Are you looking to build a rock-solid retirement portfolio? If so, dividend investing might be your ticket to financial freedom. Among Canada’s reliable dividend payers, TELUS Corporation (TSX:T) is a name that often pops up on investors’ radars. Let’s dive into what kind of dividend payout earlier investors could expect from TELUS stock this year.
The power of dividend investing
Before crunching any numbers, let’s discuss why dividend investing is a smart move for your retirement strategy. When you invest in Canadian dividend-paying stocks, you’re not just betting on the stock price to go up. You’re also earning a steady stream of regular income along the way. It’s like planting a money tree that bears fruit year after year!
Over time, these dividend payments add up to significant amounts. You can reinvest them to buy more shares (hello, compound interest!), or use them as a passive income stream in retirement. Dividends can help you pay recurring bills, boost your travelling budgets, or help you gift your favourite grandkid with a special toy at Christmas. Either way, dividends can set you up for a more comfortable and happier financial future.
TELUS stock: A dividend dynamo
The Canadian telecommunications giant has been a favourite among dividend investors for years, and for good reason. TELUS stock is a dividend aristocrat with a track record of growing dividends for 20 consecutive years.
The company will soon conclude a 2022 dividend policy that targets raising dividends by 7% to 10% annually until 2025. Given declining interest rates, stable business performance, and sustained free cash flow generation, management may launch another multi-year dividend growth program in 2025.
For 2024, TELUS stock dividends should amount to $1.53 per share for investors who also received the January 2 payout. The company will pay its final quarterly dividend of $0.3891 per share on October 1, to shareholders of record by September 10. Total dividends receivable in 2024 may yield around 6.7% to 6.9% annually for investors who bought TELUS stock a year ago.
If you’re looking to buy shares for dividend income in 2025, your quarterly payouts could be much higher. Financial analysts expect TELUS to raise its dividend by 3.7% in November. Should this happen, investors may receive a more than $0.4 per share dividend by January 2025.
How much could you earn on TELUS stock?
Let’s say you invest $10,000 in TELUS stock this month. At the current share price, that would buy you about 439 full shares. Based on the current dividend rate of $0.3891, here’s what you could expect:
| Company | Recent Price | Investment Amount | Number of Shares | Dividend per Share | Total Payout | Frequency | Total Annual Dividend |
| TELUS Corp (TSX:T) | $22.75 | $10,000 | 439 | $0.3891 | $170.81 | Quarterly | $683.24 |
TELUS stock investors could earn over $680 in passive income annually from a $10,000 investment. If the company raises dividends to $0.4 per share or higher in November, the total annual dividend in 2025 could exceed $702 to yield more than 7% annually. As has become the company’s norm, payouts may increase again before mid-year 2025.
Reinvesting the dividends could compound your returns faster.
Recent developments: Potential for enhanced dividend growth
During the past 12 months, TELUS paid out about 83% of its free cash flow in dividends, an improvement from a comparable period in 2023. Although the dividend payout ratio was above management’s target range of 60% to 75%, the company believes it may achieve the target on a prospective basis – meaning the payout remains safe and well covered.
The recent news suggests that TELUS is cooking up some exciting plans that could boost its cash flow and enhance its dividend growth momentum. TELUS stock’s free cash flow generation could improve if management successfully unbundles the company’s urban real estate into a Real Estate Investment Trust (REIT) and successfully harvests and sells decommissioned copper wires as a commodity over the next few years.
Investor takeaway
Investing in dividend-paying stocks like TELUS can be a powerful way to build wealth for retirement. Not only do you have the potential for capital appreciation as the stock price rises, but you also get a steady stream of income that can compound over time. While dividends aren’t guaranteed, and stock prices can fluctuate, your future self will thank you for planting those dividend trees today!
