AI is impacting nearly every aspect of our lives. From research and medicine to learning, robotics, and process automation, the long-term potential that AI presents is, in a word, incredible. But the surge in AI use is putting enormous pressure on the power grid and pushing data centre buildout requirements to new limits.

These energy‑intensive AI workloads are now driving electricity use higher at a pace we haven’t seen before. A big part of that surge comes from hyperscale expansion, as major cloud providers rush to build next‑generation AI infrastructure.

In fact, there’s now over $650 billion expected to pour into new facilities over the next few years. This means that electricity demand is rising faster than what utilities ever planned for.

That’s why hyperscale operators now need stable, round‑the‑clock power. And that’s pushing regulators to rethink how the traditional grid is built.

To close that widening power gap, nuclear energy is increasingly being viewed as a practical way to support data centre growth. That’s where the opportunity offered by Cameco (TSX:CCO) comes into play.

How nuclear energy fits into the AI data centre buildout

AI workloads require enormous amounts of electricity. As a result, data centres are required to operate 24/7 with no tolerance for downtime. While there is a preference for meeting those growing needs with cleaner, renewable energy sources, renewables alone can’t provide the consistent base-level power to keep data centres running at full capacity.

That’s why nuclear energy is being considered. Nuclear offers a carbon‑free, reliable source of power that fits the nonstop needs of hyperscale operators.

As a result, governments around the world are accelerating nuclear approvals, extending reactor lifespans, and investing in next‑generation technologies such as small modular reactors (SMRs).

Utilities are reworking their long‑term plans as AI‑related electricity demand climbs much faster than expected. As more data centres come online, the need for stronger, more reliable baseload power becomes impossible to ignore.

Nuclear remains one of the few power sources that can realistically scale to meet this level of demand. That’s also influencing uranium demand forecasts, which are already on an impressive run. By way of example, uranium spot prices have jumped to nearly US$90 per pound this year.

At the same time, tight uranium supplies are pushing the market higher, which works in Cameco’s favour.

Similarly, there are approximately 75 reactors under construction around the world and a further 120 reactors that are in various stages of approval.

Why Cameco is positioned to benefit from the surge in demand

Cameco is one of the largest and most important uranium suppliers on the planet. The company operates high-grade mines and maintains long‑term contracts with global utilities.

Those contracts span decades in duration and provide Cameco with some insulation from fluctuating uranium prices. Cameco also has exposure to market-based pricing, which allows it to benefit from any shorter-term price shifts.

As nuclear energy demand increases, Cameco’s role in the supply chain becomes more important. That’s because as AI demand increases, so too does the demand for electricity. By extension, this means that utilities are under increasing pressure to secure reliable fuel sources.

That’s why Cameco’s size and global reach give it an advantage as this transition plays out. And Cameco is responding to that change in demand by ramping up production across some of its key facilities.

The bottom line for long‑term investors

The $650 billion data centre buildout is reshaping electricity demand on a global scale. And nuclear power is emerging as a solution to meet that surge in demand, creating a unique opportunity for long-term Cameco investors.

With strong assets, long‑term contracts, and leverage to rising uranium prices, Cameco offers investors a straightforward way to participate in this AI‑driven energy shift.

While no stock is without risk, Cameco does offer investors a unique opportunity, making the stock an intriguing option to add to any well-diversified portfolio.

The post 1 Canadian Company Set to Make a Fortune from the $650 Billion Data Centre Buildout appeared first on The Motley Fool Canada.

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Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool recommends Cameco. The Motley Fool has a disclosure policy.

Utility stocks are regarded as some of the best and most reliable income generators on the market. There are several reasons for that view, making the typical utility a key dividend stock to buy and hold for decades.

For investors searching for a dividend stock to buy and hold, utilities are some of the best long-term options to start with.

In fact, most investors can start a position in a utility with as little as $1,000. But what is that dividend stock to buy right now?

Canadian Utilities is the top dividend stock to buy today

That stock to buy is Canadian Utilities (TSX:CU). Canadian Utilities is one of the largest utility stocks in Canada. Apart from its size, the company holds the longest dividend-growth streak in Canada with over 53 consecutive years of annual increases.

That makes Canadian Utilities one of just two Dividend Kings in Canada. More importantly, it speaks to the company’s reputation as a stable long-term holding that has held up through different market environments.

The main factor behind that stability can be traced back to Canadian Utilities’ business model. As a regulated utility, Canadian Utilities generates the bulk of its revenue from electricity and natural gas distribution and transmission at rates set by regulators.

