One Spectacular Dividend Inventory Yielding 6% That Deserves a Nearer Look

A 6% yield within the present atmosphere is troublesome to seek out. On the subject of telecom shares, Telus and BCE at all times steal the present. The fears of dividend cuts, excessive leverage, and the after-effects of the regulation change have affected their revenue margins and dividend-paying capability. However the different aspect of the regulatory change nobody is speaking about. Cogeco Communications (TSX:CCA) is a beneficiary of the rule change, and its 6% dividend yield deserves a more in-depth look.

Why this dividend inventory deserves a more in-depth look

The rule change allowed Cellular Digital Community Operators like Cogeco, which don’t personal fibre infrastructure, to lease community entry from Cellular Community Operators like BCE and Telus. In August 2025, Cogeco launched its Canadian wi-fi service, Cogeco Cellular, throughout 12 markets in Ontario and Quebec.

Cogeco Cellular requires no commitments from clients. Furthermore, it doesn’t cost activation charges or shock overage. It’s bundling wi-fi service with its present Cogeco residential web subscriptions for bundle reductions.

Because it has an asset-light mannequin, the debt burden is comparatively much less. Its web debt is 3.2 instances its Adjusted Earnings Earlier than Curiosity, Taxes, Depreciation, and Amortization (EBITDA), nearer to Telus’s 3.5 instances. Nonetheless, Cogeco’s excessive ratio is due to a 5.3% decline in Adjusted EBITDA as a result of an accounting remedy.

Cogeco acknowledged $1.8 million and $3.5 million of expertise licensing prices for its wi-fi operations as working bills through the three- and six-month intervals ended February 28, 2026, respectively. Earlier, when Cogeco was organising the wi-fi enterprise, it reported this expense underneath ‘Acquisition, integration, restructuring, and different prices’, which didn’t have an effect on its EBITDA. The accounting remedy has modified the leverage ratio, however debt is at manageable ranges.

One spectacular dividend inventory yielding 6%

Cogeco is a beautiful dividend inventory. It has been rising dividends at a mean annual price of 10% for the final 11 years. In 2026, it grew its dividend by 7% to $3.95 per share. This dividend makes up for 30% of its free money stream per share. That may be a secure ratio, giving Cogeco ample house to develop its dividends even when income falls.

Not like BCE and Telus, Cogeco doesn’t supply a dividend reinvestment plan. Nonetheless, its excessive dividend yield and development price make it price contemplating in your passive revenue portfolio.

Tips on how to put money into Cogeco

Cogeco inventory fell 20% on March 26, triggered by information that institutional shareholder CDPQ is rebalancing its fairness stake. This dip has created a shopping for alternative for dividend seekers to lock in a 6% yield. Take into account investing a lump sum quantity within the inventory earlier than it recovers.

A bit of over $6,000 funding immediately should buy you 91 shares of Cogeco, which may earn $359 in annual dividends. You need to use these dividends to purchase different development shares and develop your portfolio.

Assuming Cogeco grows its dividend by 6% yearly, these 91 shares may give you $453 in annual dividends by 2030. Take into account investing by means of a Tax-Free Financial savings Account to keep away from dividend tax.