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Written by Puja Tayal at The Motley Fool Canada
The year 2025 is drawing to a close. The normalization in oil prices and trade uncertainty were the key trends triggering volatility, while the artificial intelligence (AI) trend triggered growth. What trends could shape 2026, and where can you find stability and passive income?
The year 2026 could see an uptick in AI solutions and debt reduction by companies that made aggressive capital investments as interest rate cuts ease. Telus Corporation (TSX:T) is a good investment from a passive income perspective. The telco has reduced its capital expenditure and is focused on reducing debt and increasing free cash flow.
Telus earns stable revenue from subscriptions and is looking for ways to benefit from the network sharing environment. In August, it agreed to sell a 49.9% equity interest in Terrion to investment group La Caisse for approximately $1.3 billion. Terrion will hold Telus’s cell towers and provide shared coverage to competitors, while Telus will control all active network components and security systems. The proceeds will help Telus reduce its debt while maintaining the reliability and superiority of network coverage.
Another major strategic move was the merger of Telus Digital Services Business to increase its bundled offerings and reduce costs. This will help it generate more revenue from customers. More such initiatives could unlock cash for Telus and help reduce debt and increase free cash flow.
Telus may not be a good growth stock as its stock price has been range-bound, hovering between $20 and $22. The entire telecom landscape has become challenging as a reduction in immigration targets and network sharing with competitors has limited the scope of growth. However, the regular distributable cash flows will continue to support dividend growth at a slower rate.
Telus has maintained a dividend payout ratio of 75% within its guided range. It has also increased its quarterly dividend per share by 4% year-over-year to $0.4184 per share, showing the management’s commitment to 3–8% dividend growth between 2026 and 2028.
The telecom industry headwinds have kept the stock price down while the management has increased dividends. This has increased its dividend yield to 8.2%. I do not expect any further dividend growth this year.
If you start investing $500 per month from November, 12 monthly investments could buy you 272 shares of Telus at an average share price of $21. Assuming four quarterly payments of $0.4184 per share, you will earn a total dividend of $286.19.
Month
Number of shares bought with $500
Total Shares
Quarterly Dividend
Total Dividend
Nov-25
25
Dec-25
22
Jan-26
23
70
$0.4184
$29.29
Feb-26
22
Mar-26
23
Apr-26
22
137
$0.4184
$57.32
May-26
23
Jun-26
22
Jul-26
23
205
$0.4184
$85.77
Aug-26
22
Sep-26
23
Oct-26
22
272
$0.4184
$113.80
Total
$1.6736
$286.19
Telus also offers you a dividend reinvestment plan (DRIP), wherein the total dividend you receive every quarter will be reinvested, and you will get more income-generating shares. The DRIP can compound your passive income.
If we add DRIP shares into the above quarterly dividends at the average price of $21 per share, the total share count at the end of October 2026 will be 281.6. Note that the DRIP gives fractional shares. Thus, your total dividends earned in 2026 would be $289.65.
Quarter
Total Shares
Quarterly Dividend
Total Dividend
DRIP Shares at $21 price
Q1
70
$0.4184
$29.29
1.3947
Q2
138.3947
$0.4184
$57.90
2.7573
Q3
207.7573
$0.4184
$86.93
4.1393
Q4
276.1393
$0.4184
$115.54
5.5017
277.5017
$289.65
If you invest in a DRIP and let it compound for 10–15 years, the passive income will grow significantly.
The post Invest $500 Per Month to Create $286 in Passive Income in 2026 appeared first on The Motley Fool Canada.
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The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned
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