When picking stocks for your retirement portfolio, it’s important that you have a long-term horizon. Once you have the next 10, 20, or 30 years on your side, you have a much better chance of building wealth by investing in top companies with wide economic moats.
Here is a top dividend stock that offers a great potential to multiply your wealth if you plan to invest in it for the long-term.
Rogers Communications Inc.
Rogers Communications Inc. (TSX:RCI.B)(NYSE:RCI) is an attractive dividend stock to hold in your retirement portfolio. Rogers is Canada’s second-largest telecom company, but it has the largest market share of the country’s growing wireless segment, dominating about a third of the market’s revenue and subscribers.
If you’re not familiar with the Canadian telecom market, then you should make a note that it’s very different from what we have south of the border. Here, the market is mainly controlled by three top players who serve a growing population with strong demand for wireless services.
Rogers drives about 57% of its revenue from the wireless segment of its business. This segment has been under pressure ever since Shaw Communications Inc. acquired Wind Mobile, challenging the dominance of the “Big Three” players.
But data from the company’s second-quarter earnings report show that Rogers is doing a good job of adding new wireless subscribers. In that quarter, Rogers’ wireless division added 122,000 net new postpaid wireless subscribers, the most for a second quarter in nine years.
The number of Rogers internet subscribers rose by 23,000 in the three months ended June 30, the most for a second quarter since 2005. Post-paid churn for wireless customers declined to 1.01%, showing that consumers are sticking with the company. On that metrics, it was the best quarter in nearly a decade.
These results show the company’s ability to churn out cash each quarter and deploy it for growth and payout distribution.
Rogers’s stock currently offers an annual dividend yield of 2.82%, the lowest among the Big Three telecom operators. Rogers hasn’t increased its dividend since the first quarter of 2015, when it boosted its quarterly payout by 5% to $0.48 a share.
But that doesn’t tell us the complete story. On a total returns basis, Rogers produced 52% during the past five years — the highest return when compared to other players.
The bottom line
Rogers Communications is a solid dividend stock that could provide stable income and growth to your portfolio. But as I emphasized earlier, the stock isn’t a short-term bet. You should be prepared to hold this stock for the next 10 to 20 years if you want to double your money.
