TFSA Investors: 3 Dividend Stocks on Sale Yielding Up to 7.3%

Royal Bank of Canada (TSX:RY)(NYSE:RY) and these two other dividend stocks can help generate a lot of cash flow for your portfolio.

| More on:

TFSA accounts are gold mines for investors that are looking to buy, hold, and watch their portfolios grow over time. And the only thing better than a good dividend stock is one that’s been on a decline lately and that could be due for a rally.

Below are three dividend stocks that have been struggling lately but that are still good, long-term buys.

Royal Bank of Canada (TSX:RY)(NYSE:RY) is Canada’s top bank and there’s lots to like about it. Not only could it stand to benefit from a rising-rate environment, but it also provides a great dividend yield of around 4% per year. The bank stock has increased its payouts multiple times over the past 12 months, and in five years RBC’s dividend payments have grown from $0.67 to $0.98 for a compounded annual growth rate (CAGR) of 7.9%. At that rate, it would take a little over nine years for the bank’s payouts to double in value.

RBC doesn’t normally offer this high of a yield, but because the stock has declined around 7% in the past month, that has pushed its dividend yield up. Although this isn’t a stock that you’re going to expect to take off tomorrow or anytime soon, it can provide you with some stability and long-term capital appreciation. Over the past 10 years, RBC’s stock price has doubled in value, and over three years it is up 25%.

The recent dip is a good opportunity to lock in this safe, growing dividend stock at a bit of a discount.

Premium Brands Holdings Corp (TSX:PBH) has declined around 15% in just the past three months despite posting record sales in its second quarter. The company has dozens of brands in its portfolio and continues to acquire and grow its business. In four years, the company’s sales have more than doubled, and revenue in its most recent quarter was up by more than 30%.

Premium Brands pays a modest dividend of 2%, but its payouts have grown over time as well. In five years, dividend payments have risen by 52%, averaging a CAGR of 8.7%, which is even higher than RBC’s. However, when there’s a big delta between dividend yields, dividend growth becomes less of a factor and you’re likely better off going with the stock that has the higher payment today. Nonetheless, Premium Brands can offer your portfolio opportunities for a lot of growth and dividend income over the years.

NorthWest Health Prop REIT (TSX:NWH.UN) can help diversify your portfolio in a number of different ways. Not only are you investing in healthcare real estate, but the REIT has a portfolio of properties spanning many countries and continents. There’s a lot to like when it comes to diversification, and that diversity has helped the company grow as it too has doubled its top line in just four years’ time.

Unfortunately, many REITs have struggled this year, and NorthWest is no exception to that, declining by 5% since the start of 2018. However, with a monthly dividend that yields more than 7.3% annually, it can provide you with a good stream of recurring cash flow.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor David Jagielski has no position in any of the stocks mentioned.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »

sale discount best price
Dividend Stocks

1 Dividend Stock Down 11 Percent to Buy Right Now

Do you want a great dividend stock down 11% that can provide years of growth potential? Here's one heavily discounted…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Are you looking for dividend stocks to buy right now? Here are two top picks!

Read more »

edit Taxes CRA
Dividend Stocks

Tax Time: How to Keep More of Your Money

Nearly everyone hates paying taxes, although Canadians can lessen the financial pain with the right tax strategies.

Read more »