2 Must-Own Stocks for Any Dividend Investor: Fortis Inc and Telus Corporation

Fortis Inc (TSX:FTS) and Telus Corporation (TSX:T)(NYSE:TU) have everything dividend investors should be looking for.

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If you’re a dividend investor, the Canadian stock market can be very tricky. Some stocks, particularly in the energy sector, offer fantastic yields, but their dividends may not be sustainable. Meanwhile, more secure dividends are in high demand, and there isn’t much to choose from.

But there are two companies in particular that offer dividend investors everything they should be looking for: Fortis Inc (TSX: FTS) and Telus Corporation (TSX: T)(NYSE: TU). Below we take a look at why.

Fortis Inc: perhaps Canada’s most reliable company

Fortis is Canada’s largest investor-owned distribution utility, and also one of Canada’s most stable companies in any industry. The main reason is simple: we all need to keep the lights on, even when the economy is faring poorly.

Fortis’ results back this up. Over the past 40+ years, the company has raised its dividend every single year. This is remarkable considering everything that has happened over those years, such as energy shocks, recessions, wars, and financial crises. But Fortis just keeps on ticking.

Remarkably, the company’s dividend yields a healthy 3.8%, thanks to a lagging stock price. So while Fortis may not be the most exciting investment in Canada (in fact, it may be the most boring), it offers a solid, growing dividend with a decent yield. What more could a dividend investor want?

Telus Corporation: Canada’s best-in-class telco

If you’re looking for strong, stable dividends, Canada’s big three telecommunications providers are a great feeding ground. They operate with limited competition, and high barriers to entry ensure this won’t change for a while. Better yet, they make money off of subscriptions. This makes revenue and earnings fairly predictable, perfect for paying out a big dividend. So there is an argument for holding all three in your portfolio.

But Telus in particular should be appealing to dividend investors. The biggest reason is simple: it has been doing a better job keeping its customers happy than its peers. And this is showing through in the company’s results.

To illustrate, Telus was voted Canada’s top full-service provider in the J.D. Power and Associates’ Wireless Total Ownership Experience Study. Customer complaints are down at Telus, while they’ve increased for the industry overall. As a result, Telus added more wireless subscribers than the other two providers combined. And fewer of Telus’ customers have been leaving. In fact, the lifetime revenue per customer for Telus reached $4,350 by the end of last year, again tops in the industry.

Best of all, Telus has been a dividend champion for years. Over the past decade, its dividend has gone up by a factor of five, and has been raised every single year. And like Fortis, the dividend yields close to 4%, not bad for such a strong operator.

So dividend investors can pick up a quality company, earn a decent dividend, and watch that payout steadily grow. You can’t ask for much more.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Benjamin Sinclair has no position in any stocks mentioned.

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