A dividend screen can keep lying after the dividend itself has changed. TELUS (TSX:T) cut its quarterly payout by 55% on July 31. The declared rate is now $0.1875 quarterly, or $0.75 annually. At a recent price of $13.48, that produces a forward yield of approximately 5.6%. That’s still tempting, but investors comparing Canadian dividend stocks should separate today’s yield from tomorrow’s potential dividend growth.
The reset
TELUS stock operates wireless and fibre networks alongside its Health and Digital businesses. Its core telecom operations remain valuable. During the second quarter, mobile network revenue increased by more than 1%, while the adjusted telecom earnings before interest, taxes, depreciation, and amortization (EBITDA) margin expanded by over one percentage point.
The wider company is having a harder time. Consolidated service revenue declined 1%, TELUS Digital revenue fell 10%, and Digital’s adjusted EBITDA dropped 19%. Management reduced its 2026 outlook, reset the dividend, and paused further dividend increases while working to reduce leverage from 3.5 times net debt to EBITDA.
TELUS stock trade below one $20 fair-value estimate, but that discount reflects weakening expectations rather than a routine market wobble. Competitive telecom pricing and possible structural pressure on TELUS Digital remain substantial risks. So, does that mean there’s another telecom that investors should take a look at?
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Why Rogers could eventually grow faster
Rogers Communications (TSX:RCI.B) owns national wireless and cable networks, along with Sportsnet and major sports assets. Its second-quarter service revenue increased 8%, adjusted EBITDA rose 3%, and free cash flow grew 6% to $982 million.
Rogers stock expects $4.1 billion to $4.3 billion of free cash flow in 2026. Its $2 annual dividend requires roughly $1.08 billion based on the current share count, representing about one-quarter of the midpoint of that guidance. TELUS stock, by comparison, is targeting a 45% to 60% free-cash-flow payout ratio following its cut.
At approximately $50.67, Rogers stock trades for around 10.5 times forward earnings. The catch is leverage. Its debt ratio was still 3.8 times EBITDA in June. Rogers stock also plans to spend $4.35 billion buying the remaining 25% of Maple Leaf Sports & Entertainment before pursuing a minority asset sale.
Foolish takeaway
TELUS stock clearly produces more income today. Rogers stock starts approximately $162 behind on a $10,000 investment. The Rogers thesis is instead about capacity. Rising free cash flow and a comparatively modest payout could leave room for increases after management reduces debt.
Rogers stock hasn’t announced a dividend increase, and its payout has been unchanged for years. Investors shouldn’t treat unused capacity as a promise. Still, TELUS stock has explicitly paused increases after cutting its dividend, while Rogers stock appears to have more financial room to restart growth. For patient investors building a diversified portfolio, that could make Rogers stock the better income compounder, even though TELUS stock pays considerably more right now.
