A Canadian Dividend Stock from Jim Cramer

Nearly halfway through 2010, investors are once again faced with market losses. The Dow Jones index is down 2.6%, while the S&P 500 index has fallen 3.7%. Unfortunately there is not a lot of positive economic news to lift investor’s spirits either.


Hedge fund and money manager may push the markets a little higher over the next few days. However, Mad Money host Jim Cramer believes that will be completely driven by funds positioning their quarter end holdings. Investors shouldn’t pay too much attention to the short-term swings, because “there is not much growth in this country”, says Cramer.


Fortunately there is an option for investors that are looking for growth. The Canadian economy seems to be in full recovery mode with a strong currency and bright economic outlook.


Cramer’s favorite Canadian dividend stock is Telus Corp [[TU]]. The Canadian telecom offers investors an impressive 5.0% dividend yield and generated $2.65 billion in operating cash flow last year. That would indicate that the dividend is very safe, since TU only pays out $600 million each year in dividend payments.


Cramer pointed out that Telus currently has a 28% market share in Canada, which is one of the few remaining growth markets in the world. Surprisingly, only 68% of Canadians currently own cell phones. This has helped Telus avoid some of the headaches faced by AT&T [[T]], whose customers constantly complain about service overloads.


Telus shares are already up 20% in 2010 and Wall Street expects the telcom company to grow earnings by over 6% next year.


If you enjoyed this article then we invite you to subscribe to our free dividend newsletter.


Leave a Response: