Investing in the stock market need not be a pressure-laden activity. All you need to do is select the publicly-listed companies that have growth potentials with sustained dividend payments. You can then rest easy and be a passive investor like most TFSA investors.
There are various investment choices to generate monthly passive income. But you can’t go wrong choosing industry pillars or pioneers such as Toronto Dominion Bank (TSX:TD)(NYSE:TD) and Telus Corporation (TSX:T)(NYSE:TU). Read on to know why you’ll have solid financial gains in the future when you own this pair of stocks today.
Canadian banks have always been treated with respect and gratitude. Toronto Dominion Bank is included in the esteemed list. TD is not a high-flyer, but it’s one of the best-income producing stocks on the TSX. You won’t see amazing spikes or frightening dips in the price movement, but always steady as it goes.
In spite of the lower-than-expected 10% earnings growth in 2018 that caused PE to go down, analysts see a brighter outlook. Many are predicting the bank’s earnings to be higher in 10 years. Thus, the current price of $76.42 is a reasonable entry point. The price appreciation can be 9% to 17% at best in the next 12 months.
TD is also not the highest dividend payer among the Big Five Banks in Canada. However, this $140 billion bank has the biggest dividend growth prospects. Long-term investors buy the stock, hold on to them, and let the 4.0% dividend yield compound.
Toronto Dominion Bank is best paired with Telus Corporation if you want to have a dynamic duo in your stock portfolio. There are only a handful of players in the telecommunications industry and Telus is part of the oligopoly. The company is proving that technology is the great equalizer.
Telus’ accumulated investment in technology, as 2000 has topped $175 billion already. The company’s noble objective is to bridge geographic and socio-economic divides in Canada. About 40% of the nation’s low-income families and the majority of the population have consistent internet access, thanks to Telus.
Investors are generally satisfied with the stock performance this year. The ups and downs are nothing out of the ordinary. The stock is currently trading at $49.24 at writing and approaching its 52-week high of $50.61. Analysts see the price hitting the $60 mark very soon.
TELUS is also an ideal stock investment for the long-haul because of its 4.4% dividend yield. A dividend growth program is in place and is targeting between 7% and 10% annual growth rate through 2019. In 2018, there were two dividend increases. Since 2014, the company has paid $11 billion in dividends.
Toronto Dominion Bank and Telus Corporation are symbols of stability. Both businesses can endure economic downturns. You’re still assured of income and growth during times of earnings volatility. No stock combination can be as invincible as this one. With only two stocks, you’ve already constructed a diversified and high-yielding portfolio.
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 Christopher Liew has no position in any of the stocks mentioned.