Income Investors: 2 High-Yield Monthly Dividend Stocks for Your TFSA Today

Canadian income investors are searching for reliable dividend stocks to help boost their monthly income. This wasn’t always the case, but low interest rates mean GICs and savings accounts no longer provide the returns many pensioners need.

Let’s take a look at Inter Pipeline Ltd. (TSX:IPL) and Altagas Ltd. (TSX:ALA) to see why they might be interesting picks right now.


IPL owns natural gas liquids (NGL) extraction facilities, conventional oil pipelines, oil sands pipelines, and a liquids storage business in Europe.

The stock is down 15% in 2017 amid a pullback in the broader energy sector, but the sell-off might be overdone.


IPL continues to deliver strong results. Net income in Q1 2017 hit a record $140 million, supported by improved results in the NGL processing, conventional oil pipelines, and oil sands pipelines.

The company has taken advantage of the downturn in the energy sector to add strategic assets that should position the business for future growth. For example, IPL purchased two NGL extraction facilities last year for $1.35 billion in a deal that also comes with plans for $3 billion in development projects.

The existing infrastructure was purchased at a large discount to the construction costs, so IPL could see strong returns on the investment in the coming years. The new facilities should provide a nice boost to cash flow once they get the final green light and are completed.

IPL pays a monthly dividend of $0.135 per share for an annualized yield of 6.5%. The Q1 payout ratio was 61%, so there is ample room for increases at the current cash flow rate.


Altagas owns gas, utility, and power assets in Canada and the United States. The company has grown over the years through a mix of organic projects and acquisitions, and that trend continues.

In Canada, Altagas is expanding its Townsend gas-processing operations, building a new propane export terminal, and moving ahead with its North Pine NGL facility — all in British Columbia. South of the border, the company’s Pomona Energy storage facility in California is now in operation. In addition, Altagas is in the process of buying Washington-D.C. based WGL Holdings for about US$6.8 billion.

Management expects the new assets to boost cash flow enough to support annual dividend growth of at least 8% in the next few years.

The stock is down about 13% in 2017. As a result, the current monthly payout of $0.175 per share provides a yield of 7.1%.

Is one more attractive?

Altagas offers a higher yield but likely comes with more risk until the WGL deal is closed. At this point, I would call it a draw between the two names.

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Fool contributor Andrew Walker owns shares of Altagas. Altagas is a recommendation of Stock Advisor Canada.

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