A Canadian Dividend Stock That’s Ideal for Your Retirement Income

Here is why Telus Corporation (TSX:T)(NYSE:TU) stock is an ideal investment to earn growing retirement income.

| More on:
The Motley Fool

When you’re picking investments for your retirement portfolio, one of the most important elements to consider is that your investment should be long term and produce steady returns during your golden years.

That’s why having some top-quality dividend-paying stocks in your portfolio mix is a good strategy. There is little doubt that GICs, government bonds, and other safe-haven assets offer safety. Realistically speaking, however, when the interest rates are too low and inflation remains subdued, these fixed-income assets don’t fulfill the needs of retired investors anymore because they don’t provide enough income to live.

If you want to have a decent return on your investment, then it’s not a bad idea to take some calculated risk and include some stocks with higher yields relative to bonds. You therefore should restrict your investments to those known for their stability, safety, and growing payouts.

With this theme in mind, I’ve chosen the following dividend stock for you to consider for your retirement portfolio.


Telus Corporation (TSX:T)(NYSE:TU) stock meets many criteria, making this one a good candidate for your retirement portfolio.

One of the three top telecom operators in Canada, Telus provides connectivity to its growing subscribers and collects monthly bills. Due to this certainty in their revenue model, many analysts call telecom providers great cash cows.

Its fourth-quarter earnings show Telus has a strong growth momentum. Telus added 121,000 wireless postpaid customers in the quarter — about 34,000 more than a year ago, as the operator spends heavily to attract more wireless subscribers amid fierce competition.

With a current dividend yield of 4.32%, Telus offers a good return to long-term income investors in an environment in which GICs and other fixed-income assets aren’t even paying half of that. The company pays a quarterly dividend of $0.505 a share, which translates into $2.02 per share annually. Telus is well on track for 2018, marking the 15th straight year in which it has hiked its annual dividend.

Telus is targeting 7-10% growth in its dividend each year through 2019. Given the company’s ability to generate more cash through its growing Canadian customer base, this target doesn’t appear to be too ambitious. Trading at $46.79 a share at the time writing, Telus stock remains one of the top dividend stocks, which I think is ideal for your retirement income.

The bottom line

Telus is but one example of a business that’s built to last and provide a steady stream of income. You can further broaden your search and look for companies with the dominant market positions and growing cash to distribute in payouts.

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 Haris Anwar has no position in Telus stock.

More on Dividend Stocks

A bull and bear face off.
Dividend Stocks

The 3 TSX Stocks to Buy Before a Long-Term Bull Market Begins to Build

The TSX may not go bullish for a while, even when the economy recovers from a recession, but investors should…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

TFSA Investors: Make $200 in Monthly Passive Income With This 1 TSX Dividend Stock

Here’s an attractive dividend stock TFSA investors can buy now to earn $200 in monthly passive income.

Read more »

A plant grows from coins.
Dividend Stocks

TFSA Investors: How to Create $40,000 in Returns and Passive Income in 30 Years

If you think you'll need just $40,000 in passive income per year in retirement, your TFSA can get you there…

Read more »

stock analysis
Dividend Stocks

Buy These TSX Dividend Shares Next Week

Are you looking for dividend stocks to add to your portfolio? Buy these picks next week!

Read more »

edit Safety First illustration
Dividend Stocks

3 of the Safest Dividend Stocks in Canada

These three dividend stocks are all high-quality companies with defensive operations, making them some of the safest investments in Canada.

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

3 Stocks to Anchor Your Portfolio in a Rocky Market

Three stocks are solid anchors in any portfolio today for their outperformance in a weak market and defiance of the…

Read more »

money cash dividends
Dividend Stocks

3 Solid Dividend Stocks That Cost Less Than $30

Given their solid financials and healthy cash flows, the following under-$30 dividend stocks are a good buy in this volatile…

Read more »

grow money, wealth build
Dividend Stocks

2 High-Yield Dividend Stocks With Rock-Solid Payout Ratios

These two dividend stocks offer unbelievably high yields of more than 7% and earn more than enough free cash flow…

Read more »