TFSA Investors: 3 Stocks That Pay up to 6% That Can Diversify Your Portfolio

Investing in quality dividend stocks is a way you can set your portfolio and forget it. A strong yield coupled with a growing, stable company can be a recipe for great long-term returns. This makes dividend stocks particularly valuable, especially inside a TFSA, where your returns can be tax-free on eligible investments.

Below are three dividend stocks that pay more than 4% per year in dividends and that could be great buys today.

Bank of Nova Scotia  (TSX:BNS)(NYSE:BNS) is one of the Big Five banks, and it can offer investors a lot of diversification, as it has a strong presence in Central and South America.

While you may not get explosive growth from the bank stock, you will get a lot of stability. In each of the past five years, Scotiabank’s net revenue has totaled more than $20 billion, while net income has been below $7 billion just once during that time, averaging an incredible profit margin of 30%.

Rising interest rates and many expansion opportunities still available to Scotiabank will give the company many avenues to continue to grow. At a price-to-earnings multiple of 11, and a with the stock trading at only 1.6 times its book value, it’s very well priced, and investors don’t have to pay a big premium to own the stock.

Currently, Scotiabank pays shareholders 4.4% in dividends every year, and payouts have grown over the years as well. Since 2013, dividend payments of $0.60 have risen to $0.82 for an increase of 37% during that time.

Brookfield Renewable Partners LP  (TSX:BEP.UN)(NYSE:BEP) is another stock that can offer you a great way to diversify your portfolio. The renewable power company has operations all over the world and has a diverse portfolio of assets that includes hydro, wind, and solar power-generating facilities.

At a time when climate and the environment are big concerns, you can bet that demand for renewable energy will only continue to rise in the years to come. While the main deterrent today is high costs, we’ll see that decline in the years to come, as efficiencies are gained in those industries, and then demand will grow for these types of power sources.

Brookfield’s dividend is in U.S. dollars and currently yields over 6.1%, although that will certainly change with the exchange rate and as the company continues to raise its payouts.

A and W Revenue Royalties Income Fund  (TSX:AW.UN) can help diversify your portfolio even further by investing into fast food. The company has found success by positioning itself as a more health-conscious choice than its competitors by avoiding beef with growth hormones and instead providing safer options for its consumers.

Although many people try to turn away from fast food altogether, there are certainly many people that still want to be able to eat healthy and indulge in fast food, and that’s something that A&W hopes to capitalize on as it tries to balance both worlds.

The company recently raised its payouts and is now paying investors an annual yield of more than 5.1%. At a price-to-earnings multiple of under 18, A&W’s stock is a good value buy that trades well below the industry average of over 20.

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Fool contributor David Jagielski owns shares of A&W REVENUE ROYALTIES INCOME FUND. A and W Revenue Royalties Income Fund and Brookfield Renewable Partners are recommendations of Dividend Investor Canada.

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