A stock market crash can’t scare shareholders of Telus (TSX:T)(NYSE:TU). Telus is one of Canada’s leading telecommunications giants. Its leading position in this defensive industry makes Telus a must-buy to protect us from any stock market weakness.
So, if you’re worried about a stock market crash, buy Telus stock. It is a recession-proof dividend stock that keeps on innovating and driving shareholder returns.
Telus stock provides investors with a safe and generous dividend
Telus stock is currently yielding 5%. Not only is Telus’s dividend extremely reliable, but it is also a dividend that keeps growing. In the last five years, Telus’s dividend has grown at a compound annual growth rate of 7.1%. Telus increased its dividend by an additional 7% in the latest quarter. All of this is in line with Telus’s stated plans for dividend increases. It highlights the predictability and stability of the business, which are key attributes to look for to shelter your money from a stock market crash.
Telus has had a pretty phenomenal month of November so far. Telus stock is up 9.4%. It is yielding 5%, and it has a bright future. The company continues to innovate in its Telus Health platform, which is digitizing Canada’s healthcare system, and in Telus International, which helps companies with their digital transformation.
Canadian government policies favour telecom companies like Telus
Broadband coverage in Canada is not as extensive as it should be. It leaves out some rural areas altogether. Other areas receive slow and spotty coverage. The “Connecting Canadians” program’s objective “is to provide at least 280,000 households in rural and remote regions of the country with high-speed, broadband internet access.” This way, “Canadians can make the most of the digital economy no matter where they live.”
Isn’t it nice to witness an industry that has the government’s backing? After years of following Canada’s oil and gas industry, some of us might have forgotten what that feels like. So, here we are. With the help and support of the government, telecom companies like Telus can continue to expand their reach.
A stock market crash can’t stop this defensive stock
Sure, Telus stock will fall in the event of a stock market crash. But when this happens, we can rest assured that it will be temporary. A crashing market will take all stocks with it. Even the most defensive and well-capitalized stocks will fall. This doesn’t mean that it is a reflection of reality or changing fundamentals. It is why any weakness in Telus stock should be viewed as a buying opportunity. Fear takes down all stocks, and this would be a chance to buy the great ones like Telus at a discount.
Because many tailwinds are pushing Telus stock higher in the long term. The telecom business is an essential business. It keeps people and societies connected and it drives commerce. This was always true. In today’s pandemic world, it is even more accurate. A new digital e-commerce world is emerging and even replacing the old economy. In the pandemic, the digital world has often been our only source of connection. This secular growth will continue.
Motley Fool: The bottom line
Telus stock is a strong buy if you fear a market crash is coming. Although it will fall with the market in a crash, we can rest assured that it would be a temporary fall. Telus would emerge strong, as it is an essential business that is leading the way in our digital transformation. In the meantime, investors receive a guaranteed 5% dividend yield.
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Fool contributor Karen Thomas has no position in any of the stocks mentioned.