TORONTO, Jan 15, 2026, 11:59 (EST)
Motley Fool Canada’s Joey Frenette pointed out that investors attracted to Telus Corp’s roughly 9% dividend yield should weigh options carefully and consider Canadian Imperial Bank of Commerce for a more stable income stream. He noted Telus has paused dividend growth until certain internal goals are met. Meanwhile, CIBC offers about a 3.4% yield and trades at roughly 13.3 times forward earnings, a valuation based on expected profits. Frenette also highlighted that although CIBC’s shares have jumped since late 2023, the bank’s sizable Canadian mortgage portfolio remains a critical risk factor. (Market Wire News)
Timing is key since early January marks when many Canadians revisit their TFSA, the tax-free savings account, alongside their RRSP, the primary registered retirement savings plan. Telus’s yield remains high, driven by a share price that’s still under pressure, making the telecom a draw for income-focused investors despite ongoing volatility.
The same writer singled out SmartCentres Real Estate Investment Trust and furniture retailer Leon’s Furniture as options for investors seeking less volatility than Telus. SmartCentres, a REIT that owns properties and pays cash distributions, offers a yield around 6.91% and carries a beta of 0.90 — a measure of stock price swings compared to the broader market, he noted. Leon’s Furniture yields roughly 3.36%; its shares trade about 5% below record highs and roughly 11.2 times trailing earnings. The company is also considering a REIT spin-off, according to the column. (Market Wire News)
Back in December, Telus flagged a pause on dividend growth but confirmed it would keep paying a quarterly dividend of C$0.4184 per share. The company also started scaling back its discounted dividend reinvestment plan, or DRIP. CEO Darren Entwistle said then, “It is our intention to continue paying the dividend at its current nominal level,” noting growth would be on hold until the share price and dividend yield better align with its outlook. Alongside this, Telus outlined targets to deleverage and set a three-year free cash flow growth goal aimed at shrinking net debt relative to earnings. (TELUS)
Telus’s dividend appeal carries some downside. Canada’s telecom scene is controlled by Telus, BCE, and Rogers. The sector has wrestled for months with rising borrowing costs and worries over customer losses, all while regulators press for price cuts.
Banks tell a different dividend tale: their yields tend to be lower than Telus’s, but they deliver payouts on a steadier schedule linked to the credit cycle. Among CIBC’s peers in the “Big Six” — Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal, Scotiabank, and National Bank — these names remain key for income portfolios, particularly for those seeking a blend of dividends and share price momentum.
Dividend yield boils down to basic math — annual cash payout over share price — which explains why it jumps when a stock drops. But yield by itself can be deceptive; a high yield might signal a bargain or a red flag, depending on whether cash flow holds steady.
The risk scenario is clear: Telus might come under renewed strain if earnings or cash flow fall short, increasing the chances of a dividend cut despite management’s current commitment to maintain payouts. CIBC and other banks risk damage if mortgage delinquencies climb or capital markets lose momentum. REITs could falter if refinancing costs remain elevated or tenants ease off, while consumer-focused companies like Leon’s often bear the brunt quickly when spending slows.
SmartCentres and Leon’s operate in distinct parts of the economy — retail real estate on one hand, household discretionary spending on the other — yet both hinge on stable conditions. Any dip in consumer spending, weaker lease renewals, or a steeper slowdown could challenge the “safer than Telus” claim that keeps popping up in income-stock discussions.
The latest dividend talk isn’t about finding a single perfect stock. Instead, it’s pushing investors to hedge their bets. Telus still grabs attention as a high-yield standout, but the focus is turning to balance sheets, payout sustainability, and whether income should be spread across banks, property trusts, and more cyclical names.
