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TFSA Investors: 3 Wealth-Securing Dividend Stocks Yielding up to 6.8%

Brian Pacampara, CFA
Various Canadian dollars in gray pants pocket

Hi there, Fools. I’m here again to call your attention to three high-yield dividend stocks. As a reminder, I do this because stocks with mouth-watering yields

  • provide a healthy income stream in both good markets and bad markets; and
  • tend to outperform market averages over the long haul.

The three stocks below offer an average dividend yield of 4.97%. If you spread them out evenly in an average $27K TFSA account, the group will provide you with an annual income stream of $1,620 — on top all the appreciation you could earn.

Let’s get to it.

Renewed outlook

Leading our list is renewable energy company TransAlta Renewables (TSX:RNW), which currently boasts a fat dividend yield of 6.8%.

TransAlta’s payout might be large, but it’s heavily supported by a regulated utility environment, stable cash flows, and steady project growth. In the most recent quarter, revenue improved slightly, EPS jumped 11.5%, and distributable cash clocked in at a solid $92 million.

“Results in the first quarter were a great way to start off the year,” said President John Kousinioris. “We are excited to commission our two U.S. wind projects later this year and continue to be focused on adding new accretive projects to the fleet.”

TransAlta shares are up an impressive 34% so far in 2019.

Bankable income

With a healthy dividend yield of 3.9%, financial services giant Bank of Montreal (TSX:BMO)(NYSE:BMO) is next up on our list.

Despite its massive size, BMO continues to post solid growth for investors. In the most recent quarter, income improved 20%, revenue increased 8%, and return on equity came in at a respectable 13.6%.

Based on that fundamental strength, management boosted the quarterly dividend 7% to $1.03 per share.

“This growth is supported by our strong capital position, a stable credit environment, and the continued resiliency of the Canadian and U.S. economies,” said CEO Darryl White. “We are taking disciplined actions to grow each of our businesses, including optimizing our teams and developing innovative solutions that enhance customer experience.”

BMO shares are 12% in 2019.

Natural choice

Capping off our list of high yielders is resource giant Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ), which currently offers a juicy dividend yield of 4.0%.

CNQ’s healthy payout continues to be backed by massive scale advantages, attractive assets, and hefty cash flow. In Q1, the company generated $996 million in operating cash flow, $2.2 billion in adjusted funds flow, and saw its profit jump 65%.

In fact, a recent 12% boost to the quarterly dividend represents CNQ’s 19th straight year of payout growth.

“Operations were strong in the first quarter as our large, balanced and diverse asset base allowed the company to strategically manage through the mandatory production curtailments to maximize value,” said President Tim McKay.

CNQ shares are up 9% so far in 2019.

The bottom line

There you have it, Fools: three top high-yield stocks worth checking out.

As always, don’t view them as formal recommendations. Instead, look at them as a starting point for more research. A dividend cut (or halt) can be especially painful, so you’ll still need to do plenty of due diligence.

Fool on.

More reading

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. 

 

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