Just Released: 5 Top Stocks to Buy in April 2024 [PREMIUM PICKS]

Today’s historically high dividend yields of 6% to 9% just might be here to stay. Some payouts could even grow.

| More on:
a person searches for information on the internet

Source: Getty Images

Premium content from Motley Fool Stock Advisor Canada

It used to be that receiving a dividend yield that represented anything near the long-term historical average annual return from investing in stocks was a rare find. If you did find a yield that high, you could be reasonably sure the dividend was at serious risk, and more often than not, you weren’t going to receive that payout for long.

However, there are quite a few examples of yields floating around in the market today in the 6-9% range and, barring some unusual development, are likely to stick around. Some of them might even grow a bit, as I suspect the current 7% yield at this featured stock will.

Foolishly yours,
Nate Parmelee
Senior analyst, Stock Advisor Canada

“Best Buys Now” Pick #1:

Telus (TSX:T)

To be fair, the recent headlines about the communications industry aren’t great. That’s certainly weighing on Telus’s (TSX:T) share price. I also think there is a pretty good argument that, at this point, the sales opportunities for current technologies are close to saturated. But there will be new, faster wireless technology to sell in the future, and Telus generally ranks highly — or at least better than its competitors — on service with competitive pricing. So, this isn’t a business in decline.

Bears will say that Telus’s dividend is unsustainable because it’s so far beyond the company’s net income. This argument doesn’t hold any water for me, though. Dividends are paid with cash flow, and last year’s free cash flow amply covered the dividend. More importantly, capital spending at Telus is in decline now that its fibre network is built, which means higher free cash flow.  

In fact, I suspect Telus will raise its dividend this year. So, that 7% dividend yield that’s on offer now is likely to deliver a higher effective yield on today’s purchase price later this year. That is, of course, assuming the shares are bought while the share price is depressed.

“Best Buys Now” Pick #2


Want All 5 “Best Buy Now” Stocks? Enter your email address!

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 Nate Parmelee has positions in Telus. The Motley Fool recommends Telus. The Motley Fool has a disclosure policy.

More on Top TSX Stocks

You Should Know This
Top TSX Stocks

3 Things About Couche-Tard Stock Every Smart Investor Knows

Alimentation Couche-Tard (TSX:ATD) stock may sustain a growth trajectory in two ways. However, smart investors appreciate one growing risk.

Read more »

Solar panels and windmills
Top TSX Stocks

1 High-Yield Dividend Stock You Can Buy and Hold Forever

There are some stocks you can buy and hold forever. Here's one top pick that won't disappoint investors anytime soon.

Read more »

gas station, car, and 24-hour store
Stocks for Beginners

Should You Buy Alimentation Couche-Tard Stock?

The decision to buy Alimentation Couche-Tard stock isn’t as easy as it once was. Here’s a look at the case…

Read more »

edit Woman in skates works on laptop
Stocks for Beginners

3 Defensive TSX Stocks for Lower-Risk Investors

Looking for some of the best defensive TSX stocks to buy? Here's a trio of options that will appeal to…

Read more »

Index funds
Tech Stocks

Constellation Software Stock: Buy, Sell, or Hold?

Unveiling the Code: Should you Buy, Hold, or Sell Constellation Software (TSX:CSU) stock at current levels?

Read more »

Hourglass projecting a dollar sign as shadow
Top TSX Stocks

Just Released: 5 Top Stocks to Buy in March 2024 [PREMIUM PICKS]

Forget the hype. The best opportunity is in a sector the market is ignoring.

Read more »

TFSA and coins
Top TSX Stocks

5 Canadian Stocks to Buy and Hold Forever in Your TFSA 

Are you planning your TFSA portfolio for 2024? Here are a few stocks you can buy at the dip and…

Read more »

question marks written reminders tickets
Dividend Stocks

Better Buy: Loblaw Companies or Metro Stock?

Loblaw Companies (TSX:L) stock is riding on recent momentum. Meanwhile, Metro (TSX:MRU) is executing for future earnings growth.

Read more »