There are TSX dividend stocks you can buy and hold for the rest of your life. The choices are mostly large, more mature companies — or blue-chip stocks, to be precise. Also, these reliable passive-income providers can help balance losses during downturns or elevated market volatility.
If I invest today, I plan to own BCE (TSX:BCE), Canada’s most dominant player in the communications services sector. This industry leader’s extensive dividend track record (since 1881) gives me the confidence to make it a lifetime holding. Moreover, industry experts forecast the Canadian telecom market to grow at a compound annual growth rate (CAGR) of 3.4% from 2023 to 2028.
In 2026 alone, 5G wireless would add US$40 billion to Canada’s gross domestic product and provide 250,000 full-time employees to the labour force. BCE is the lead facilities-based carrier in the accelerated 5G network rollout that would deliver tremendous economic and quality-of-life benefits to Canadians.
Dividend Aristocrat
As of this writing, BCE trades at $63.98 per share (+9.31% year to date) and pays a mouth-watering 6.03% dividend. However, my enchantment with this $58.36 billion telecom giant stems from its capacity to generate sustainable returns and consistent dividend growth. Thus far, the Dividend Aristocrat has raised its payout for 15 consecutive years.
A $49,904.40 position (780 shares) will produce $3,009.24 in passive income, translating to $752.31 every quarter. Assuming I won’t touch the dividends and reinvest them, my capital would grow to $89,885.76 in 10 years, $121,242.12 in 15 years, and $163,537.05 in 20 years. The power of compounding is at work when you reinvest dividends.
Key competitive advantages
BCE offers a wide range of telecommunications products and services, with Bell Wireline (50%), Bell Wireless (39%), and Bell Media (11%) contributing to revenues. With around 22 million subscribers and growing, BCE continues to scale and expand its service footprint.
Strategic partnerships include launching the first-time essential network services (Google Distributed Cloud Edge) in early 2022 with Google Cloud. In BCE’s 5G network, Bell and Amazon Web Solution (AWS) Wavelength developed a public multi-access edge computing (MEC) service to embed the latter’s computing and storage service. The collaboration with cloud corporations is ongoing.
The latest member of the BCE family is a Montreal-based provider of cloud-focused, managed, and professional services and workflow automation solutions for business clients. BCE acquired FX Innovation for its expertise and depth in cloud services.
Investment-grade credit profile
BCE boasts an investment-grade credit profile due to its solid financial foundation and healthy liquidity position. In the first quarter (Q1) of 2023, operating revenues increased 3.5% to $6 billion versus Q1 2022, although net earnings declined 15.6% year over year to $788 million.
Glen LeBlanc, chief financial officer of BCE and Bell Canada, was happy with the revenue growth during the quarter and a positive start to 2023. He said, “BCE’s fundamentals and competitive position remain as strong as ever. With financial results that were right on our internal plan for Q1.” This year, LeBlanc expects higher free cash flow (FCF) due to lower capital expenditures.
Core holding
I can build retirement wealth and secure my financial future with BCE as my core holding. Besides the rock-steady dividends, I have a defence against a potential market downturn.
