Investing $25,000 Into This 1 Stock Can Earn You $100/Month in Dividends

Shaw Communications (TSX:SJR.B)(NYSE:SJR) is a great stock to buy whether you want a good dividend or just need a safe stock to hold during the pandemic.

| More on:
Various Canadian dollars in gray pants pocket

Image source: Getty Images

If you’re looking for a way to boost your cash flow, dividend stocks are a good way to accomplish that. However, many stocks that pay dividends do so on a quarterly basis. That may not line up well with your cash flow needs, and getting paid on a monthly basis may be preferable.

The good news is there are stocks that pay on a monthly basis. One in particular that looks like an attractive buy today is Shaw Communications (TSX:SJR.B)(NYSE:SJR).

Currently, Shaw pays a monthly dividend of $0.09875. On an annual basis, that’s good for an annual yield of about 5.2% per year. It’s a solid payout and it’s probably one of the safer ones out there. If you were to invest $25,000 into Shaw today, you’d earn a dividend totalling $1,300 annually.

With the company making payments every month, that means you’d get paid more than $108 every month. If you’ve got room inside of a Tax-Free Savings Account (TFSA) to make this investment, then that could also be income that you don’t have to pay any taxes on.

It’s rare to find monthly dividend stocks that aren’t real estate investment trusts (REITs), which is why Shaw stands out among its peers. Not only does it pay a high dividend, but its payments are also more frequent than most and it’s a great way to diversify outside of just REITs.

The stock could be a solid buy during the COVID-19 pandemic

While there are many stocks investors should avoid during the pandemic, Shaw isn’t one of them. The company offers mobile and internet services, and demand should remain strong even during these difficult times.

In an update released in April, The telecom company said that it was seeing increased traffic on its network during the COVID-19 pandemic. But the company hasn’t come away completely unscathed. Shaw has temporarily laid off 10% of its staff, those working in retail and sales.

While it may see less sales growth this year, Shaw’s not a stock that normally sees a lot of change in its revenue; in its most recent quarter, the company reported sales growth of just 3.6% from the prior-year period.

Bottom line

Shares of Shaw are down around 14% in 2020 and now’s a great time to buy the stock, as it gives dividend investors the opportunity to lock-in a better yield than normal. The stock trades at a very reasonable 16 times its earnings and less than two times its book value.

It’s a good value investment, and with a monthly dividend, it’s an attractive buy that can help a variety of investors grow their portfolios.

Whether you’re a dividend investor or just looking for a stock to help you ride out the pandemic without incurring significant losses, Shaw’s a solid pick that stands among the leaders in the industry. While there may be limited growth for now, the company still has lots of potential, particularly with its Freedom Mobile brand.

With so much uncertainty in the economy and many businesses unable to operate at full capacity, Shaw’s stock can help offer some much-needed stability to any 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 David Jagielski has no position in any of the stocks mentioned.

More on Investing

Stock analysts were once excited about construction company Aecon as an investment.

Bull or Bear: Why Analysts Changed Their Tune on Aecon Stock

Analysts had been champing at the bit for the construction company, but the tides have turned.

Read more »

Specialty Brands faces higher raw materials costs.
Dividend Stocks

What’s Next for Premium Brands Stock?

Shares of the specialty food production and distribution company have fallen about 25% since last October.

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Dividend Stocks

2 Interesting Buys in Any Market

Here are two intriguing buys in any market climate that offer defensive appeal as well as growth and income earning…

Read more »

Bank sign on traditional europe building facade
Bank Stocks

Should You Buy Bank Stocks Now?

Canadian bank stocks are getting cheap. Is this the right time to buy?

Read more »

stock data
Stocks for Beginners

2 Reliable Stocks Beginners Can Buy Amid the Market Selloff

As the broader market turmoil continues, new investors can buy these two reliable dividend stocks to get good returns on…

Read more »

Biotech stocks can be good yet risky investments.

Is Bellus Health Stock Still a Buy After 30% Earnings Jump?

The biotech continues to make progress on obtaining FDA approval for its chronic-cough therapy.

Read more »

Dividend Stocks

TFSA Investors: 3 TSX Stocks for Tax-Free Passive Income

These Canadian corporations have strong visibility over future earnings and dividend payouts.

Read more »

Piggy bank next to a financial report

Do You Have Cash Sitting in Your TFSA? Now Is a Great Time to Buy Stocks

If you have cash in your TFSA that you're looking to invest, now is a great time to buy high-quality…

Read more »