2 TSX Dividend Stocks With Seriously Huge Payouts

The TSX telecom sector has some great high-yielding companies up for grabs.

| More on:
Profit dial turned up to maximum

Image source: Getty Images

If you’re new to the world of investing and are seeking a solid starting point, the telecommunications sector within the TSX might be an excellent place to begin. With its essential services and stable cash flows, this sector offers a relatively stable investment landscape thanks to its oligopolistic nature.

Today, we’ll be diving into two companies that not only provide essential communication services, but also boast attractive dividend yields, making them ideal options for beginners looking for a combination of steady income and long-term growth potential.

Telus Corporation

Telus (TSX:T) is one of Canada’s largest telecommunications companies, providing a wide range of communication products and services, including wireless, data, voice, and internet services. In recent years, the company also made forays into tele-health and cloud services.

For dividend investors, Telus remains a popular pick thanks to a high forward annual dividend yield of 5.23%. Over the trailing five years, Telus has paid an average dividend yield of 4.95%, which is higher than the TSX average and has remained stable since.

Environmental, social, and governance conscious investors will be please to know that Telus has a strong focus on environmental initiatives, including reducing its carbon footprint, increasing energy efficiency, and promoting the use of renewable energy, earning a spot on the Dow Jones Sustainability World Index for several years.

BCE Inc.

Telus’s biggest competitor is BCE (TSX:BCE), which also provides a wide array of communication solutions, including wireless, broadband, television, and home phone services. However, BCE has diversified further into media, which includes television, radio, and sports entertainment.

Currently, BCE owns CTV, Canada’s largest private broadcaster, and has strong presence in sports entertainment through its ownership stake in Maple Leaf Sports & Entertainment, which owns prominent sports teams like the Toronto Maple Leafs and the Toronto Raptors.

Stock-wise, BCE pays one of the highest dividends on the TSX, with a forward annual yield of 6.45%. Historically, the stock has recorded a five-year average dividend yield of 5.51%. Low-volatility investors will also like BCE’s low five-year monthly beta of 0.48 — a sign of it being half as volatile as the market.

The Foolish takeaway

Both Telus and BCE are solid dividend stocks, but they share a common weakness: idiosyncratic risk from the telecom sector. Factors like rising interest rates or government legislation could severely weaken the outlook for this sector. In addition, sinking your portfolio in just two companies isn’t the best idea. To diversify further, consider adding more dividend stocks from other TSX sector (and the Fool has some excellent picks for those below!)

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 Tony Dong has no position in any of the stocks mentioned. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

More on Dividend Stocks

money cash dividends
Dividend Stocks

This 8.39% Dividend Stock Can Pay $100 Cash Every Month

Consider investing in this monthly dividend stock at current levels to lock in high-yielding monthly distributions to create a good…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

Here’s the Average TFSA Balance in 2024

The Bank of Montreal (TSX:BMO) says that the average TFSA balance is $41,510, far below the maximum.

Read more »

A glass jar resting on its side with Canadian banknotes and change inside.
Dividend Stocks

Investors: Here’s How to Make $1,000 Each Month in Retirement

Here's how you can easily make $1,000 in monthly passive income in retirement in Canada, without taking on too much…

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer TSX Stocks I’d Buy Right Now Without Hesitation

Three TSX stocks that continue to overcome massive headwinds and beat the market are no-brainer buys right now.

Read more »

calculate and analyze stock
Dividend Stocks

TFSA Investors: 2 Top TSX Dividend Stocks to Buy on a Dip and Hold Forever

These top TSX dividend stocks now offer attractive yields and big potential capital gains.

Read more »

grow money, wealth build
Dividend Stocks

1 Dividend Stock to Buy for Growth and Stay for a 5.5% Yield

This dividend stock has been rising higher, but more could certainly be on the way. Now is the time to…

Read more »

A worker uses a double monitor computer screen in an office.
Dividend Stocks

2 Affordable Passive-Income Stocks That Pay Monthly

Are you looking for some passive-income stocks to build a recurring income stream? Here are two great options you can…

Read more »

woman data analyze
Dividend Stocks

Magna International Is Starting to Get Ridiculously Oversold

An undervalued stock with strong fundamentals and visible growth potential is a screaming buy for long-term gains.

Read more »