As far as telecommunications stocks go, Telus Corporation (TSX:T)(NYSE:TU) is one of my top value picks for investors looking for a safe dividend yield and a relatively stable long-term growth rate.
This is a company which is a broadly unloved by financial markets. It appears many investors have determined that mid-range dividend companies with reasonable growth rates are boring, relative to other high-flying growth stocks that have taken off to the stratosphere of late.
Telus’ dividend yield has been floating above 5% for some time, and is generally among the safest yields on the TSX today. This makes Telus’ stock a bond-like proxy. I am surprised to see the stock trading at these levels.
In normal conditions, I believe we would see a substantial amount of capital appreciation from these levels, so I do think patient investors are likely to be rewarded from picking up shares of Telus at these levels.
As compared to other companies and sectors that are likely to see a significant negative impact from the COVID-19 pandemic, Telus is relatively immune to such forces and is thus a great defensive pick as well. Data usage continues to increase, and I expect this secular trend to continue over the long-term, boosting the company’s future earnings potential. This will be further helped along by its 5G rollout.
Invest wisely, my friends.
