Consistent, dedicated savings today is easier said than done, but it’s the only way to attain self-sufficiency tomorrow when you retire. However, making investments using unspent or saved money must follow to ensure comfortable living in retirement.
The results of a Healthcare of Ontario Pension Plan’s (HOOP) survey on retirement readiness are telling. About 59% of the poll respondents need more money for retirement. If you need to invest for retirement, buying dividend stocks is a smart and logical way to boost retirement funds.
TELUS (TSX:T) and CT REIT (TSX:CRT.UN) don’t pay the highest dividend yields, but the payout consistency should deliver greater returns over time. Also, you’ll have substantial retirement income when you include the Canada Pension Plan (CPP) and Old Age Security (OAS).
Dividend-growth program in place
Communication services are essential in the current information revolution. TELUS caters to a broad customer base (consumers and commercial enterprises) and offers a wide range of services, including telecommunications and business solutions.
The 5G stock is ideal for wealth-building because yearly customer growth leads to higher revenues and income. In the fourth quarter (Q4) of 2022 alone, the 301,000 customer additions were TELUS’s best Q4 on record. According to management, the 7.4% dividend hike in Q1 2023 was the 24th increase since May 2011.
If you invest today, the share price is $25.22 (-0.83% year to date), while the dividend yield is 5.77%. Assuming you have enough to purchase 1,500 shares ($37,830), the money will grow to $89,337.33 in 15 years. The example illustrates the power of compounding when you keep reinvesting the dividends from TELUS.
Its vice-president and chief financial officer Doug French said, “Our leading growth profile and robust balance sheet position support our well-established dividend growth program.” He added that TELUS can deliver on its dividend-growth program and drive meaningful free cash flow (FCF) growth on a sustained basis.
The $36.5 billion telecommunications company takes pride in its highly differentiated and powerful asset mix that leans toward high-growth, technology-oriented verticals. For 2023, TELUS expects an 11-14% operating revenue growth and FCF of approximately $2 billion.
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Resilient fundamentals
CT REIT owns income-producing net lease retail properties across Canada. The $3.5 billion real estate investment trust pays monthly dividends and hasn’t missed a payout since October 2013. Its controlling unitholder and anchor tenant is Canadian Tire (TSX:CTC.A), an iconic and respected Canadian brand.
Management said the close association and alignment with an iconic and respected Canadian brand is a competitive differentiator. Besides acquisition and development opportunities, CT REIT is well positioned for solid growth due to long-term, escalating leases.
In Q1 2023, property revenue and net operating income (NOI) increased 4.2% and 4.5% year over year to $137.5 million and $107.4 million. Its president and chief executive officer Kevin Salsberg said the quarterly results reflect CT REIT’s resilient fundamentals and consistent growth. At $14.90 per share (-2.24% year to date), the dividend yield is 6.15%.
Inseparable tandem
Saving and investing go hand in hand, and the earlier you start, the better because you lessen the chances of a personal retirement crisis. If finances allow, consider buying shares of CT REIT first and then TELUS.
