November 5, 2015 | In: Technology
Telus: A Great Example of a Company Where Shareholders Are Much More Important than Employees
Telus (TSE:T) has announced 2 very important news today: 1) It’s cutting 1,500 positions across Canada, and 2) It’ll give a dividend of 44 cents a share early January (up about 5% from last quarter’s dividend).
Let me do some analysis here…
Historically, Telus has always paid dividends to its stakeholders – almost every quarter. For this year (2015), Telus as paid $1.64 in dividends (if we’re counting December as part of this year). Next year’s combined dividends will amount to at least $1.76, an increase of 12 cents a share from this year. That doesn’t seem that much, considering the Canadian inflation and everything.
But, when Telus has 602.40 million shares, the increase of 12 cents a share amounts to about $72.3 million, which is more or less the same amount of money it would take to maintain 1,500 positions (assuming they are paying $50k/employee). Yes – I agree with you – that’s a very low move (ethically).
Ironically, Telus has dropped $1.80 today alone, which is slightly more than the total dividend that will be paid to its stakeholders next year. Not a very good omen!
Moving on to Telus’ performance as a stock, it isn’t that bad: it is experiencing record highs every few months ever since it completely recovered from the financial crisis back in 2013. However, considering that the stock is valued in Canadian Dollars, and that the CAD has dropped over 30% since 2013, then the stock’s current value in the world market is about USD $30, slightly less than the average stock price of $31 USD back in 2013. So, that’s not really a home run, especially when you take into consideration that the Canadian telecommunication market has been closed for the last decade under Harper’s Conservative government (by the way, I’m not taking a side here, I’m just stating facts) and was not open for any outside competitors. We’ll see if that changes under the new Liberal government, and if it does, expect Telus’ luck to run out quickly.