Those rates are backed by long-term contracts that span decades. This means that Canadian Utilities continues to generate predictable cash flows irrespective of how the market fares. And because utilities are necessity-based services, consumers can’t simply cut back to trade down to an alternative as they would with retail.

The regulated and predictable structure of Canadian Utilities means that the company can plan for growth, and pay out a stable, growing dividend. This makes it the ideal dividend stock to buy for those investors seeking something stable.

A closer look at Canadian Utilities’ dividend strength

Canadian Utilities’ dividend is the real reason investors continue to flock back to the stock. As of the time of writing, the utility offers a quarterly dividend that pays out a yield of 3.8%.

Prospective investors should also note that Canadian Utilities isn’t just about dividends. The company continues to put capital into its regulated infrastructure, steadily building the assets that drive future earnings.

For investors looking to invest $1,000, that translates into a starter position that will generate just under one additional share each year from reinvestments alone.

If that initial investment becomes an annual habit, that Canadian Utilities position can quickly grow into a long-term income producer. Over a longer period, this compounding effect can significantly boost total returns.

For these reasons, Canadian Utilities is a top dividend stock for investors to consider owning right now.

Why Canadian Utilities fits long‑term dividend portfolios

Canadian Utilities is well‑suited for those investors seeking a dividend stock to buy that can provide long-term income and capital preservation.

The stock’s defensive appeal helps cushion portfolios during market downturns, while the stable, regulated revenue stream provides a predictable income that few companies can match.

Canadian Utilities won’t win awards for high growth or a high yield. What it will provide is stable growth and a well-covered dividend.

That fact alone makes this a dividend stock to buy for any well-diversified portfolio.

The post The Ultimate Dividend Stock to Buy With $1,000 Right Now appeared first on The Motley Fool Canada.

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Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

There are few stocks on the market that are as incredible as Amazon (NASDAQ:AMZN). That being said, some investors have been trimming their positions in Amazon stock. More specifically, billionaire investors are rotating out of Amazon.

That rotation comes as Amazon’s value has expanded, the cloud business is maturing, and those ultra-wealthy investors are balancing out their portfolios that are concentrated with tech.

This kind of rotation is common when a stock becomes an outsized winner in a portfolio, prompting investors to lock in gains and then shift to earlier‑stage opportunities.

That’s not a sign that Amazon is broken. It’s just profit-taking and balancing. But what is more important is where some of that capital flowing from Amazon stock is now moving towards.

Why Shopify is attracting big-money investor attention

That capital is flowing to Shopify (TSX:SHOP). The Canadian e-commerce platform has re-emerged as one of the most compelling growth stories on the TSX, and the ultra-wealthy investors are noticing.

That shift comes after a period of cost-cutting and operational tightening on Shopify’s part. Specifically, Shopify has adopted a more disciplined growth path that includes stable revenue growth and improving margins.

Those margin gains have become a key part of Shopify’s turnaround narrative, signaling to institutional investors that the company can scale without overspending.

Shopify is steering its focus to its e-commerce platform over failed experiments in capital-intensive logistics moves.

Perhaps more importantly is Shopify’s growing competitive moat. The company’s merchant ecosystem, app marketplace and endless stream of bolt-on components has created a sticky environment for its customers that is difficult to replicate.

Concurrently, that defensive moat is now generating recurring subscription revenue. Subscription revenue has become an important pillar for Shopify, providing predictable cash flow that supports long‑term platform development.

As e‑commerce continues to expand, Shopify remains a Canadian tech titan with its platform operating in nearly every country on the planet while still offering a clear runway for long‑term growth.

How Shopify stacks up against Amazon in today’s market

Amazon and Shopify are often mentioned together, but they operate differently.

Amazon is a massive, diversified operation with segments for retail, cloud computing, advertising, logistics, and even hardware divisions.

Shopify, by contrast, is a capital‑light software platform that enables merchants to build and scale online stores without owning inventory or warehouses.

In other words, they are related and could even be viewed as complementary. That difference is exactly why billionaire investors see the upside in Shopify.

Amazon is a mature giant with slower growth expectations and higher capital requirements. Shopify, meanwhile, still has room to expand, deepen its merchant services, and grow its ecosystem without operational burdens.

For investors seeking long‑term growth, Shopify offers a cleaner, more focused growth path.

Should investors follow what billionaire are doing?

Billionaire trades can be interesting, but they aren’t instructions for everyday investors.

Ultra‑wealthy investors have different time horizons, risk profiles, and diversification needs than everyday investors, not to mention entirely different levels of capital.

Rotating out of Amazon may reflect profit‑taking or even portfolio balancing rather than a negative view of the company.

