Trying to find a dividend stock that pays a high yield and that’s safe is no easy task. And finding one that also has a strong reputation for increasing its payouts over the years is even more rare.
However, there’s a top TSX stock that ticks off all those boxes: BCE Inc. (TSX:BCE)(NYSE:BCE) currently pays its shareholders a quarterly dividend of $0.8325. At a share price of around $57, you’re earning a yield of over 5.8% per year. A year ago, that dividend was $0.7925 and it’s increased 5% since then. In three years, the company’s payouts have grown over 16% from the $0.7175 BCE was paying back in 2017.
Despite COVID-19, BCE’s dividend still looks to be safe. The company recently released its Q2 results where revenue of $5.4 billion was down a relatively modest 9.1% year over year amid lower activity levels. And even with impairment charges totaling $452 million,
BCE still recorded a profit of $294 million. Although it was a 64% decline from the prior-year period, the company still believes that its dividend is in good shape.
And indeed, that appears to be the case. Despite the decline in profits, the company’s free cash flow of $1.6 billion was up 49.7% from $1.1 billion in the same period last year.
Year to date, share of BCE are down around 6%, slightly worse than the TSX’s 3% decline in 2020. Trading at around 20 times earnings and three times book value, this is a decently priced dividend stock that you can hold on to for years, possibly even decades.
