The Motley Fool

TFSA Investors: 2 Canadian Dividend Stocks to Hold for Decades

Canadian investors are searching for reliable dividend stocks to own inside their Tax-Free Savings Accounts (TFSA).

Let’s take a look at Telus Corporation (TSX:T)(NYSE:TU) and TransCanada Corporation (TSX:TRP)(NYSE:TRP) to see why they might be interesting picks.


Telus is one of Canada’s top communications companies.

Critics of the stock say the lack of a media business will hurt Telus over the long term. Time will tell if that turns out to be the case, but Telus appears to be doing just fine without owning TV networks and sports teams.

The company posted strong Q1 2017 results with more than 75,000 net new customers signing up for mobile, internet, and TV services. Adjusted net income rose 5.6% in the quarter compared to Q1 2016, and free cash flow doubled to $217 million.

Telus works hard at keeping its customers happy, and the efforts are bearing fruit.

The company reported and industry-best postpaid wireless churn rate of just 0.93% in Q1, and the subscribers who stayed continue to spend more, as blended average revenue per user (ARPU) rose 3.9% to $65.53. That marks the 26th straight quarter of ARPU growth on a year-over-year basis.

Telus is expanding its reach and just picked up a large piece of the Manitoban mobile market as part of the BCE Inc. deal to acquire Manitoba Telecom Services.

In addition, Telus is investing in other areas of growth, including the healthcare sector. In fact, Telus Health is already a leader in providing digital solutions to doctors, hospitals, and insurance companies.

Telus has a long track record of dividend growth and recently raised the quarterly distribution to $0.4925 per share. That’s good for a yield of 4.3%.


TransCanada has recovered from the tough run it had in 2015 when energy prices tanked and President Obama rejected the company’s Keystone XL pipeline.

Investors who bought at the low are sitting on gains of close to 50%, and more upside might be on the way.


TransCanada purchased Columbia Pipeline last year in a deal that added strategic gas assets in the growing Marcellus and Utica gas plays as well as key pipeline infrastructure running from Appalachia to the Gulf Coast.

The addition of Columbia bumped up the near-term development portfolio to $23 billion. As the new assets are completed and go into service, TransCanada expects to see cash flow grow enough to support annual dividend increases of at least 8% through 2020.

Keystone is back in play, and investors could see an additional cash flow boost over the medium term if the pipeline actually gets built.

TransCanada’s current distribution provides a yield of 3.9%.

Is one more attractive?

Both stocks should be solid buy-and-hold dividend picks for a TFSA portfolio.

Telus offers a higher yield and tends to hold up well when the broader market hits a rough patch. If you want a more conservative pick, go with the communications company.

If you like the idea of getting strong U.S. exposure, TransCanada is the way to go, and the company probably offers better dividend-growth prospects over the medium term.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share. Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune. Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Fool contributor Andrew Walker has no position in any stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.