In a similar view, interest in Shopify doesn’t guarantee short‑term gains.

For retail investors, the more important question is how each company fits your portfolio.

Amazon offers stability, scale, and diversified revenue streams, whereas Shopify offers growth potential, innovation, and exposure to global e‑commerce trends. Both can play a role in a long‑term growth portfolio.

Ultimately, both companies offer distinct advantages, and the right choice depends on whether an investor prioritizes diversified stability or concentrated growth potential.

In my opinion, both are stellar growth stocks that would do well in any, well-diversified portfolio.

The post Billionaires Are Selling Amazon Stock and Betting on This TSX Stock appeared first on The Motley Fool Canada.

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Fool contributor Demetris Afxentiou has positions in Shopify and Amazon. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Amazon. The Motley Fool has a disclosure policy.

TFSAs are great investment vehicles that provide a lasting tax-free income source for investors. That’s because growth and withdrawals are completely tax-free, which makes every dollar contributed much more powerful. In fact, it’s not out of the question to make $300 per month or more tax-free from a TFSA.

To meet that goal, investors need to pick the right TSX dividend stocks that can provide the consistency and growth to make $300 per month.

Fortunately, there’s no shortage of great stocks on the market to help reach that goal, including this trio of dividend picks.

Pick #1: The reliable dividend anchor

The first stock to help make $300 per month in a TFSA is Enbridge (TSX:ENB). Enbridge is one of Canada’s most well-known income stocks, and for good reason. The company operates one of the largest and most complex pipeline networks on the planet.

That business, which includes both crude and natural gas segments, hauls massive amounts of both daily, generating predictable, contract-backed cash flow.

Beyond pipelines, Enbridge operates a renewable energy business as well as a natural gas utility. Like the pipeline business, both generate reliable, steady revenue streams that leave room for growth and income.

That stability is a major reason Enbridge has been able to maintain and grow its quarterly dividend over time. Enbridge pays out a handsome 5.4% yield and has provided investors with annual increases to that dividend for three decades without fail.

For TFSA investors, Enbridge serves as the foundational anchor that is hard to ignore. The company provides a stable revenue stream, strong dividend growth, and a diversified set of reliable business segments.

This makes it a strong compounder to make $300 per month in income.

Pick #2: The high-yield telecom

Canada’s big telecoms represent another area for investors to consider when deciding how to make $300 per month in income. Telus (TSX:T), in particular, is a telecom stock worth considering.

As one of Canada’s major telecom companies, Telus benefits from recurring revenue across its subscriber-based mobility, internet, and business solutions. These services are deeply embedded in everyday life, making Telus one of the most defensive telecoms on the market.

Turning to income, Telus offers one of the highest yields on the market. As of the time of writing, Telus offers a yield of 9.9%. Part of the reason for that inflated yield can be traced back to the market pressures over the past few years.

Specifically, higher interest rates and elevated spending put pressure on the stock. As capital-intensive projects became more expensive, investors rotated out to higher-growth options.

As a result, Telus saw its stock price drop nearly 35% over the trailing five-year period. The telecom also froze its dividend increase program to focus on debt reduction and bringing costs down.

With interest rates stabilizing, if not dropping, Telus is now in a much more sustainable position, while its yield remains at an inflated level.

For income-focused investors, the combination of a high yield and essential-service demand makes Telus a strong contributor to any portfolio that is tasked to make $300 per month.

Pick #3: High yield from everyday retail

Rounding out the three stocks to make $300 per month is SmartCentres REIT (TSX:SRU.UN). SmartCentres is a REIT that is focused on necessity-based retail.

SmartCentres has some of the largest retail names among its anchor tenants, which provides substantial foot traffic and steady rental income. This defensive positioning is a key reason SmartCentres has been able to maintain dependable distributions.

Speaking of distributions, SmartCentres offers investors a monthly distribution schedule. As of the time of writing, SmartCentres offers an impressive 6.5%, yield, making the REIT one of the better-paying options on the market.

This makes the REIT a great option for investors looking to not only make $300 per month, but to also generate recurring monthly income from necessity-based retail.

How much you need to make $300 per month

To make $300 per month from the three stocks mentioned above, investors would need to invest $50,000 across all stocks. Here’s how that allocation works out:

The post How to Make $300 Per Month Tax-Free From Your TFSA appeared first on The Motley Fool Canada.

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Fool contributor Demetris Afxentiou has positions in Enbridge. The Motley Fool recommends Enbridge, SmartCentres Real Estate Investment Trust, and TELUS. The Motley Fool has a disclosure policy.

