If you’re looking for passive income that rolls in like clockwork, there’s one Canadian dividend stock I’d consider putting my entire Tax-Free Savings Account (TFSA) into. That’s TELUS (TSX:T). With a juicy yield hovering around 7%, it pays out dividends every quarter, and its consistency makes it feel like getting paid monthly. For long-term investors chasing income without the drama, TELUS is worth serious consideration.
Source: Getty Images
About TELUS
TELUS is one of Canada’s Big Three telecom providers. It handles wireless, internet, and TV services for millions of Canadians. While it might not sound exciting, that’s kind of the point. People need to stay connected no matter what’s happening in the economy. That gives TELUS the kind of stability investors love when building a reliable income stream.
As of writing, TELUS trades at around $22.55 per share. Its annual dividend is $1.66 per share, which gives it a forward yield of roughly 7.36%. That’s well above the TSX average. And this isn’t a risky company dangling a high yield to attract attention. TELUS paid and raised its dividend steadily for more than a decade. Even during the COVID crash and inflation spikes, it continued sending cash to shareholders.
The most recent earnings report came out in early May and showed TELUS still holding its ground despite a tough environment. The dividend stock brought in $5.06 billion in revenue for the first quarter of 2025. That’s up 3.8% year over year. Earnings per share (EPS) came in at $0.26, slightly ahead of analyst estimates. TELUS now has over 18 million customer connections across mobile, internet, security, and health platforms.
Branching out
While telecom is the core business, TELUS is branching out in smart ways. It’s investing heavily in TELUS Health and TELUS Agriculture & Consumer Goods, both of which have global potential. In fact, TELUS Health is now one of Canada’s largest digital health service providers, used by over 80,000 employers worldwide. The dividend stock sees this as a key growth engine and a way to reduce its reliance on traditional telecom.
Another reason I’d go all-in on TELUS in a TFSA is the nature of dividend taxation. Normally, dividends from Canadian companies are taxed at a favourable rate in a non-registered account, but inside a TFSA, they’re completely tax-free. That means if you put $50,000 into TELUS today, you’d collect about $3,264.34 per year in tax-free income without lifting a finger.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| TELUS | $22.50 | 2,222 | $1.47 | $3,264.34 | Quarterly | $49,995.00 |
Considerations
Some investors have been nervous about TELUS’s rising debt. The dividend stock has been spending billions on expanding its fibre optic network and rolling out 5G infrastructure. But it’s doing this to future-proof the business and keep customers satisfied. TELUS’s capital investments are high now, but over time, those investments should translate into higher margins and more stable cash flow.
Speaking of cash flow, TELUS generated over $3.1 billion in free cash flow in 2024. That’s important because it shows the dividend is well-supported. The dividend stock’s payout ratio was about 87% in 2024, which is a bit high but manageable considering the steady cash coming in from customers and the company’s long-term growth initiatives.
Right now, TELUS is planning to increase its dividend annually between 5% and 7% through at least 2026. That kind of transparency is rare. Most companies don’t give dividend growth guidance. TELUS does because it knows investors count on that income. It’s part of why I’d feel comfortable going all-in on this stock inside a TFSA.
Bottom line
For investors building a long-term, tax-free passive-income stream, TELUS checks all the boxes. It’s stable, it’s generous, and it’s aiming higher. That 7% yield looks especially appealing when you consider it comes from a dividend stock that keeps growing and innovating. If I could only pick one dividend stock for my TFSA right now, this would be it.
