If you’re planning to build a dividend portfolio you can hold for decades, look no further than the two reliable names of TELUS (TSX:T) and Sun Life Financial (TSX:SLF). Both offer high yields today, and both just delivered solid second-quarter results that show why these dividends look built to last. So let’s get into it.
Image source: Getty Images
TELUS
Let’s start with TELUS. The dividend stock has been stuck in a rough patch over the last year, rising just 5% compared to double-digit gains in the broader market. But that’s masking what’s happening under the surface. TELUS added 198,000 mobile and fixed customers in Q2, and revenue rose 2% to $5.1 billion, driven by strong demand across its core tech, health, and digital segments. Earnings before interest, taxes, depreciation and amortization (EBITDA) in those units climbed 4%, in line with full-year targets. The dividend stock reaffirmed guidance and continued to grow its cash flow, up 11% year over year.
Its TELUS Health business was a standout, with revenue up 16% and EBITDA up 29%, fuelled by a surge in global coverage and solid synergy realization from the LifeWorks acquisition. Customer churn remains below 1%, an impressive feat in this competitive space. And while debt remains high, TELUS is actively deleveraging. It recently struck a $1.3 billion deal to sell a near-50% stake in its wireless tower business. This should help reduce its net debt-to-EBITDA ratio toward 3.6 by year-end.
TELUS is also pushing hard into artificial intelligence (AI), smart home energy, and next-gen health tech, investments that could pay off in a big way over the next decade. Right now, the stock yields 7.3%. Despite a high payout ratio on paper, the dividend stock generates enough free cash flow to sustain and even grow it over time. For patient investors, this could be a top-tier long-term hold once the market catches up.
Sun Life
Then there’s Sun Life, a stalwart of the Canadian financial world with a 4.3% dividend yield and a business that keeps quietly churning out growth. In Q2, underlying net income rose 2% to just over $1 billion, while reported net income was up 11%. Assets under management hit a record $1.5 trillion, up $76 billion year over year.
The big story here is Asia. That segment delivered 15% profit growth, thanks to a surge in bancassurance sales and investment earnings. Insurance sales in Hong Kong, India, and the Philippines all rose sharply, positioning Sun Life for continued growth across fast-growing markets. Meanwhile, the U.S. business held steady despite pressure on margins, and Canada remains a steady performer.
Even in its asset management arm, Sun Life found bright spots. The company leaned into digital health innovation, from cancer support services in the U.S. to virtual dental programs in Canada. These aren’t headline-grabbing moves, but they show Sun Life’s ability to evolve and add value in meaningful ways. From a capital strength perspective, Sun Life’s LICAT ratio remains robust at 151%, giving it the flexibility to keep buying back shares. Which it did, repurchasing nearly $400 million worth last quarter and raising its dividend. Over the past five years, the dividend stock has grown its dividend at an average pace above 5% annually. With a modest payout ratio under 60% and steady earnings growth, that trend looks set to continue.
Bottom line
Yes, both dividend stocks have their risks. TELUS carries a lot of debt, and its capital-intensive buildouts may continue to pressure margins. Sun Life is exposed to market volatility and demographic shifts. But both firms have weathered countless market cycles and come out stronger. And right now, $7,000 invested in each would bring in around $813 annually!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| SLF | $81.05 | 86 | $3.52 | $302.72 | Quarterly | $6,969.30 |
| T | $22.84 | 306 | $1.67 | $511.02 | Quarterly | $6,987.04 |
TELUS and Sun Life each offer a rare mix of yield, growth, and staying power. The current yields alone make these compelling, but what really matters is the ability to keep growing those payouts while evolving the businesses. For investors who want to sleep well and get paid to wait, these are two dividend stocks worth locking in today.