If you could only buy and hold a single stock, what stock would you pick? Holding a single stock changes the selection process for investors. Instead of short-term noise and quarterly updates, the focus turns to reliable income and growth that can be relied on for decades.

That’s the kind of appeal that comes from Canada’s big bank stocks. And there’s one big bank I would buy and hold if I could only be invested in a single stock.

It’s a stock that rewards patience, offers stability through market cycles and continues to deliver a growing dividend income year after year.

Why this buy and hold stock stands out long term

That buy-and-hold stock is Bank of Nova Scotia (TSX:BNS). Scotiabank has operated for nearly two centuries, which matters when considering a stock to own for decades.

Canada’s big bank stocks are known for their conservative lending practices, consistent profits, strong capital buffers, and robust dividends. This helps make the big bank stocks reliable anchor holdings for any portfolio.

But what factors differentiate Scotiabank from its peers when considering it as the only stock to hold?

Scotiabank, like its peers, offers a diversified mix of retail banking, wealth management, and commercial lending. Where the bank differs from its peers is with respect to growth focus.

The banking market in Canada is saturated, if not dominated by the big banks. This means that the banks have increasingly turned to foreign markets to attain growth. For most banks, that expansion means the U.S. market.

That’s where Scotiabank differs. The bank has developed the name of “Canada’s most international bank.” And in recent years, Scotiabank has lived up to that name. The bank has operations in over a dozen countries around the world, and has, until recently placed a focus on high-growth markets in Latin America.

Over the past years Scotiabank has scaled back that focus and moved to investing in less volatile, more-developed markets in North America to fuel its growth. That includes both Mexico and the U.S., where the bank has a growing presence.

Overall, the bank offers a long history of navigating market volatility while building up an international portfolio of operations that pays a handsome dividend.

For investors looking at a buy-and-hold stock that can compound quietly for decades, Scotiabank’s stability and growth is a clear advantage.

A dividend track record that supports long‑term investors

‘One of the main reasons why investors flock to Scotiabank is for the quarterly dividend that the bank offers. That’s another area where Scotiabank’s stability excels.

In fact, the bank has paid dividends without fail since the 1800s. That’s a record that few companies across the world can match.

As of the time of writing, the yield on that quarterly dividend is 4.2%, which is the highest across its big bank peers. More importantly, it’s both well-covered and growing. Scotiabank has provided annual upticks to that dividend going back well over a decade.

For long‑term investors, that dividend is more than just cash flow. It’s a built‑in return that compounds over time, especially when reinvested. That’s an appealing part that most investors overlook.

Given the current yield, investors who drop $10,000 into Scotiabank will generate another share every quarter from reinvested dividends alone. That can compound without any significant additional investments over longer periods of time.

Scotiabank’s consistency over market cycles reinforces its position as a buy-and-hold stock. Even during periods of market volatility, Scotiabank has maintained its payout, making it a compelling choice for anyone prioritizing dependable long‑term income.

Why Bank of Nova Scotia fits a single‑stock strategy

No stock, even the most defensive, is without some risk. Fortunately, Scotiabank’s defensive appeal, reliable business, and growing dividend minimize that overall risk.

As a long-term income producer, Scotiabank checks all the boxes as a buy-and-hold stock for investors. It offers a unique mix of global diversification, dependable dividends, and stability that even some of its own big bank peers cannot match.

In my opinion, this is the big bank stock for investors to buy and hold for decades.

The post If I Could Only Buy and Hold a Single Stock, This Would Be It appeared first on The Motley Fool Canada.

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Fool contributor Demetris Afxentiou has positions in Bank of Nova Scotia. The Motley Fool recommends Bank of Nova Scotia. The Motley Fool has a disclosure policy.

When an otherwise impressive TSX dividend stock drops by double digits, long-term investors are faced with an opportunity to lock in a better position for long-term returns. While there’s always a reason why a stock drops, the long-term potential of that investment always needs to be weighed.

One segment where this view has become apparent this year is with Canada’s telecom stocks. More specifically, I’m referring to Rogers Communications (TSX:RCI.B), which is down 12% year to date.

As a telecom provider with essential subscription services, Rogers generates steady cash flow that supports long‑term dividend reliability even during market volatility.

Let’s try to answer the question of why Rogers is down and why your portfolio needs this TSX dividend stock.

Why is Rogers down this year?

To be fair, Rogers isn’t the only one of Canada’s big telecoms that is down this year. Rogers is, however, the one telecom stock that is down the most among its peers. That has caught the attention of long-term dividend investors.

The current pullback can be attributed to a variety of issues, rather than one single cause.

