If you happen to’re on the lookout for passive revenue that rolls in like clockwork, there’s one Canadian dividend inventory I’d take into account placing my total Tax-Free Financial savings Account (TFSA) into. That’s TELUS (TSX:T). With a juicy yield hovering round 7%, it pays out dividends each quarter, and its consistency makes it really feel like getting paid month-to-month. For long-term buyers chasing revenue with out the drama, TELUS is price severe consideration.
About TELUS
TELUS is certainly one of Canada’s Large Three telecom suppliers. It handles wi-fi, web, and TV providers for thousands and thousands of Canadians. Whereas it may not sound thrilling, that’s type of the purpose. Individuals want to remain related it doesn’t matter what’s taking place within the financial system. That offers TELUS the type of stability buyers love when constructing a dependable revenue stream.
As of writing, TELUS trades at round $22.55 per share. Its annual dividend is $1.66 per share, which provides it a ahead yield of roughly 7.36%. That’s effectively above the TSX common. And this isn’t a dangerous firm dangling a excessive yield to draw consideration. TELUS paid and raised its dividend steadily for greater than a decade. Even through the COVID crash and inflation spikes, it continued sending money to shareholders.
The newest earnings report got here out in early Could and confirmed TELUS nonetheless holding its floor regardless of a troublesome surroundings. The dividend inventory introduced in $5.06 billion in income for the primary quarter of 2025. That’s up 3.8% 12 months over 12 months. Earnings per share (EPS) got here in at $0.26, barely forward of analyst estimates. TELUS now has over 18 million buyer connections throughout cellular, web, safety, and well being platforms.
Branching out
Whereas telecom is the core enterprise, TELUS is branching out in sensible methods. It’s investing closely in TELUS Well being and TELUS Agriculture & Shopper Items, each of which have international potential. In truth, TELUS Well being is now certainly one of Canada’s largest digital well being service suppliers, utilized by over 80,000 employers worldwide. The dividend inventory sees this as a key progress engine and a technique to cut back its reliance on conventional telecom.
Another excuse I’d go all-in on TELUS in a TFSA is the character of dividend taxation. Usually, dividends from Canadian firms are taxed at a beneficial charge in a non-registered account, however inside a TFSA, they’re fully tax-free. Which means for those who put $50,000 into TELUS at present, you’d gather about $3,264.34 per 12 months in tax-free revenue with out lifting a finger.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| TELUS | $22.50 | 2,222 | $1.47 | $3,264.34 | Quarterly | $49,995.00 |
Issues
Some buyers have been nervous about TELUS’s rising debt. The dividend inventory has been spending billions on increasing its fibre optic community and rolling out 5G infrastructure. However it’s doing this to future-proof the enterprise and preserve prospects happy. TELUS’s capital investments are excessive now, however over time, these investments ought to translate into greater margins and extra secure money move.
Talking of money move, TELUS generated over $3.1 billion in free money move in 2024. That’s necessary as a result of it exhibits the dividend is well-supported. The dividend inventory’s payout ratio was about 87% in 2024, which is a bit excessive however manageable contemplating the regular money coming in from prospects and the corporate’s long-term progress initiatives.
Proper now, TELUS is planning to extend its dividend yearly between 5% and seven% by a minimum of 2026. That type of transparency is uncommon. Most firms don’t give dividend progress steerage. TELUS does as a result of it is aware of buyers depend on that revenue. It’s a part of why I’d really feel snug going all-in on this inventory inside a TFSA.
Backside line
For buyers constructing a long-term, tax-free passive-income stream, TELUS checks all of the packing containers. It’s secure, it’s beneficiant, and it’s aiming greater. That 7% yield appears particularly interesting when you think about it comes from a dividend inventory that retains rising and innovating. If I may solely decide one dividend inventory for my TFSA proper now, this could be it.
