This Ignored Telecom Stock May Be the Cure for the Dividend Blues

Looking for a reasonably priced stock with a decent dividend yield?

It is getting to be a tall order.

Spooked by volatile markets, investors have piled into "stable" income investments this year, utilities chief among them. For the year to date, the benchmark Utilities Sector SPDR Exchange-Traded Fund has gained more than 17%, a rise that has lowered its yield to 3.1% from 3.7%.

But there is still one place to find attractive income opportunities, and it is somewhere few Americans think to look: Canada.

Many U.S. investors see Canada only as the home of the depressed Alberta oil sands. But there is a lot more to the country's economy than that.

Outside the energy sector, there are plenty of superb investments, including dividend-paying stocks trading at attractive prices.

Better yet, many of these companies trade on U.S. exchanges.

Case in point: Telus  (TU) , which has 8.4 million wireless subscribers, 1.6 million high-speed Internet users, 1.4 million land line connections and 1 million television subscribers across Canada.

Telus shares sport a forward price-earnings ratio of 15.8, a discount to the company's two main Canadian competitors, BCE, at 17.3, and Rogers Communications, at 18.9.

Buying Telus gives investors a 4.2% dividend yield and a record of strong payout growth. The company often hikes its quarterly dividend twice a year and has done so at a 13% annualized clip over the past five years, in Canadian dollars.

By contrast, its U.S. cousins, AT&T and Verizon Communications, have increased their payouts by 2.3% and 3.2% annualized, respectively, over the same time frame.

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