Telecoms like Rogers are capital-intensive businesses. They rely heavily on financing to fund network upgrades. When interest rates remain high, as they have in recent years, that results in extra pressure on a telecom’s finances. This drives the stock price down but also leads investors to rotate out of telecoms to higher-growth sectors.

For long-term investors considering this TSX dividend stock, this pullback should be viewed as an opportunity to buy a quality stock at a discounted rate. In fact, the Rogers business remains as resilient as ever.

Telecoms like Rogers generate a recurring revenue stream that is reliable and highly defensive. In recent years, some of Rogers’s subscriber-based segments have become more essential in nature. As a result, that’s broadened the defensive appeal of the stock as a whole.

Why this dip is an opportunity for investors

The dip in stock price has pushed Rogers’s quarterly dividend to an attractive 4.39% yield. That’s not the highest among the big telecoms, but it may be one of, if not the most sustainable among the lot right now.

This stability is especially important in a capital‑intensive sector like telecoms, where consistent cash generation is key to maintaining a sustainable dividend.

Where Rogers’s peers have endured dividend cuts and freezing annual increases over the past few years, Rogers has maintained its more conservative approach. In fact, unlike its peers, Rogers opted to suspend its annual increase years ago. Instead, Rogers opted to focus on investing in growth initiatives and paying down debt.

That’s not to say the current yield isn’t attractive. Investors who are able to invest $7,500 into Rogers will benefit from over a half-dozen shares generated each year from reinvestments alone.

Over a longer period, that’s a powerful compounding engine.

Beyond the dividend, Rogers benefits from a business model that’s built on a recurring revenue stream. Wireless plans, broadband subscriptions, and bundled subscription services create predictable income streams that help support both operations and shareholder returns. In addition, the company’s investments in 5G networks and infrastructure also position it for long‑term relevance as data usage continues to grow across the country.

This combination of a higher yield backed by defensive essential services makes Rogers a more appealing option for patient investors. For those building a portfolio designed to compound over decades, Rogers offers the kind of steady profile that fits well within a buy‑and‑hold strategy.

Will you buy this TSX dividend stock

Rogers sits at an interesting crossroads for investors. It trades at a 12% discount this year, offers a well-covered 4.39% dividend, and generates a recurring revenue stream from its essential subscription services.

For investors seeking a TSX dividend stock that can anchor a long‑term portfolio, Rogers checks many of the right boxes. More importantly, the current dip offers a chance to buy a stable company at attractive levels. With this, you also get a higher yield and long‑term growth potential.

For income‑focused investors, Rogers can serve as a defensive anchor that provides stability through different market cycles. In my opinion, Rogers is a great TSX dividend stock for buy‑and‑hold investors looking to add to any well-diversified portfolio.

The post 1 Magnificent TSX Dividend Stock Down 12% to Buy and Hold for Decades appeared first on The Motley Fool Canada.

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Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool recommends Rogers Communications. The Motley Fool has a disclosure policy.

The TFSA offers investors the opportunity to create tax-free income thanks to the unique design of the account. And picking the right TFSA dividend stock for that account can make all the difference in a long-term portfolio.

Fortunately, there are plenty of great TFSA dividend stock candidates on the market that can provide both growth and income-earning potential lasting decades. These investments are built on predictable cash flows that allow them to continue paying even when the market isn’t cooperating.

This makes choosing a dependable TFSA dividend stock even more important, as every reinvested dollar compounds tax‑free for decades.

One such stock to consider investing in is Emera (TSX:EMA), and here’s why it belongs in your portfolio.

Emera’s business model supports consistent cash flow

Emera operates as a regulated utility. This means that it generates the bulk of its revenue from rate-regulated assets. These assets generate predictable cash flow backed by rates set by regulators.

Not only does this make results predictable and allow the company to pay a handsome dividend and invest in growth, but it also helps to reduce volatility.

The predictable nature of Emera is a huge advantage that is often dismissed. Utilities like Emera can be expensive to operate. As a regulated utility stock, Emera provides essential services that remain in demand regardless of economic conditions. This adds another layer of stability for long‑term investors.

Utilities also tend to benefit from long‑term capital planning, where investments in infrastructure translate into stable, recurring returns over time. A steady revenue stream allows Emera to plan out long-term capital planning, ultimately leading to revenue growth.

In terms of footprint, Emera operates across several regions in Canada, the U.S., and the Caribbean. That geographic diversification means that results aren’t tied to a single market, which adds yet another layer of defensive appeal.

For TFSA investors, that stable business model is underrated. It provides visibility into future earnings and supports a dividend that can be counted on every year.

