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.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned.

More on Dividend Stocks

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Best Stock to Buy Right Now: Enbridge vs TC Energy?

Enbridge and TC Energy rebounded nicely over the past year. Are more gains on the way?

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

2 Utility Stocks That Are Smart Buys for Canadians in November

Are you looking for some of the smart buys to consider in November? These utility stocks offer growth and a…

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Is Power Corporation of Canada Stock a Buy for its 5% Dividend Yield?

Is Power Corporation of Canada (TSX:POW) stock's 5% dividend yield worth it? Discover why this resilient stock could be a…

Read more »

hand stacks coins
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These three dividend stocks are ideal for strengthening your portfolio and earning a stable passive income.

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer REIT Stocks to Buy Right Now for Less Than $200

REITs have long been touted as some of the best dividend stocks out there if you want recurring, strong income.…

Read more »