Stability. It should be the first thing that comes to mind when investors think of choosing new equities, exchange-traded funds, or any other investment. You don’t want excitement. Leave that for the Black Jack table. Instead, you want income that you know will continue to climb over the years. And you can get that with many a dividend stock.
That’s why today I’m going to focus in on one dividend stock that provides that stability in spades. You can create passive income that will last a lifetime, and start it off with an investment that yields a high 6.41%.
The dividend stock to consider
There are few industries that are as essential and strong as those related to the internet. The infrastructure needed to support all areas of internet use is still growing strong. And it’s why telecommunications companies are some of the best investments to be had right now.
That’s because not only are telecommunication companies already strong, that growing infrastructure means there’s even more growth coming down the line. And when it comes to growth and stability, there are few that rival BCE (TSX:BCE).
BCE stock is a perfect dividend stock within the telecom sector, as it boasts the largest market capitalization of the bunch. There is little competition in the Canadian market, which is certainly not great for the consumer. Lower competition can mean higher prices. However, you can at least make some of that back by investing in these large companies. And of them all, I’d consider BCE stock the best.
Growth and more to come
BCE stock has seen a massive amount of growth over the years. While some of this slowed during the pandemic, the telecom leader has since made up for the drop. This involved putting a pause on wireline infrastructure, which it has since remedied. Because of this move, it now offers the fastest 5G network in the country!
Yet again, there is certainly more room to grow and expand. While the company continues to expand its wireline operations, it’s also rolling out 5G+. And that’s only the recent internet speeds. It’s clear that telecoms are developing even faster networks, providing investors with more opportunities as the years go on.
And yet, shares of BCE stock are down 4% in the last year. It trades at 20.3 times earnings, which isn’t in value territory but is a fair price. Especially considering in the last decade shares are up 118% for a compound annual growth rate (CAGR) of 8.1%!
Create income that lasts
If you’re looking for a dividend stock that will stand the test of time, this is certainly one to consider. BCE stock has been growing its dividend year after year, becoming a Dividend Aristocrat in the process. In the last decade, its dividend has grown at a CAGR of 5.2%. And with that discount, you could bring in passive income that will only grow from here. Let’s see by how much from a $5,000 investment.
| Year | Shares Owned | Annual Dividend Per Share | Annual Dividend | After DRIP Value | Year End Shares Owned | Year End Stock Price | New Balance |
| 1 | 83 | C$3.78 | C$313.77 | C$5,333.59 | 87.32 | C$74.28 | C$6,486.43 |
| 2 | 87.32 | C$4.65 | C$406.03 | C$6,901.79 | 92.5 | C$80.32 | C$7,429.12 |
| 3 | 92.50 | C$4.89 | C$452.37 | C$7,891.92 | 97.82 | C$86.85 | C$8,495.91 |
| 4 | 97.82 | C$5.14 | C$503.22 | C$9,010.42 | 103.3 | C$93.91 | C$9,701.14 |
| 5 | 103.30 | C$5.41 | C$558.93 | C$10,272.26 | 108.93 | C$101.54 | C$11,060.96 |
| 6 | 108.93 | C$5.69 | C$619.89 | C$11,694.00 | 114.69 | C$109.80 | C$12,593.26 |
| 7 | 114.69 | C$5.99 | C$686.51 | C$13,293.93 | 120.59 | C$118.73 | C$14,317.77 |
| 8 | 120.59 | C$6.30 | C$759.23 | C$15,092.22 | 126.63 | C$128.38 | C$16,256.26 |
| 9 | 126.63 | C$6.62 | C$838.50 | C$17,111.12 | 132.78 | C$138.82 | C$18,432.75 |
| 10 | 132.78 | C$6.96 | C$924.83 | C$19,375.12 | 139.06 | C$150.10 | C$20,873.71 |
| 11 | 139.06 | C$7.33 | C$1,018.72 | C$21,911.23 | 145.46 | C$162.31 | C$23,608.26 |
| 12 | 145.46 | C$7.71 | C$1,120.75 | C$24,749.12 | 151.96 | C$175.50 | C$26,668.47 |
| 13 | 151.96 | C$8.10 | C$1,231.48 | C$27,921.44 | 158.56 | C$189.77 | C$30,089.59 |
| 14 | 158.56 | C$8.52 | C$1,351.56 | C$31,464.08 | 165.26 | C$205.20 | C$33,910.37 |
| 15 | 165.26 | C$8.97 | C$1,481.62 | C$35,416.44 | 172.04 | C$221.88 | C$38,173.35 |
| 16 | 172.04 | C$9.43 | C$1,622.38 | C$39,821.77 | 178.92 | C$239.92 | C$42,925.27 |
| 17 | 178.92 | C$9.92 | C$1,774.56 | C$44,727.53 | 185.86 | C$259.42 | C$48,217.36 |
| 18 | 185.86 | C$10.43 | C$1,938.96 | C$50,185.75 | 192.88 | C$280.52 | C$54,105.82 |
| 19 | 192.88 | C$10.97 | C$2,116.40 | C$56,253.47 | 199.96 | C$303.32 | C$60,652.27 |
| 20 | 199.96 | C$11.54 | C$2,307.74 | C$62,993.15 | 207.1 | C$327.98 | C$67,924.18 |
As you can see, just a small $5,000 investment in BCE stock could bring in passive income this year alone. And if you reinvest it over the years, that could turn into even more, lasting you a lifetime.
