Telus (TSX: T) is arguably the most enticing dividend giant on the TSX Index to scoop up these days, with the yield most recently blasting past the 8% mark. Undoubtedly, after that last dividend hike, it seems like shares of Telus are a great way to score capital upside and a yield (currently hovering close to 8.4%) that’s not about to be on the receiving end of a dividend reduction.
After a brutal Tuesday that saw shares of T get slammed by 5.3%, the yield may very well be flirting with 9% and even 10% if the selling gets really bad over the coming weeks and months. Of course, whether management still has the confidence to hike the payout by a single-digit percentage rate next year remains the big question. Personally, I think the last dividend hike wasn’t all too necessary, especially when you consider the areas in which the firm could have invested the capital to spark a turnaround sooner rather than later.
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The turbulence continues for Telus stock
With telecom headwinds weighing heavily and the dividend’s safety coming into question with every sudden downward move, investors might wish to look to other high-yielding dividend giants in the TSX Index waters this November.
With Telus stock getting slapped with a downgrade amid recent weakness, investors should implement more of a dollar-cost averaging (DCA) strategy since the pain might not be over quite yet at $19 per share. It’s getting harder to value Telus stock as some analysts begin to turn against the name and lower their price targets. Either way, I think there are better, less stomach-churning ways to score a fat dividend going into year’s end.
Canadian Natural Resources: A dividend giant that might be a better bet for dividend fans
At this juncture, I’d much rather be in the likes of a Canadian Natural Resources (TSX: CNQ), which sports a 5% dividend yield and a good amount of newfound momentum. Of course, shares of Canadian Natural Resources might still be in a trough of sorts, but, of late, things have been looking up even as the rest of the stock market has been looking down, thanks in part to a fading out of the AI trade.
Over the past three months, shares of CNQ have been up close to 16%. Not a bad gain for an energy juggernaut that’s flown under the radar in the past year, as investors moved on to growthier trades. Though the third-quarter results were good, I think shares haven’t yet appreciated the full strength of the results. In many ways, a stable, low-cost cash flow-generative firm in the energy patch might be the anti-AI trade that helps investors do well in what could be another “off year” for tech and growth.
With a 15 times trailing price-to-earnings (P/E) multiple and the means to power higher after consolidating for a few years now, I think investors looking for big yields (and dividend growth) with less in the way of near-term pain might wish to rotate into the name at a time like this, when investors might value safety and dividends more than growth stories and riskier upfront yields.
