Our new FREE report, “Dividend Paying Stocks: How High Dividend Stocks Can Supercharge Your Income Investing,” is packed with all the advice and information you need to pick the right Canadian dividend stocks for your portfolio—and avoid the ones that could steer you into a financial disaster.

Best of all, the report gives you full details on 4 of our favourite high dividend stocks, a dividend paying stock for aggressive investors—and 5 high dividend stocks you must avoid. Click here to download your FREE copy and get started right away.

One of our favourite Canadian dividend stocks continues to boost its payout

One of the Canadian dividend stocks we recommend in this new FREE report is Telus Corp. (symbols T and T.A on Toronto). Telus is Canada’s second-largest telephone company after BCE Inc. (Toronto symbol BCE).

The company has been expanding its wireless operations over the past few years. As a result, it now gets 52% of its earnings from its 7.0 million wireless subscribers across Canada. The remaining 48% comes from its traditional phone business, which has 3.7 million customers in B.C., Alberta and eastern Quebec. Telus also has 1.2 million Internet subscribers.

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Telus continues to benefit from strong demand for smartphones. These devices, which the company typically sells under long-term contracts, now account for 38% of Telus’ wireless subscribers, up from 22% a year earlier. Telus is also gaining from rising sales of touch-screen tablet computers, such as the Apple iPad. That’s helping the company increase its revenue from wireless data.

The company recently raised its quarterly dividend by 4.8%, to $0.55 a share from $0.525. The new annual rate of $2.20 yields 4.1% (4.2% for the non-voting “A” shares).

Dividends can now provide up to a third of your investment return

Like Telus, many Canadian dividend stocks are maintaining or raising their dividend payments. That’s because more investors are paying attention to dividend yields (a company’s total annual dividends paid per share divided by the current stock price) as stock markets continue to recover.

That’s good news for investors, because dividends are more dependable than capital gains as a source of income. A couple of decades ago, you could assume that dividends would contribute up to a third of your long-term investment returns, without even considering the tax-cutting effects of the dividend tax credit.
Earlier in this decade, dividend yields were generally too low to provide a third of investment returns. But now that yields have moved up and interest rates have moved down, it’s realistic to assume they will once again contribute as much as a third of your total return.

How we zero in on the best Canadian dividend stocks

Of course, high dividend yields are a big plus, but you should avoid buying stocks for this reason alone. That’s because the high dividend yield could be the result of a drop in the share price.

If the share price remains low, a high dividend yield could be an indication of much deeper problems. It may also mean that insiders are selling the stock due to bad news that is not yet widely known. In cases like this, it may be only a matter of time before the company cuts, or even halts, its dividend payments.

That’s why you have to look at a stock’s dividend yield in context with other factors, such as its profitability and market position. We give you full details on some of the things we look for in the best dividend paying stocks absolutely FREE in “Dividend Paying Stocks: How High Dividend Stocks Can Supercharge Your Income Investing.”

As a member of TSI Network, you may have already seen this new FREE report. If you haven’t, click here to download your copy today.