The past few years of high inflation have been hurting many Canadians. And though the rate is down quite a bit in recent quarters, the sting can still be felt when one ventures over to the local grocery store (the cost of chicken is quite absurd these days!). While it’s still hard for many in the workforce to get a raise, even after the surging prices of everyday living (rent, groceries, and all the sort), I’d argue that now represents a great time to give oneself a raise with passive income plays. In other words, if you’ve got the money to put to work, it’s time to go on a passive-income powerplay!
With interest rates on the higher end (at least relative to what many of us are familiar with), being a saver isn’t as unrewarding as it used to be, not with higher-interest TFSA (Tax-Free Savings Accounts), high-rate GICs (Guaranteed Investment Certificates), and bonds (and bond funds). You don’t need to take chances in the stock market to get a pretty good return.
Passive-income powerplay: Giving one a raise with dividend top dogs
That said, if you do decide to venture into high-yield dividend stocks, I’d argue there has never been a better time. With more clarity on where rates could go from here (rate cuts looming?), I’d argue that today’s generous yields may not last as a fair amount of capital appreciation begins to set in.
As rates fall, stocks may have the means to rise as some weight is lifted off their shoulders. And, as you may know, higher stock prices tend to accompany lower yields, all else being equal (not taking into account dividend hikes).
In this piece, we’ll check out one of the best high-yielding stocks that can give you a raise if you seek to supplement your income in the present. Additionally, the stock could be in for a good amount of capital gains over the coming years as management looks to move past a period of economic uncertainty.
Telus
Telus (TSX:T) is a telecom titan that’s starting to find its footing in recent quarters. Though you can score a larger yield and a lower multiple with one of Telus’s peers, I’d argue that shares of T provide a better mix of long-term growth and yield. Indeed, just because there’s a higher yielder out there doesn’t mean you should take it, as oftentimes higher yields (and harder-hit stocks) are cheaper for very good reasons.
At writing, Telus stock sports a 6.31% dividend yield. That’s a very generous payout that’s looking secure and quite well-covered by free cash flows, at least compared to some of its peers in the telecom industry.
With wireless gains continuing and the recent profit surge in the (latest) fourth quarter, I’d argue T stock is better primed for a rebound compared to most other companies that have taken a hit in the current environment. With a nice yield, a lack of a media business, and an intense focus on growing its wireless assets, Telus stands out as one of the top high-yield picks while it’s going for $23 and change.
