That’s because Telus has suspended its semi-annual dividend increases, causing investors to look elsewhere for growth instead of investing in Telus shares. Telus remains a reliable telecom provider, but the dividend freeze raises questions about its growth trajectory.
An alternative that investors can consider is Toronto Dominion Bank (TSX:TD). This is why bank stocks may be the better option over Telus stock right now.
Meet TD Bank
TD is one of the major banking stocks. In fact, it is the second largest of the major banks in Canada. TD operates large segments in both Canada and the US, with the domestic business providing stability and the international segment providing growth.
That duopoly of stability and growth is something investors will appreciate compared to Telus stock.
TD’s international growth in the US is itself an intriguing option. The bank expanded that segment in the years after the Great Recession by stitching together a series of smaller acquisitions.
Today, that office network surpasses its domestic counterpart in number of locations and stretches from Maine to Florida along the East Coast.
More importantly, this segment serves millions of customers and accounts for billions in loans and deposits.
That’s not to say TD’s domestic segment should be dismissed. The Canadian banking segment is responsible for the majority of the bank’s revenues and allows the bank to invest in growth and pay a very nice dividend (more on that later)
In its most recent quarterly update, the domestic segment posted net income of $1.9 billion on record revenue of $5.3 billion.
Between its diversified and defensive business model, ample growth potential, and great results, there are more than a few reasons to buy TD over Telus stock.
The real reason you want to invest in TD
One of the main reasons why investors love TD as an investment is the quarterly dividend. The bank is a beacon of stability in this area, with more than 165 years of continuous payments behind it.
Additionally, TD has delivered annual dividend increases without fail for more than a decade. In fact, the most recent increase was announced this month, up 2.9%.
At the time of writing, TD’s dividend has a yield of 3.4%. Potential investors should note that TD’s payout is between 40 and 50%, giving it a more sustainable appeal compared to Telus stock.
Are you now buying TD through Telus Stock?
No share is without risk. Investors learned this lesson recently when Telus announced it would freeze its popular semi-annual dividend increase. This caused Telus shareholders to look for better options such as TD.
TD offers a perfect balance between defensive appeal, growth prospects, reliable income generation and a stable dividend.
Buy it, hold it and watch your well-diversified portfolio grow.
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