In a market where many sectors face cyclical swings, regulated utilities like Emera can offer a defensive anchor.

Emera’s 4% yield fits long‑term TFSA income goals

As of the time of writing, Emera offers a yield of 4.1%. That’s not the highest yield on the market, but it is growing and more importantly, stable. That stability is backed by Emera’s regulated business model, and the current yield leaves room for the company to invest in growth.

Emera also has a long history of maintaining and growing that quarterly dividend. For investors seeking a TFSA dividend stock, that distinction is huge. In fact, Emera has paid that dividend without fail for over three decades. The company has also provided near-annual increases to that payout going back over a decade.

That’s an important point for long-term investors. A dependable yield like this helps investors build a predictable income base inside their TFSA without relying on high‑risk, high‑volatility alternatives.

Recall that in a TFSA, every dollar of dividend income compounds tax‑free, and Emera’s stable yield helps build a reliable income stream over time.

By way of example, consider an investment of $7,500 into Emera (as part of a larger, well-diversified portfolio). That initial investment is enough, given the current yield and payout, to generate an additional share from reinvestments alone each quarter.

In other words, Emera is the TFSA dividend stock that can quietly compound in the background on its own for decades.

Why Emera stands out as a TFSA dividend stock

No stock is without risk, which is why the importance of diversifying cannot be stated enough. Fortunately, Emera offers a perfect mix of yield, defensive appeal, and growth.

For those investors building their portfolio and seeking a TFSA dividend stock, Emera checks the right boxes. It offers a balanced yield, a defensive business model, and a history of delivering consistent results.

For Canadians seeking a reliable TFSA dividend stock, Emera offers the consistency and long‑term visibility that make tax‑free income planning far more effective.

The post Here’s an Ideal 4% TFSA Dividend Stock That Pays Constant Cash appeared first on The Motley Fool Canada.

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Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool recommends Emera. The Motley Fool has a disclosure policy.

Canada’s big telecom stocks are often regarded as some of the best investments for long-term investors. There are more than a few reasons for that. First, there’s the appeal of owning a Canadian dividend stock that provides a reliable yield. Then there’s also the defensive appeal of telecom stocks themselves.

But which telecom is the ideal Canadian dividend stock to own right now?

Enter Telus (TSX:T).

Telus is one of the big telecoms and boasts a portfolio of subscriber-based services that generate a reliable and recurring source of revenue. That revenue stream has allowed Telus to pay out one of the best dividends on the market for well over two decades.

But despite the defensive appeal of providing essential services, the stock has struggled in recent years. In fact, the stock is down a whopping 17% over the past year. As the stock price has dipped, Telus’s yield has swelled.

Does this make Telus a good opportunity right now?

Why Telus is down 17%

The recent share price dip is tied to larger macroeconomic pressures rather than a company‑specific failure on the part of Telus. Telecoms like Telus are capital‑intensive, meaning that they are heavily reliant on borrowing to fund network expansion and infrastructure upgrades.

As interest rates rose sharply over the past several years, the cost of borrowing also increased. That put added cost pressure on Telus, leading to a dip in the stock price as investors rotated out of defensive sectors into growth holdings.

Telus has also been working through a period of elevated capital expenditures as it expands its fibre network and invests in digital services. While these do support long‑term growth, they temporarily weigh heavily on free cash flow.

Combined with slower subscriber growth and a more cautious consumer environment, these factors have contributed to the stock’s 17% decline. In fact, looking out over a longer five-year period shows Telus’s stock price decline at a staggering 34%.

Investors should note that, above all, none of these issues points to structural weakness in the business. If anything, Telus is mitigating its current risk through a variety of factors.

Why Telus remains a reliable Canadian dividend stock

Despite the headwinds, Telus continues to demonstrate the qualities of a Canadian dividend stock that income investors value. Telus continues to benefit from its reliable, recurring revenue stream from its subscriber business.

If anything, the appeal of that segment has grown in recent years as those subscriber services, particularly the internet and wireless segments, have become a necessity for most.

Further to this, the strong national footprint that Telus offers ensures recurring revenue and low customer churn from across the country.

Finally, there’s Telus’s move to diversify beyond its traditional telecom segments. Telus offers a variety of digital solutions in niche markets such as health and agriculture. This adds an additional complementary revenue stream that continues to see strong growth.

What about that 9.8% yield?

As Telus’s stock price dipped, the yield soared. As of the time of writing, Telus offers a massive 9.8% yield, making it one of the best-paying dividends on the market. That high yield raises questions about sustainability, and Telus has moved to shore up its dividend and make it more sustainable in the past year.

