This Is the #1 Telecom Stock to Buy Now for Growth

An outperforming telecom stock, Shaw Communications Inc. (TSX:SJR.B)(NYSE:SJR) offers investors a substantial dividend, plus growth.

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Have you ever been left sitting around waiting for your dividend stocks to cough up their quarterly payments? While some utilities stocks and real estate investment trusts are known for paying their dividends month by month, they’re not the only sectors to do so. In other words, with just a few tweaks to your stock portfolio, you could be putting regular spending money in your wallet every four weeks.

Take Shaw Communications (TSX:SJR.B)(NYSE:SJR), for instance. Sure, some investors may turn their noses up at a telecom stock, what with the industry’s reputation for market saturation and low growth. However, Shaw Communications has a smaller regional focus than the majority of its peers; as such, it can offer income investors a monthly dividend that has the market width to grow as well as upside potential.

An all-weather dividend stock with plenty of space to expand

Operating largely in British Columbia and Alberta at the moment, with smaller operations in Saskatchewan, Manitoba, and northern Ontario, Shaw Communications doesn’t have the reach of a company like BCE, for instance. However, Shaw Communications is more established than some investors may realize. Anyone who has used Freedom Mobile, for instance, has used a Shaw Communications company.

Already paying a beefy dividend yield of 4.29%, Shaw Communications could be in a position fairly soon to reward its shareholders with even more. With a new generation of communications technology on the way, Shaw Communications is in the right place at the right time to become a leader in 5G infrastructure, given its takeover of the former Wind Mobile network.

Could Shaw Communications take a place alongside its competitors?

Whether it takes the initiative or not in this arena remains to be seen, but the potential is there to use this new era in communications tech to square up to the big-name market leaders. Indeed, it’s going to be a necessity, thanks to the ever-increasing amounts of data the public is starting to consume. Between content streaming and e-sports, data is going to be the next big commodity.

Indeed, investors are also in the right place at the right time, because this sector in particular may have what it takes to weather the trade tension storm that threatens to engulf the rest of 2019. As a stock that pays monthly dividends, Shaw Communications should slide nicely into a defensive investor’s tax-free savings account right about now.

Will Shaw Communications deliver the goods in the long run? At the moment, it is definitely a lesser company compared with the likes of BCE, TELUS, and Rogers Communications. However, what makes Shaw Communications such a compelling play is its status as a stock with room left to grow. For investors looking for a growing dividend or capital gains down the road, if that’s your style, this one looks like a winner.

The bottom line

An outperforming telecom stock, Shaw Communications offers investors a moderate, if not overly substantial dividend, plus the opportunity for potentially exponential growth. As a recession-ready stock, Shaw Communications looks like it has what it takes to go the distance.

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 Victoria Hetherington has no position in any of the stocks mentioned.

More on Dividend Stocks

Canadian stocks are rising
Dividend Stocks

3 Ways to Invest in Canadian Real Estate Under $20

Real estate can be a great way to make passive income, but you certainly don't have to invest a lot…

Read more »

grow dividends
Dividend Stocks

TFSA Wealth: 2 Oversold Canadian Stocks for a Retirement Fund

These top TSX divided stocks look attractive today for TFSA investors.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

Create $1,487 in Passive Income From a Top TSX Dividend and Growth Stock

This top growth stock on the TSX today could bring in almost $1,500 in passive income and triple your investment…

Read more »

Human Hand Placing A Coin On Increasing Coin Stacks In Front Of House
Dividend Stocks

Renters Will Rise in Number vs. Homebuyers in 2022

The greater majority of Canadian renters doubts their ability to purchase a home in 2022 due to surging inflation and…

Read more »

Man holding magnifying glass over a document
Dividend Stocks

West Fraser Stock: A Sneaky Growth Stock No One Talks About

West Fraser (TSX:WFG)(NYSE:WFG) stock has been a sneaky growth stock when it comes to its dividend.

Read more »

Dividend Stocks

Inflation Investing: 2 Top TSX Dividend Stocks to Buy Now

TFSA income investors can get dividend yields of better than 6% to help offset the impacts of high inflation.

Read more »

Canadian Dollars
Dividend Stocks

Got $1,000? Invest it in Real Estate

If you've got an extra $1,000, you should check out cheap REITs like Allied Properties (TSX:AP.UN) for juicy income.

Read more »

Community homes
Dividend Stocks

Real Estate: 2 Top Dividend Aristocrats to Own Today

The recent correction in the real estate sector has made several real estate stocks like these two attractive to income-seeking…

Read more »