If you’ve ever dreamed of early retirement, you’re not alone. According to a recent Gallup poll, 70% of people in North America hate their jobs. That’s a lot of unhappy workers. Even if you have no desire to stop working, having the financial option to retire is a worthwhile goal.
Before you quit your day job, you’re going to need to replace a substantial portion of your monthly income. One of the best ways to earn passive income is to invest in high-quality, dividend-paying companies. Every quarter these dividend juggernauts pay a reliable dividend that grows consistently.
Multi-year dividend growth program
Eight years ago Telus Corporation (TSX:T) introduced a multiyear dividend growth program. The current dividend of 4.59% represents a 7.1% increase and the 17th semi-annual increase since the program began. During the past 15 years, TELUS has returned nearly $17 billion to shareholders, including $11.5 billion in dividends.
Regarding the continued dividend growth, CEO Darren Entwistle says, “We are adamant about the 7% to 10% annual expansion and CAGR associated with that.”
In the first quarter, the company’s net income of $437 million grew by 6.1 per cent over the same period last year. The consolidated operating revenue increased 3.8% and EBITDA was up 8.6%.
One of the ways in which telecommunications companies measure their success is the churn rate. The churn rate represents the number of customers leaving the service — usually to sign up with a competitor — and is a good measure of customer loyalty. Telus leads the industry with a mobile phone churn rate of 1.02%, an eight-basis point improvement over last year and a record low for the company.
As the demand for wireless data continues to increase, Telus is gearing up for their transition to 5G. This fifth-generation cellular wireless will offer greater speed, lower latency (more responsiveness), and the ability to connect a greater number of devices at once.
The company is making huge investments as it prepares to roll out 5G, including the acquisition of important 600-megahertz spectrum licenses covering British Columbia, Alberta, Eastern Ontario, and Southern and Eastern Quebec. This spectrum supports the delivery of enhanced mobile and broadband connectivity to rural communities.
19 years of dividend increases
TC Energy Corporation (TSX:TRP) is one of North America’s leading energy infrastructure companies, with a market cap of $46.7 billion. The company has increased its dividend for each of the past 19 years. The current dividend is 4.62%.
In May the company changed its name from TransCanada to TC Energy to more accurately reflect its aggressive growth plans throughout all of North America, not just Canada. Currently TC Energy supplies more than 25% of the natural gas consumed daily in North America.
Last year the company generated $8.5 billion EBITDA through its $100 billion infrastructure portfolio. The company has a long list of secured capital projects scheduled to enter service in the next five years. Over 90% of the company’s earnings can be attributed to these long-term service contracts or rate-regulated businesses. The company also has over $20 million of projects under development, including the controversial Keystone XL Pipeline.
The bottom line
Telus and TC Energy are what I consider to be dividend juggernauts, companies that pay a hefty dividend with a long track record of regular dividend increases. Both companies are investing heavily in infrastructure projects that will continue to pay off for years to come and ensure dividend increases for the future.
