How Telecom sector may provide solid dividend growth potential

One of my investing strategies is to diversify across several sectors of the stock market. Among all sectors, I think Telecom sector is going to be thriving in coming years. Whatever we do these days, seems like all somehow depends on consuming more and more data and internet time. Also assuming, with time, most of the jobs will be remote in nature, so people will need ever increasing access to internet.

With the advent of 5G, personal and business data consumption will be a big source for telecom giants like AT&T, Verizon, Comcast etc. Although developing infrastructure for telecom companies is capital intensive but a steady revenue somehow seems like offset that burden. I don’t think this sector went slump like energy sector in past many years.
My personal investing strategy is geared towards more on dividend growth side. I have many growths only stocks in my portfolio but try to keep them no more than 25 percent. One of the characteristics of large telecom stock is to reward stockholders with solid year after year dividends. Although the stock price growth of these stocks is not stellar like Amazon or Netflix but reinvested dividend often may compensate for that.

Recently, I did some research to find good telecom stocks from US and Canada. I find Canadian stock market quite stable but often ignored by investors for States. Here is the list I added to my portfolio in this month:

Here is the dividend yield I got at the time of the purchase which I thinks is sweet!

In addition to high dividend yield, most of these stocks also saw significant appreciation of price in the last 10 years. So, although I am categorizing them as high dividend earners, but they are somewhat growth stock as well. To me that’s the best of both world!

Usually I like to invest in stocks with  P/E ratio of 16 or below. This gives me an approximate idea that I am not buying something overvalued, specially considering the long bull run we had in last 10 or so years. At the time of my purchase all of them we below 16 which I think is a fair valuation.

In this year, I am planning to add more of these telecom stocks in my portfolio. I may also do some research to see if there are good telecom stocks to buy from Europe or Japan.

That’s all for today! Thanks.

Disclaimer: This article shows my personal opinion and its for entertainment purpose only. This is no way professional financial advice. You may seek professional advice or conduct own research before investing.

Image Courtesy: Karolina Grabowska from Pixabay


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