When it comes to building a resilient income portfolio, dividend champions are a must-have. These are dividend stocks that have proven their strength by consistently raising their dividends year after year, even in the face of economic uncertainty. Their ability to maintain and grow payouts reflects their financial stability and ability to deliver sustainable earnings.
Against this background, here is a fundamentally strong dividend champion offering a high yield of about 7.6%. Its robust fundamentals, stable cash flows, and commitment to rewarding shareholders suggest that this TSX stock will continue increasing its dividend in the coming years.
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The 7.6% yield dividend champion
For investors seeking dividend champions, communications giant Telus (TSX:T) stands out for its high and sustainable yield, as well as a solid growth history. Since 2011, the company has increased its dividend 27 times under its semi-annual dividend-growth program. In total, it has paid out over $21 billion in dividends since 2004, a reflection of its financial strength and focus on returning significant cash to shareholders.
Currently, Telus pays a quarterly dividend of $0.4023 per share, which equates to a yield of 7.6%. This attractive yield is backed by a sustainable payout ratio of 60–75% of free cash flow, providing investors with confidence that the income stream is substantial and secure.
Looking ahead, Telus is leveraging its industry-leading broadband network to acquire and retain customers profitably. At the same time, efficiency improvements and a disciplined approach to expansion are driving earnings and cash flow growth. These dynamics set the stage for continued dividend increases and higher shareholder returns over time, making it a compelling investment for income seekers.
Telus to keep growing its dividend
Telus continues to deliver profitable growth, which reflects the resiliency of its business model and the strength of its leading portfolio of services. This positions it well to pay and increase its dividend in the coming years.
Telus has been aggressively investing in spectrum and network infrastructure, improving both the capacity and performance of its offerings. These investments are paying off in the form of revenue growth, increased customer numbers, and notably high customer retention rates.
In Q1 2025, Telus added 218,000 new customers. This shows the strong demand for its bundled services and broadband networks. Moreover, its postpaid mobile churn has remained below 1% for over 11 consecutive years. The low churn rate reflects strong customer loyalty.
Telus is also expanding its connected device subscriber base, driven by the growth of Internet of Things (IoT) solutions. Further deployment of its fibre-optic network is also reducing customer churn and contributing to its growth in subscriber base.
Telus is making strategic investments while continuing to focus on product innovation, sales channel expansion, and cost efficiencies through technology optimization. These efforts support steady earnings growth and provide a solid foundation for future dividend growth.
Telus recently raised its dividend by 7%, a move that aligns with its longstanding commitment to shareholder value. Since launching its multi-year dividend growth program in 2011, Telus has established a reliable track record of increasing payouts, even during periods of economic slowdown and market volatility.
Looking ahead, Telus has extended this program again, aiming for annual dividend growth of 3% to 8% through 2028. With an increase in earnings before interest, taxes, depreciation, and amortization (EBITDA), moderating capital spending, and the monetization of non-core assets helping to reduce debt, the outlook for sustainable dividend hikes remains strong.
In summary, this dividend champion is unstoppable and plans to continue increasing its dividend.
