There’s no such thing as a free lunch, and that goes for “do-nothing” investing. Now, these two stocks I’m going to highlight in this piece provide investors with about as little friction as is possible in the world of equity investing, at least for those who are willing to simply buy today and hold for the long term.
In essence, hitting the “buy” button and being patient is the strategy I’m talking about with these two world-class dividend stocks. Investors seeking reliable passive income for retirement or other long-term goals have excellent options in these two companies.
So, without further ado, let’s dive in!
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Telus
In the world of large-cap Canadian telecommunications stocks, Telus (TSX: T) remains one of my top picks right now.
Much of this thesis has to do with the company’s relatively high current dividend yield of 8.9%. Indeed, it’s hard to find any sort of blue-chip company trading with such a yield right now. And, of course, looking at the chart above, this yield is a result of what one can only call a plummeting stock price.
Now, Telus has gone through similar cycles in the past. And there are headwinds brewing in the telecom sector, with reports of delinquencies on mobile phone bills surging of late.
That said, I’ve long believed that telecom companies can be viewed as the utilities of the future. It’s one of the last bills investors will want to default on, given the fact that so many of us essentially live our lives on our phones.
With still robust financials and a balance sheet that supports its current yield, I’m not freaking out about a potential dividend cut as others are. In fact, I think now is a great time to be contrarian and buy Telus on this dip.
Restaurant Brands
Another top dividend stock I continue to come back to, not only for its current yield and dividend-growth potential, but also for its defensive business model, is Restaurant Brands (TSX: QSR).
Shares of the Tim Hortons, Burger King, and Popeyes (among other banners) parent have been on a bumpy ride over the past five years. That said, it’s been a journey that’s mostly taken long-term investors higher.
One notable aspect of owning QSR stock I don’t think gets enough attention is the company’s 3.5% dividend yield. This is a company that’s devoted to returning capital to shareholders and has done its fair share of providing more robust share buybacks and dividend distributions over time. Given the defensive nature of Restaurant Brands’s business model, this is a theme I expect to continue for years and decades to come.
Of course, the current dynamics in the fast-food sector are nebulous. Investors don’t know whether the rise of GLP-1 drugs and dieting trends will derail earnings long-term. However, trade-down among those dining away from home has clearly benefited the company’s core banners.
I’m more in the latter group right now who believe the balance of risks is tilted in a positive direction for long-term investors.
