A Tax-Free Savings Account (TFSA) is a way that Canadians can earn dividends and capital gains from an investment without worrying about paying taxes on that income. That makes it an ideal place to buy and hold long-term investments.
One stock that could be a good option for investors is Rogers Communications (TSX:RCI.B)(NYSE:RCI). The company’s business has been fairly resilient this year even amid the pandemic, with year-to-date sales of $10.2 billion, down a modest 8% from the same time last year.
And even though its earnings per share of $2.26 is 26% lower than it was a year ago, the company’s dividend still looks safe from a cash flow perspective. Over the nine-month period ending Sept. 30, Rogers still generated $3.4 billion in cash from its day-to-day operating activities – more than enough to cover not just its capital expenditures of $1.7 billion but also its dividend payments of $758 million.
That stability makes Rogers a great dividend stock to hold, especially over the long term. With a dividend yield of 3.3%, investing $10,000 can earn you $330 on an annual basis. Another good reason to buy the stock is investors have been bearish on Rogers this year, with its share price falling 7%, underperforming the TSX and its 3% returns.
However, as advertisers likely come back in 2021 and spend more and people are traveling and incurring more roaming charges, the company’s sales will get stronger and so will the outlook for the stock. Overall, Rogers is one of the TSX’s top blue-chip stocks and it could be a great investment to hang on to for decades.