The first 60 days of the year are always busy ones for investors. It’s the time of the year when investors are deciding whether to top up their Registered Retirement Savings Plans (RRSPs). The RRSP is the bedrock of the Canadian retirement landscape.
As such, it’s important for investors to make smart decisions. One of the best way to secure your future is to invest in high-quality, blue chip companies that pay a decent dividend. These aren’t flashy growth stocks. These are stocks that are safe and reliable with a long and storied history of rewarding shareholders.
One such stock is BCE Inc (TSX: BCE)(NYSE: BCE). BCE is Canada’s largest telecommunications company with a market cap of $50 billion. In fact, BCE is the 10th largest publicly-listed company in Canada.
Competitive advantage
As part of Canada’s telecommunications trio, it has a dominant share of Canada’s tech sector. Indeed, it’s estimated that Canada’s Top 3 account for 90% of the telecommunications market share. This scope and scale cannot be easily replicated.
The industry requires significant capital expenditures, and despite the government’s best efforts, a legitimate fourth player has yet to make a dent in the industry.
BCE is also the more diversified company of the Big Three. It operates and has a dominant market share in three main areas: wireless, wireline, and media. It continues to add wireless customers at an impressive pace and has the fastest internet in the country.
According to PC Mag, BCE is the country’s leading Internet Service Provider (ISP) with speeds that are approximately 30% faster than its closest competitor. This has enabled it to overtake Shaw Communications as the number 1 television provider in Canada. Whereas others have seen negative cable TV subscriber growth, BCE has posted positive subscriber growth over the past five years.
This is a direct result of its fiber-to-home rollout, which has been an unmitigated success. It also leaves the company better positioned for a transition to 5G, which is expected to require significant fiber capacity.
Top dividend stock
BCE is also a very attractive income play. Recent share price weakness has led to a yield above 5%, near the high end of its historical average. The company is a Canadian Dividend Aristocrat, which makes it one of the more reliable dividend growth stocks in the country.
It has a 10-year dividend growth streak and has grown dividends by 10% on average since its growth streak began. It has more than doubled its annualized dividend since 2008. Although growth has slowed in recent years, it has raised dividends by approximately 5% of the past one-, three- and five-year time frames.
Foolish takeaway
Don’t take unnecessary risks with your retirement. Whether you’re just starting our or nearing retirement, companies like BCE should make up the foundation of your portfolio.
