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TELUS Corp (TU - Analyst Report) recently reported its fourth consecutive positive earnings surprise. Its wireless division continues to be its main driver of growth.

Analysts have been revising their estimates higher over the last several months as TELUS continues to outperform expectations. The stock also pays a dividend that yields a juicy 4.6%.

Shares are cheap too, trading with a PEG ratio of 0.85.

Estimates Rising

Management reiterated its guidance for 2011 following a solid Q4 performance.

Estimates have been moving higher over the last several months as analysts have been encouraged by continued wireless subscriber growth:

TU: TELUS Corp

It is a Zacks #2 Rank (Buy) stock.

The Zacks Consensus Estimate for 2011 is $3.74, representing 14% growth over 2011 EPS. The 2012 estimate is currently $4.05, equating to 8% growth.

Solid Fourth Quarter Results

Fourth quarter earnings per share came in at 77 cents per share, beating the Zacks Consensus Estimate by 72 cents.

Operating revenues were up 4.4% year-over-year driven by a 9.2% increase in wireless revenues. The wireless subscriber base grew 6.9%. Revenues in the wireline segment decreased slightly.

Meanwhile, operating income surged 16.1% as the company was able to leverage its fixed expenses. Operating cash flow was up 11.5% year-over-year.

Returning Value to Shareholders

TELUS pays a dividend that yields an impressive 4.6%. The company's current payout ratio of 63% is within its target of 55% to 65%. As long as the company continues to grow its earnings and produce strong cash flow, more dividend increases will be on the way.

Attractive Valuation

The stock is attractively priced at 12.4x forward earnings, a discount to the industry average of 13.5x. It sports a PEG ratio of just 0.85.

Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.

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