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Forget Penny Stocks! These 2 High-Yield Dividend Stocks Are Better Buys

I know and understand that investing in penny stocks can induce a kind of adrenaline rush that no other asset class can. Penny stocks can climb up to 100% within a single trade session. Stocks from those companies are also as likely to slump just as hard.

Penny stocks offer massive upside but even more significant potential losses. The shares are riddled with bad news, like shady reverse mergers, pump-and-dump schemes, and straight-up scams. If you are looking to take home massive earnings through your investments, I can tell you about much better ways.

High-yield dividend stocks are a great way to make your money work for you. Stocks like Telus (TSX:T)(NYSE:TU) and Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) might not offer you astronomical returns in a short time. The dividend-paying stocks do, however, provide you with a reliable means of earning a passive income from your investments.

I will discuss both of the high-dividend-yield stocks, so you can see why the companies may be better considerations for your investments than risky penny stocks.

Telus

Telus is a leading company when it comes to the communications sector in Canada. The company has a world-class telecommunications network. Telus offers Canadian customers wireless and wireline internet connection, TV services, and mobile network services, among many other products.

The company has even begun a health venture, where it caters to the Canadian healthcare sector through digital solutions. Telus Health is already one of the top providers for Canadian healthcare’s digitized solutions.

Telus is also a company with an excellent reputation among investors for its reliable dividends. The stock does not offer anything remarkable when it comes to capital gains. The share price for the company increased by just 15.27% over the past five years. The company makes up for it through a juicy dividend yield of 4.67%.

In its most recent quarterly results, Telus reported an increase of dividend payouts from $0.5625 to $0.5825 per share every quarter. The company is paying its shareholders well, and it continues to keep them happy.

Bank of Nova Scotia

Canada’s banking sector enjoys a longstanding reputation for being reliable. With a market capitalization of $92.51 billion, BNS is the third-largest bank among Canada’s Big Five banks. Better known as Scotiabank, BNS is a bank with a diversified global presence.

The bank’s operations in Latin America effectively shield it from the effects of market downturns in domestic operations — something vital in helping the bank retain its reliable reputation. The better the bank performs, the happier it can make its shareholders.

Speaking of making shareholders happy, Scotiabank pays investors dividends at an impressive yield of 4.75% every quarter.

BNS consistently keeps increasing its dividends at least twice a year. The last dividend payout to shareholders was $0.90 per share in September 2019 — an increase of 3.4% from its previous dividend payout of $0.97 per share every quarter.

Foolish takeaway

Rather than risking your hard-earned money by throwing it at speculative opportunities offered by penny stocks, I feel that Telus and Scotiabank stocks are safer, yet robust options to help you to accumulate enormous wealth.

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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA.

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