That includes freezing the company’s long-standing cadence of providing increases. Telus has, however, stopped short of slashing its dividend.

As Telus moves past this peak investment cycle, capital expenditures are expected to moderate. This coincides with expected drops in interest rates.

Over time, this shift could support stronger free cash flow in the years ahead. Concurrently, growth from Telus’s digital services teams will continue to grow, helping to balance the capital needs of the core telecom business.

In short, Telus offers one of the highest yields on the market, backed by multiple segments that are both stable and growing.

Why long‑term investors may want to buy Telus now

Long-term investors should look at the current 17% pullback as an opportunity for a compelling entry point. The long-term fundamentals of the company are sound, and both the digital and core subscription businesses continue to see strong growth.

As interest rates continue to decline, the stock price should recover, providing upside to more patient investors.

In my opinion, Telus is a Canadian dividend stock that should form a small part of any well-diversified portfolio.

The post A Canadian Dividend Stock Down 17% to Buy Forever appeared first on The Motley Fool Canada.

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• How to Make $300 Per Month Tax-Free From Your TFSA
• Beyond Telus: A High-Yield Stock Perfect for Income Lovers
• 2 Value Stocks With Dividend Yields Over 6.5% to Buy Near 52-Week Lows
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Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

Building a portfolio that can produce tax-free passive income is a dream of every investor. It’s also something that Canadian investors can achieve by using a Tax-Free Savings Account (TFSA) and investing in the right stocks.

That’s because the TFSA’s unique structure allows for every dollar contributed and dividend earned to be tax-free. Not only does this supercharge compounding, but it can also take the stress out of picking the right stocks to invest in over the long term.

There’s no shortage of great stocks on the market to start earning that tax-free passive income. Here’s a look at three options to consider buying that offer stability, diversification, and growing dividends.

Sun Life is a reliable dividend compounder

The first stock for investors seeking tax-free passive income is Sun Life (TSX:SLF). Sun Life is one of Canada’s most dependable financial companies with a portfolio covering insurance, wealth management, and asset management.

Sun Life’s portfolio includes operations not just in Canada, but also in the U.S. and in multiple Asian markets. That international exposure fuels long-term growth opportunities and provides a hedge against North American markets.

This gives Sun Life a unique and diversified earnings base that can withstand market volatility over longer periods. More importantly, that mix allows Sun Life to generate steady cash flow, which in turn supports its long history of paying and increasing dividends.

As of the time of writing, Sun Life offers a quarterly dividend with a yield of 3.99%.

For TFSA investors, Sun Life offers a blend of stability and compounding potential that makes it a strong anchor in any tax-free passive-income portfolio.

Telus offers long-term income

Investors seeking tax-free passive income from a TFSA should look closely at Canada’s big telecom stocks. Telus (TSX:T) in particular stands out as one of the most intriguing names for investors to consider.

Telus offers the typical bevy of subscription-based services to customers across Canada. Canadians rely on wireless, internet, TV and wireline segments daily, which translates into an impressive defensive moat.

For Telus, that defensive appeal means a recurring revenue stream that is both stable and predictable. More importantly, the essential service nature of those segments allows Telus to pay out one of the highest-paying yields on the market.

As of the time of writing, Telus’s yield works out to 10%.

Beyond the core telecom subscription segments, Telus has expanded into offering digital services to niche segments of the market in recent years. This includes areas such as healthcare and agriculture. These add an additional layer of diversification and open new avenues for growth.

For TFSA investors seeking tax-free passive income, Telus provides a dependable payout backed by a business model built on necessity and recurring demand.

Enbridge is the cornerstone income stock

One final pick for investors looking to establish a tax-free passive income stream is Enbridge (TSX:ENB). Enbridge is an energy infrastructure behemoth. The company operates one of the largest and most complex pipeline networks on the planet.

The pipeline business transports nearly one-third of all North American-produced crude and an equally impressive amount of natural gas. Both operate under long-term, regulated contracts, meaning that Enbridge generates predictable and stable cash flow year after year.

This consistency has allowed Enbridge to invest in growth and maintain one of the strongest dividend streaks in the country. As of the time of writing, Enbridge offers a yield of 5.16% and has provided investors with over 30 consecutive years of increases.

Beyond its core pipeline operation, Enbridge offers equally impressive segments that include both a natural gas utility and a growing renewable energy segment.

For TFSA investors, Enbridge remains a cornerstone holding for building reliable, tax-free passive income.

