Looking for an attractive stock to wait out the coronavirus crisis? Look no further than Telus (Telus Stock Quote, Chart, News TSX:T) says Brett Girard of Liberty International, who thinks the Canadian telco giant has a history of shaking off shocks in the market.
Girard appeared on BNN today and revealed that Telus is one of his top three picks. This is despite an aversion to Canadian stocks.
“Normally we don’t like to have too much Canadian in the portfolio, but I think with the work from home trend that’s taking off and just the connectivity that people have with the use of their phones and the internet,” Girard said. “This company is going to be able to get through and they will get to the other side.”
The fund manager said there is historical precedent for owning Telus in a market drubbing.
“If you look back to 2008, they actually continued to grow through the crisis,” he noted. “Albeit it was it was very slow growth, but it was positive. We like TELUS and we think there’s a smart management team in place. Now a lot of companies now are suspending dividends and suspending buybacks because they’re worried about cash, but what TELUS did was they actually issued shares back in February, at the top of the market. So their adjusted price at issuance was about $26, which is significantly higher than they’re at right now. So smart team. Kudos to them for raising cash when the time was right.”
Girard said Telus’s dividend makes it even more attractive.
“Right now you get paid to wait,” he added. “You hold this stock you get 4.5% a year. It might dip lower and there might be more buying opportunities but this is a quality name to hold for the long term.”
Shares of Telus closed February 12 at $27.67 and fell with the market as the impact of the COVID-10
9 crisis set in, hitting a recent bottom of $19.93 on March 23. The stock has since recovered somewhat, closing at today at $21.98.
On March 27, the company announced it would waive fees for its “Internet for Good” program for two months, giving customers enrolled in the program access to high-speed Internet at no cost for 60 days.
“Reflecting Telus’s longstanding commitment to leveraging our technology, in combination with our culture of giving, to bridge social and economic digital divides, our team is working diligently — with their hearts and their hands — to keep our communities and customers connected throughout this unprecedented time in history,” said CEO Darren Entwistle. “By increasing our support for low-income Canadians through our Internet for Good program, we are helping families prioritize their well-being during this pandemic.”
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