10 Years From Now, You’ll Be Glad You Bought These Magnificent TSX Dividend Stocks 

Time spent in the market is rewarding if the stocks in your portfolio have a strong business model and sound management. Investing in a business that stays relevant 10 years from now can give you strong returns through dividends or capital appreciation, or both.

Two magnificent dividend stocks you’ll be glad you bought today

Before discussing dividend stocks, these companies are facing business and economic challenges that have pulled down their stock price. These stocks may remain volatile in the short term. However, one should look at the company from a 10-year horizon.

Telus stock

Things have been tough for the telecom sector, as price competition reduced average revenue per share (ARPU). However, Telus Corporation (TSX: T) continued to grow its subscriber count and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).

If you look at the last two years and this year, the company’s fundamentals seem stretched. The telecom sector is capital-intensive, but Telus maintains certain financial ratios to manage debt. In the last two years, the telco has been investing in 5G infrastructure and spectrum licensing.

These investments increased its net debt to EBITDA ratio to 3.9 times in 2024, above the targeted 2.2 to 2.7 times, and dividend payout ratio to 80% from the targeted 60–75% range. Since the debt exceeded the target, it increased its liquidity to $2.9 billion from the general minimum of $1 billion. Higher liquidity will help Telus sustain lower earnings for a few years. Moreover, the company’s investments in business solutions, 5G, and other services could create opportunities to increase ARPU through bundled packs, while keeping capital spending low.

Now is a good time to buy Telus stock while it trades near its five-year low and lock in a 7.4% dividend yield. The management has delivered on its target to grow dividends by 7–10% annually till 2025. The company is restructuring its operations to reduce costs while increasing revenue to bring the debt to its targeted range.  

Despite the challenges, Telus is a magnificent dividend stock to hold because of its over 7% annual yield, dividend reinvestment plan (DRIP), and low stock price. It will continue to grow by 2030 as more 5G applications roll out.

TC Energy

TC Energy (TSX: TRP) is another magnificent dividend stock to own, especially after the spin-off of its liquid pipeline business South Bow. The pure-play gas pipeline business is growing at a faster rate as more projects come online. While the Trump tariffs raise short-term volatility around oil and gas exports, it is unlikely to create a significant dent in TC Energy’s cash flows.

In 2025, the company plans to allocate $5.5–6 billion of capital expenditure to U.S. Natural Gas pipeline projects, NGTL System expansions, the Southeast Gateway pipeline, and Bruce Power.

As new pipeline extensions come online, cash flow increases. TC Energy allocates a portion of this cash flow to service debt, fund new projects, and pay dividends.

While tariffs could lower transmission volumes in the short term, the volumes will increase when tariffs ease. Trust the process and the business model that has sustained some of the worst crises.

Unless the business model is no longer relevant or the world is no longer the same for North American pipeline companies, TC Energy could continue to pay dividends.

$10,000 invested in the above two dividend stocks 10 years ago

If you invested $10,000 in each of the two stocks in January 2015, you could have bought 477 shares of Telus at $20.94 per share and 180 shares of TC Energy at $55.34 per share. Since TC Energy introduced a DRIP in 2023, here’s how the non-DRIP dividend income has grown in these 10 years.