How to earn $2,400 a year in tax-free passive income

Enbridge, Telus and Sun Life are a diversified trio of stocks that can provide tax-free passive income. Earning $2,400 a year in passive income or more can easily be attained using the allocation below.

The post How Your TFSA Could Help You Earn $2,400 a Year in Tax-Free Passive Income appeared first on The Motley Fool Canada.

More reading

• This Monthly Income ETF Yields 3.5% — and it Deserves a Closer Look
• 2 Canadian Dividend Stocks That Could Belong in Almost Any Investor’s Portfolio
• 2 High-Yield Dividend Stocks That Could Be a Safer Pick for Canadian Retirees
• 4 Dividend Stocks I’d Happily Double My Position in Today
• The 3 Dividend Stocks I’d Recommend to Almost Any Canadian Investor

Fool contributor Demetris Afxentiou has positions in Enbridge. The Motley Fool recommends Enbridge and TELUS. The Motley Fool has a disclosure policy.

Most investors use their TFSAs for one clear objective: to establish a predictable, growing tax-free income stream. And while there’s more than a few stocks on the market that can cater to that goal, there is one that can offer consistent income, which makes it the perfect TFSA stock to own.

That stock is RioCan Real Estate (TSX:REI.UN), and here’s a look at why it belongs in your TFSA portfolio.

Why RioCan fits inside a TFSA

RioCan is one of the largest REITs in Canada, offering a portfolio of both commercial retail and mixed-use residential properties. As a TFSA stock focused on generating income, RioCan excels as a long-term pick.

For TFSA investors focused on long‑term passive income, RioCan offers one of the most dependable payout streams in Canada.

Part of the reason for that can be traced back to the properties that RioCan generates income from. The shift in recent years from less commercial retail and more towards residential has padded RioCan’s portfolio with more necessity-based tenants.

Not only does this bolster the defensive appeal of the REIT, but it also helps RioCan to continue generating a stable, recurring monthly income stream. Prospective investors should note that within a TFSA, both the contributions and dividends are completely tax-free.

For TFSA account holders who want to avoid volatility and prioritize predictable results, this combination of stability and tax‑free income is hard to beat.

A reliable 5.6% yield delivers steady income

RioCan offers investors a monthly distribution that, as of the time of writing, works out to an attractive 5.6% yield. This makes RioCan one of the better-paying options on the market, appealing for both those looking to draw on that income as well as those still building their nest egg.

By way of example, given the current yield and stock price, investors who purchase $7,500 worth of RioCan stock will generate more than one share a month through reinvestments alone.

As a core TFSA stock, it can quickly compound into a significant income stream over the longer term. In short, RioCan’s payout offers an attractive and steady paycheque that can support long‑term financial goals.

Inside a TFSA, RioCan’s monthly distributions can compound tax‑free, accelerating the growth of a long‑term income stream.

RioCan’s business supports long‑term income

RioCan’s portfolio is built around retail‑anchored and mixed‑use properties. Both have a strong emphasis on tenants that provide essential goods and services. This includes grocery stores, pharmacies, and other necessity‑based retailers that withstand economic slowdowns.

As a Canadian REIT with a defensive tenant base, RioCan provides the predictable cash flow that TFSA investors value most.

RioCan’s mixed-use properties have another advantage. Not only do the properties blend essential retail with residential units, but they are also located along transit corridors in major metro markets.

This bolsters both foot traffic and demand for those units, which, in turn, supports higher occupancy and rising rents. Adding to this, RioCan’s retail tenant mix includes some of the largest national retailers that come with longer-term leases.

This adds yet another attractive element for income-focused investors seeking that TFSA stock to own.

Why RioCan is the TFSA stock to buy now

For investors building a TFSA income strategy, RioCan offers a compelling combination of stability, yield, and long‑term reliability. And while every stock has some risk, RioCan’s large, defensive portfolio of quality tenants in prime markets minimizes that risk.

RioCan is a solid TFSA stock to add to any well-diversified portfolio. It can provide either a recurring income stream or the reinvested distributions to build one.

In short, RioCan stands out as a TFSA stock that can deliver consistent results for years to come.

The post A Perfect TFSA Stock: A 5% Yield with Constant Paycheques appeared first on The Motley Fool Canada.

More reading

• A Nearly Ideal Monthly-Paying REIT With a 5.5% Yield
• 1 Dividend Stock That Looks Like an Easy Decision to Buy on a Pullback
• Why This Steady 5.4% Yield Makes an Ideal TFSA Stock
• How to Turn Your TFSA Into a Reliable Monthly Income Machine
• How Splitting $30,000 Across Three TSX Stocks Could Generate $2,092 in Annual Dividends

Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.