I'd Put My Entire TFSA Into This 7.6% Dividend Giant

I’d Put My Entire TFSA Into This 7.6% Dividend Giant

Telecom stocks can be risky these days, but this one offers up safety in spades.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published July 17, 2025 8:30 pm EDT

For Canadians focused on steady income and defensive investing, few stocks are more dependable than a telecom. And when that telecom pays a dividend above 7%, it’s hard not to pay attention. TELUS (TSX:T) is one of those names that continues to deliver payouts even in uncertain times. If I were putting my entire Tax-Free Savings Account (TFSA) to work today, TELUS would be a top contender. It’s stable, essential, and offering the kind of yield that could power a portfolio for years.

social media scrolling on phone networking — Source: Getty Images

About TELUS

TELUS operates in one of the most recession-resistant industries out there –communications. People need phone, internet, and increasingly, connected health services, regardless of economic conditions. That’s a big part of what gives TELUS its defensive edge. But what makes it even more appealing now is the dividend, which as of recent trading, sits around 7.6%. At a share price of about $22.50, that translates to an annual payout of $1.67 per share.

In its most recent earnings report, TELUS posted revenue of $4.9 billion in the first quarter of 2025. That’s up 1.9% from the year before. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $1.7 billion, reflecting a 4.5% increase. Net income rose sharply to $376 million, or $0.25 per share, up from just $217 million, or $0.14 per share, last year. That’s a big jump, driven by better operational efficiency and growth in both core telecom and TELUS Health.

While wireless and internet remain the bread and butter, the real story continues to be TELUS Health. That segment saw revenue jump 20% year over year, thanks to expanding services across Canada and internationally. TELUS now reaches over 55 million lives through its digital health offerings, and that number keeps growing. It’s not just a side business anymore; it’s a serious driver of growth that differentiates TELUS from its peers.

Considerations

One reason investors have been hesitant with TELUS in recent months is debt. Like most telecoms, TELUS carries a hefty debt load. But it’s also investing in essential infrastructure, like 5G networks and fibre, to ensure long-term competitiveness. Capital expenditures were trimmed in the latest quarter, part of the company’s plan to return to positive free cash flow in the second half of 2025. That’s worth watching, but not panicking over. TELUS has a long track record of prudent financial management.

Despite the debt, TELUS continues to raise its dividend regularly. The most recent hike was 3.9%, marking the 25th consecutive year of dividend growth. That kind of consistency is rare, and it’s the kind of foundation that suits a TFSA perfectly. All those dividend payments are tax-free when sheltered inside a TFSA, and when reinvested, they can quietly compound into something substantial over time.

Now, could there be a downside? Absolutely. Rising interest rates increase borrowing costs, and any significant economic slowdown could impact customer growth. TELUS also operates in a highly regulated environment, and any shift in policy could affect its pricing power. But those risks are part of the telecom landscape, and TELUS has weathered them all before.

Bottom line

If I were putting my entire TFSA to work today, a $7,000 investment would buy around 311 shares of TELUS. That would generate roughly $519 in annual tax-free income right out of the gate. And that’s assuming no dividend hikes, no capital appreciation, and no reinvestment. Add those factors in, and the numbers only get better.

COMPANY	RECENT PRICE	NUMBER OF SHARES	DIVIDEND	TOTAL PAYOUT	FREQUENCY	TOTAL INVESTMENT
TELUS	$22.50	311	$1.67	$519.37	Quarterly	$6,997.50

At a time when many Canadians are looking to fund day-to-day spending or offset rising costs, steady income matters more than ever. TELUS offers that, plus a growth angle through digital health and smart infrastructure. It’s not a flashy stock, but it’s one that just keeps showing up, quarter after quarter, with reliability and income.

For a TFSA designed to grow quietly in the background while generating real monthly like income, TELUS checks all the boxes. It’s boring in the best possible way, and that’s exactly what makes it such a compelling pick right now.