Want $112 in Monthly Income? This Stock Is a Long-Term Dividend Beast

This stock is among the best long-term monthly dividend stocks on the TSX today! Now is the time to load up your RRSP with shares of this gem, before shares pop in 2021.

| More on:

Those with $25,000 in RRSP contribution room looking to generate monthly income could have an extra $112 per month with this Canadian stock.

Shaw Communications (TSX:SJR.B)(NYSE:SJR) has been a top pick of mine in the past due primarily to the company’s impressive monthly dividend yield. The Canadian telecommunications sector is one which is hard to invest in. Picking a winner among the “Big Four” players in this space is often the most difficult task. Indeed, Shaw has lagged its peers of late in terms of valuation, making Shaw an underperforming asset in 2020. That said, I think 2021 and beyond could be a lot different for this smaller, leaner 5G player.

Sector fundamentals bullish for long-term investors

RRSP investing requires putting money to work over many years or decades. Picking a stock that one can rely on for monthly income in retirement requires a significant margin of safety. I think telecom players in general provide this for investors. Specifically, Shaw tops the list from a dividend perspective right now for those income-oriented investors nearing retirement.

The telecom sector provides some of the best low-volatility, high cash flow and reasonable valuation stocks on the TSX today. This sector provides some of the best risk-adjusted returns for investors worried about where valuations are right now. Additionally, high dividend yields provide another layer of safety and entice income-oriented investors to continue to buy over time.

Shaw’s fundamentals are extremely bullish for long-term investors seeking such investments today. Shaw’s portfolio of assets is trading at a significant discount to other similar long-life assets in other sectors. Furthermore, the company’s stock trades at less than 17 times earnings, despite strong and stable cash flow generation through this pandemic. Shaw’s core business is relatively recession-proof, furthering the long-term investing thesis for those worried about volatility on the horizon.

5G rollout an undervalued long-term growth catalyst

One of the biggest knocks against Shaw is the company’s slower 5G rollout than its peers. The owner of Freedom Mobile, Shaw’s opportunity is centered on Western Canada. The company expects to have its 5G network online sometime in the next few months. This rollout has lagged its peers, many of whom have impressive offerings online right now.

That said, I think Shaw’s positioning in the market as a low-cost player will provide sufficient wiggle room for subscribers to be patient with this rollout. Additionally, Shaw’s 5G rollout is expected to cost substantially less than its peers. Lower-expected spectrum costs combined with a stronger balance sheet than many of its peers is bullish for those looking for long-term growth at a reasonable price today.

Shaw is simply one of the best monthly income investments dividend investors could ask for right now. Accordingly, I’d recommend RRSP investors consider this stock at these levels, before this stock jumps higher when the company launches its 5G platform.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Dividend Stocks

investment research
Dividend Stocks

Best Stock to Buy Right Now: TD Bank vs Manulife Financial?

TD and Manulife can both be interesting stock picks for today, depending on your investment style.

Read more »

A worker gives a business presentation.
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

These stocks are out of favour but could deliver nice returns over the coming years.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 5.5 Percent Dividend Stock Pays Cash Every Month

This defensive retail REIT could be your ticket to high monthly income.

Read more »

Confused person shrugging
Dividend Stocks

Passive Income: How Much Do You Need to Invest to Make $600 Per Month?

Do you want passive income coming in every single month? Here's how to make it and a top dividend ETF…

Read more »

Canadian Dollars bills
Dividend Stocks

3 Monthly-Paying Dividend Stocks to Boost Your Passive Income

Given their healthy cash flows and high yields, these three monthly-paying dividend stocks could boost your passive income.

Read more »

Make a choice, path to success, sign
Dividend Stocks

The TFSA Blueprint to Generate $3,695.48 in Yearly Passive Income

The blueprint to generate yearly passive income in a TFSA is to maximize the contribution limits.

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »