Last Call for High-Yielding Dividends: 2 Dividend Stocks to Buy Before Rates Fall in 2024

BCE (TSX:BCE) and another heavyweight telecom stock might be excellent holdings for income-seeking investors who want high-yielding quarterly payouts.

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In this day and age, the economy is making it impossible for most people to earn a worthwhile living through their primary revenue streams. Simply relying on savings alone to achieve long-term financial goals might not be enough.

Finding ways to generate more revenue through passive-income streams is becoming essential. Fortunately, stock market investing can help you make a passive income by putting your idle money to work for you.

One of the best approaches is identifying high-quality dividend stocks to add to your self-directed investment portfolio. A portfolio of dividend stocks with high-quality underlying businesses that pay shareholders a portion of profits through monthly or quarterly distributions can be an excellent passive-income stream.

When investing in dividend stocks, picking companies with reliable track records of dividends and the ability to continue supporting distributions is essential. To help you get a good start, we will look at two top-notch dividend stocks that offer higher-than-usual yielding dividends.

Telus

Telus (TSX:T) is a $35.82 billion market capitalization giant in the largely consolidated Canadian telecom industry.

Being one of the Big Three wireless service providers in Canada, it is a staple in many investor portfolios due to its reliable dividend payouts and long-term capital gains. The stock has raised its dividends for the last 20 years, making it clear why it is a top pick for income-seeking Canadian investors.

As of this writing, Telus stock trades for $24.62 per share. At these levels, it is down by around 28% from its April 2022 all-time high valuations.

The decline in its share prices can be attributed primarily to the series of aggressive interest rate hikes by central banks to cool inflation in Canada and the United States. The company relies on a heavy debt load to fund its capital projects, eating into its profits.

Despite the losses it suffered, Telus stock is expected to report adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of at least 7% for 2023.  It pays its shareholders their dividends at a juicy 6.11% dividend yield that you can lock into your portfolio today.

BCE

BCE (TSX:BCE) is also a major player in the Canadian telecom space, being the largest among the Big Three. It is a wireless and internet service provider and one of the leading providers of 5G infrastructure in the country.

The company also has a major media segment that further diversifies its revenue streams. With key interest rates rising, BCE stock also saw its share prices decline. However, it is another darling dividend stock for Canadian investors with an impressive track record.

BCE stock has grown its shareholder dividends for the last 15 years, making it a Canadian Dividend Aristocrat. As key interest rates fall this year, the lower interest expenses can send its share prices soaring.

As of this writing, it trades for $55.99 per share, down by around 23% from its April 2022 all-time high. At current levels, it pays its shareholders their dividends at a juicy 6.91% dividend yield that is too attractive to ignore.

Foolish takeaway

While it is too soon to say when share prices will begin soaring again, it can be any day now. The much-anticipated cuts in key interest rates by central banks in the U.S. and Canada can spur growth in economic activity. As bond yields fall, equity markets typically rally.

As of this writing, both telecom stocks trade at significantly discounted valuations from all-time highs. If you want to build solid foundations of a dividend income portfolio, now might be the right time to lock in the high-yielding dividends of these two top telecom stocks.

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

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