Shopify vs Telus: Which is a Better Buy?

Is it right to compare a dividend stock like Telus Corporation (TSX:T) with a growth stock like Shopify (TSX:SHOP)? One is trading near its 10-year low, and the other is closer to its all-time high. My reason for combining the two stocks is capital appreciation.

Outlook for Shopify in 2026

Shopify’s flywheel model has picked up momentum. It reported better-than-expected revenue growth of 32% year-over-year (YoY) in the third quarter of 2025. It also witnessed another record-breaking Black Friday-Cyber Monday sales of $14.6 billion, up 27% YoY. All this encouraged Shopify to increase its fourth-quarter revenue growth expectation to mid-to-high twenties.

The fourth quarter is seasonally strong, and the first week of February is the time when the share reaches its seasonal peak. The stock has surged 20% and above between mid-October and the first week of February in eight out of the last 10 years. The only two years the stock actually fell in February were in 2016, when the oil crisis hit, and 2022, when the interest rate hike triggered a tech meltdown.

Although the Venezuela oil crisis has shocked the oil market, oil prices have not dipped significantly as they did in 2016. Shopify may be at its highest valuations, with a 115 times price-to-earnings (P/E) ratio, but it still has room for a 15–20% rally in the run-up to its quarterly earnings on February 11. This run-up has nothing to do with valuations and more with trading momentum that picks up around the earnings release.

Does this make Shopify stock a buy at the current price? I would not buy now, as the 15–20% rally is again a 50:50 probability given the current market uncertainty. The risk is higher than the reward. However, if you already own the stock, it might be a good time to sell and buy again in the March-April seasonal dip. The stock is well-positioned to continue growing by 40–50% in 2026, driven by Shopify’s international growth.

Outlook for Telus in 2026

Telus will continue to enjoy stable cash flow from mobile subscriptions. This year could be a year of recovery for Telus’ share price as the management looks to reduce leverage.

Telus stock has been in a downtrend since April 2022 due to high debt and slim margins from regulatory changes. The company even paused dividend growth as the falling share price inflated the dividend yield to 8.8%. Such a high yield is sufficiently rewarding shareholders for the business risks. A $5,000 investment can earn you $443.60 in annual dividend income.

The Telus share price could return to $25 as the leverage ratio decreases from 3.3 times to the target range of 2.2–2.7 times. In this process, the company will undergo restructuring and may cut dividends if there are delays in debt repayment and the realization of free cash flow growth.

If there is a dividend cut, the share price could rally faster. If there is no dividend cut, you can lock in a high yield for the long term.

Shopify or Telus: Which is a better buy?

Shopify is a stock to buy on the dip in March when the seasonal weakness reflects in the share price. Telus is a buy now, as it is already trading at its 10-year low and is at the point of share price recovery. There is a reasonable probability of a dividend cut, but the risk-reward ratio is favourable.

The post Shopify vs Telus: Which is a Better Buy? appeared first on The Motley Fool Canada.

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More reading

• 5 Canadian Stocks to Buy and Hold for the Next Five Years
• If You Want a Million-Dollar TFSA, You’ll Likely Need These Stocks In It
• 3 High-Yield Dividend Stocks Perfect for TFSA Contributions in 2026
• It’s a Whopping 8.8%, but Is Telus’s Dividend Safe?
• Telus Stock vs. Fortis: Which Dividend Giant Wins in 2026?

The Motley Fool has positions in and recommends Shopify. 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.