March has been bearish for the U.S., Mexico, and Canada stock markets as tariff concerns loom. The risk of recession is growing as tariffs could make everything expensive and North Americans battle inflation once again. While the short term will remain bearish, the market will revive in the medium term and reward those who bought the dip. Now is not a time to panic but to hunt for robins with strong fundamentals that can sustain demand weakness.
Three income stocks to buy in March 2025
I have identified three income stocks that are a buy in March 2025.
Telus stock
Telus Corporation (TSX:T) is a good stock to buy for its quarterly dividends and semi-annual dividend growth. The company has a slightly higher debt burden, but it is focused on reducing its debt and capital expenditures, which could improve its earnings and cash flows. Canada’s lower immigration targets could affect Telus’ new subscriber count. However, the 5G opportunity in business solutions, the Internet of Things, and other bundled packages could bring cost efficiencies and drive profits.
Every new technology upgrade in telecom infrastructure needs a few years to generate returns. The initial capital expenditure is high, but the infrastructure starts generating regular cash flows and opens up new opportunities. Telus and other telecom stocks have completed the initial years of 5G. Now it is time to monetize the infrastructure for years to come.
Taking a long-term view, the 5G infrastructure will facilitate artificial intelligence (AI) at the edge – robots, autonomous cars, smart cameras, traffic signals, digital billboards, and more. These will create more revenue-generating opportunities, allowing Telus to grow dividends for the next decade.
Now is a good time to buy the stock and lock in a 7.5% dividend yield.
Freehold Properties
Freehold Properties (TSX:FRU) is a good income stock in the current economic environment that favours oil drilling. Since Donald Trump became U.S. President, he has encouraged oil drilling activity in the United States. Even Canada has been increasing oil production after the ban on Russian oil.
Freehold Properties owns land where companies drill and extract crude oil, natural gas, natural gas liquids, and potash. These companies bear the risk and cost of drilling and maintaining oil wells and restoring the land to its original state. Freehold Properties earns royalty on the volume of oil produced and the price of oil. Thus, the company benefits in either scenario, when oil prices are high or when oil volumes are high.
The last four years have been bullish for the oil sector as oil prices increased significantly. Freehold Properties increased its dividends by 64.7%, 98%, and 11.3% in 2021, 2022, and 2023, respectively, when oil prices were high. A new opportunity comes as Trump allows more oil drilling, an activity that had been on a decline. This could once again boost royalty revenue and drive dividend growth.
Unlike Telus, Freehold may not be able to sustain dividend growth for the long term. Freehold could be considered an opportunistic buy to enjoy an 8.6% yield and strong double-digit dividend growth for the next few years.
goeasy stock
goeasy (TSX:GSY) is a good income and growth stock for growing its dividend by double digits. The non-prime lender operates in niche markets and has been expanding steadily. The Canadian government has reduced the maximum allowable rate of interest from 48% to 35%, effective January 1, 2025. This reduces the addressable consumers of sub-prime lenders. However, goeasy did not face a significant impact as it mainly caters to customers in the 35% interest range, with a few outliers whom it charges 41%.
goeasy expects its loan portfolio to grow by 17–24% to $5.4–5.7 billion in 2025 after considering the maximum interest rate. While new loans and revenue are expected to grow, it expects the loan portfolio yield to reduce to 31–32.5% in 2025 from the previous forecast of 31.3–33.3%. The interest proceeds are used to lend more, service debt, and pay dividends.
As the loan portfolio grows, interest earned grows, giving goeasy room to grow dividends. goeasy stock is a buy not for its 3.9% dividend yield but a 10-year average annual growth rate of 31.9%.
