Dividend stocks are attractive for TFSA accounts, since any dividend income or capital appreciation earned on eligible shares is not taxable. Rather than loading up on bank stocks with limited growth and diversification, you may prefer to invest in dividend stocks that cover a range of industries, which will give you more of an opportunity to profit from capital appreciation. While an investment in Toronto-Dominion Bank might provide you with stability, you’ll likely want more diversification to balance out your portfolio.
I have three stocks listed below that cover many different industries and that have yields of over 5% per year.
Crombie Real Estate Investment Trust (TSX:CRR.UN) has a portfolio of 281 properties totaling $19 million in square feet. Its mix of properties is heavily weighted towards retail, and many plazas are anchored by grocery and drug stores. Crombie is well diversified with locations in all 10 provinces, and it doesn’t have a strong reliance on any one geographic location. This allows investors to take a balanced position in a retail industry that might see more growth as the economy continues to expand and as jobs continue to rise.
Currently, the company pays a dividend of 6.5%, which is paid on a monthly basis. Year to date, the stock has produced returns of just 1%; however, as Crombie continues to grow, so too will its stock price. In just three years, the company’s sales have grown 35%, and the most recent year, it saw revenues increase by 8%.
Extendicare Inc. (TSX:EXE)
provides senior-care services across Canada with 118 locations. In the past, the company had centres in the U.S., but it sold that part of its business in 2015 and has since focused on its Canadian operations. As the population in Canada gets older and more baby boomers retire, there will be a growing need for senior-care services, and that could mean a lot more demand for Extendicare’s services. Healthcare stocks are low-risk investments because, in many cases, these are expenses that are unavoidable for many consumers, and, as a result, they present investors with a lot of stability.
The stock also has monthly payouts which produce an annual yield of 5.1% for shareholders, and with strong growth, those payouts could rise. In two straight years, the company has seen its sales increase and the top line has grown a total of 30% since 2014. Extendicare is on pace for another good year as sales continue to grow, with the company’s latest quarter showing revenue growth of 5% from 2016.
Student Transportation Inc. (TSX:STB)(NASDAQ:STB)
is the highest-yielding stock on this list, with payouts of over 7%. The company provides school bus transportation services and operates over 13,500 vehicles. Student Transportation has seen steady growth in its top line, with sales improving in each of the past three years. Revenues totaling $637 million for 2017 were up 6% from last year and have grown 30% since 2014.
As the economy continues to grow and populations increase, the demand for school buses and transportation will only continue to rise. The company boasts a contract renewal rate of 95% for the last two decades.
This stability will undoubtedly appeal to investors looking for long-term investment options that have great dividends.
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