Growth stocks took a beating in recent months, but some top Canadian dividend plays with tech exposure continue to perform well and offer decent upside opportunities as their tech initiatives expand.
Power Corp
Power Corp (TSX: POW) is a holding company with the core of its investments focused on Canadian insurance and wealth management businesses. It is a majority owner of Great-West Lifeco and IGM Financial. These companies generate strong revenue and cash flow to support above-average dividends that flow through to Power Corp and its shareholders.
Power Corp reported record adjusted net earnings for 2021. The board raised the dividend by 10.6% late last year and is buying back up to 30 million common shares under the new share-repurchase program.
At the time of writing, Power Corp offers a solid 5.1% yield.
Power Corp also has venture capital groups under its umbrella that have made some interesting investments in recent years that are already growing at a rapid pace and/or have the potential to be significant drivers of value appreciation in the coming years.
Power Corp, through its various subsidiaries, is a significant owner of Wealthsimple, the Canadian fintech firm that is disrupting the domestic financial industry. It also has a large position in electric bus maker Lion Electric.
The Wealthsimple stake was valued at $2.1 billion in the May 2021 investment round. Lion Electric’s share price is down significantly over the past year, but the firm still has a market capitalization of $1.9 billion.
As of December 31, Power Corp estimated its net asset value to be $52.60 per share. That’s significantly higher than the current share price near $38.50.
Telus
Telus (TSX: T)(NYSE: TU) is best known to investors as Canada’s second-largest communications company providing mobile, internet, and TV service to customers across the country.
Telus generates strong revenue and cash flow to support its attractive and growing dividend. The board raised the payout more than 20 times since 2011. Solid dividend growth is expected to continue, as heavy investments in the 5G network and new fibre optic lines drive revenue expansion opportunities.
Telus stock is viewed as a defensive pick that investors can hold as an anchor position in their portfolios for decades. The company avoided the temptation to spend billions of dollars on media assets and has instead focused on some innovative tech investments that are growing at a fast pace.
TELUS Health is a leading provider of digital healthcare services to doctors, hospitals, and insurance companies. The group saw its online offerings jump in popularity in the past two years and the shift to virtual healthcare is expected to continue. TELUS Agriculture is using technology to help Canadian farmers make their businesses more efficient. Revenue growth topped 10% in both subsidiaries in 2021.
Telus has a history of growing projects into large businesses. It spun off Telus International in early 2021. That company has a market cap of $8 billion.
Telus currently trades near its all-time high and provides a 3.9% dividend yield.
The bottom line on top growth stocks
Power Corp and Telus might not be the first names that come up when investors consider growth stocks for their portfolios, but these top dividend payers offer good upside exposure to new tech plays while still providing solid and reliable income along the way.
