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TFSA Investors: 3 Income Stocks to Buy Now and Own for 15 Years

Andrew Walker
Cogs turning against each other

Pensioners and other income investors are using their TFSAs to get the most out of their savings.

One popular strategy involves owning reliable dividend stocks that have strong track records of providing steady payouts. Let’s take a look at three companies that might be interesting picks right now for an income portfolio.

Bank of Montreal (TSX:BMO)(NYSE:BMO)

Bank of Montreal might be the Goldilocks pick among the Canadian banks right now with a balanced revenue stream from three main segments in the market, including wealth management, capital markets, and personal and commercial banking. The company has a small relative exposure to the residential housing market, and its U.S. operations provide a nice hedge in the event the Canadian economy runs into trouble.

Bank of Montreal has paid a dividend every year since 1829, and investors should see the trend continue. The stock isn’t as cheap as it was last December but still trades at a reasonable 11.8 times earnings. Investors who buy today can pick up a dividend yield of 3.9%.

Suncor Energy (TSX:SU)(NYSE:SU)

Suncor is a giant in the Canadian energy sector with an integrated business model that is somewhat unique. The company is best known for its production assets, but it also owns refining and retail businesses. These “downstream” assets can generate decent margins when oil prices fall, providing a balanced cash flow stream at all points of the commodity cycle.

Suncor has a strong balance sheet and can buy up troubled assets when the market hits a rough patch. The board raised the dividend by nearly 17% for 2019, and Suncor has an aggressive share-buyback program. The stock appears somewhat oversold right now and the dividend provides a 3.8% yield.

Shaw Communications (TSX:SJR.B)(NYSE:SJR)

Shaw just unloaded its remaining shares in Corus Entertainment for gross proceeds of roughly $550 million. The company intends to use the funds for general corporate purposes, which could include reducing debt and funding the build-out of its mobile network. Shaw entered the mobile game in the past couple of years when it bought Wind Mobile. The division is now called Freedom Mobile, and Shaw is investing the capital required to make it a national competitor.

The addition of the mobile business allows Shaw to provide full TV, internet, and mobile bundles to its clients. This should help slow losses on cable subscriptions and potentially attract new internet customers.

Shaw pays its dividend monthly. The current distribution provides an annualized yield of 4.4%.

The bottom line

Bank of Montreal, Suncor, and Shaw Communications are all quality dividend picks that deserve to be on your radar. Allocating an equal investment to each of the three companies would be an easy way to launch a diversified TFSA income portfolio.

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Fool contributor Andrew Walker has no position in any stock mentioned.

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