is a welcome shift for investors, after service prices declined by 40 per cent over the past five years, according to the CRTC.
Telecoms are now competing on packaged bundles, such as access to televised sports, rather than cutting prices.
In June, “pricing remained unchanged across all tiers, with the focus shifting to plan perks instead,” Stephanie Price, an analyst at CIBC Capital Markets, said in a note.
Another source of hope: Mr. Dodig.
He arrives at Telus with a well-earned reputation for rebuilding investor confidence where it was once lacking.
How Telus’s unexpected CEO change came about
His leadership at CIBC started in September, 2014, when the bank was still struggling to emerge from earlier financial setbacks – including those related to the financial crisis and the collapse of Enron – that weighed on the stock. It could be seen as a poor choice next to more consistent performers within the Big Six.
But through steady growth, successful expansion into the United States, a focus on efficiency and an accident-free decade, CIBC’s fortunes have shifted for the better.
The stock emerged as an outperformer during Mr. Dodig’s leadership, in terms of share price performance before dividends. It trailed only Royal Bank of Canada and National Bank of Canada through October, 2025.
During Mr. Dodig’s final two years at the helm, CIBC’s share price surged nearly 138 per cent. It outpaced its closest competitor, RBC, by an outstanding 52 percentage points, according to Bloomberg data.
Sure, telecom is not banking. And while Mr. Dodig could entice investors to CIBC with a steadily rising dividend, that option seems far-fetched at Telus right now given its lack of financial flexibility.
But the two sectors share a few traits: Both demand deft navigation through government regulations, shifting technologies and well-armed competitors. That fits well with Mr. Dodig’s previous job description.
Lastly, there’s the dividend to consider. The threat of a cut has been hanging over the stock since BCE slashed its quarterly payout by 56 per cent last year.
With a cut now virtually baked into the Telus share price, delaying the move might not help anyone. Preserving the dividend would ensure that the telecom’s balance sheet would remain stretched and investors would face continuing uncertainty over whether a cut was still looming.
Cutting it, on the other hand, will deliver something that investors should crave: a stronger balance sheet, restored confidence in future – if smaller – quarterly payouts and leadership that is capable of making bold moves.
No one likes a dividend cut. But if Mr. Dodig caters to the market’s demand for one, Telus just might shake off the weight that has been dragging the stock down.