But it’s not too late to invest in Canada’s second-largest telecommunications company and the telecom champion in Western Canada.
Investors are anticipating price growth consistent with the telecom giant’s income growth in the years ahead. Telus is also a defensive stock, so it’s practically recession-free. Profit margins will remain high given that the wireless business in Canada is an oligopoly.
Start building your wealth
Telus is one of the best stocks you can put your money in right now. The price is no longer cheap. You can wait for a pullback before taking a position. However, regardless of the timing, you can expect the dividend to grow. If you own shares today, you’ll have the new income to start building wealth.
The stock has been a great dividend play for the last 18 years. The company did a remarkable job of growing the business within that period.
Free cash flow is forecast to double over the next three years. The price of this Canadian telecom is close to the 52-week high of $51.22 and could be on the way to a new high.
The telecom’s multi-year dividend-growth model is the salient feature, and you don’t want to miss out on the robust shareholder returns. Thus, I wouldn’t mind the posh price today.
In the recent earnings season, management has avowed a 7 to 10% dividend growth over the next three years. The current dividend yield is 4.51% with a payout ratio of less than 80%. You can already project your total return to be pretty fantastic.
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For the future millionaire
Investing in Telus is the sweetest deal you can find on the TSX. The company has a captured market on the west coast of Canada, whose provinces are among the wealthiest in Canada.
Revenue has been steady in the last three years, with a 5.59% average growth. As to the operating income for the 12-months ending March 31, 2019, Telus posted an 8.17% increase year-over-year. Net profit margin stood at 11.15%.
Telus possesses the financial strength and will be stronger when the company switches to a more efficient 5G network. There is a commitment to keep the customers connected with the utilization of the best of technology.
Because of operational efficiency and exceptional customer service, Telus has gained powerhouse status. The customer base and subscriber connection continue to grow, which should drive profitability.
If customers are willing to stick to Telus for years, more investors will buy and hold the stock.
Telus is heading into the future with world-class networks, a customer-first attitude, and shareholder-friendly initiatives. Meanwhile, would-be investors pressing forward to become millionaires will realize their goals.
A top-of-the-line investment should have a proven growth strategy, technology leadership, and a strong financial profile. Telus has all those qualities to make you a genuine baron in the future.
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.