VANCOUVER — Telus Corp. (T.TO) is raising its quarterly dividend and extending its payout program as it targets annual growth of seven to 10 per cent through 2022.

The telecommunications company will now pay a quarterly dividend of 56.25 cents per share, up 3.2 per cent from 54.5 cents per share.

The third and latest extension to its dividend program reflects Telus's confidence in future market opportunities, CEO Darren Entwistle said Thursday in a conference call with analysts.

"This range will enable Telus to continue to make the strategic investment necessary in our advanced broadband network and quality customer growth that underpin our ongoing profitability and significant free cash flow expansion," he said.

Vancouver-based Telus said effective the start of 2020 it will calculate its dividend payout on 60 to 75 per cent of free cash flow.

"We set the target to be aligned with our free cash flow projections, and we will be in it right out of the gate," added chief financial officer Doug French.
Entwistle added that the company didn't make this commitment lightly and modelled a number of scenarios about what the future will look like, including contingencies, investments and exogenous events.

Analysts welcomed the dividend changes.

"We view this dividend growth range as strong given it leads all other Canadian large-cap telecom companies," wrote Maher Yaghi of Desjardins Capital Markets.

The extended dividend policy was announced after Telus reported a first-quarter profit of $437 million, up from $412 million a year ago.

The profit for the quarter amounted to 71 cents per share for the quarter ended March 31, up from 69 cents per share a year ago.

Operating revenue totalled nearly $3.51 billion, up from nearly $3.38 billion in the first quarter of 2018, helped by higher wireless and wireline data services revenue growth.

On an adjusted basis, Telus said it earned 75 cents per share for the quarter, up from 73 cents per share a year ago.

Analysts on average had expected a profit of 75 cents per share and $3.51 billion in revenue, according to Thomson Reuters Eikon.

"This performance is clearly indicative of our ability to deliver on the targets that we've set for ourselves in 2019. Notably, we delivered industry-leading overall customer growth with combined wireless mobile phones and connected devices, Internet and TV customers additions, up 50 per cent over the last year," said Entwistle.