After the dust settles in the aftermath of the almost 10% fall in the TSX this past year comes the exciting news.
Many high-quality, top dividend stocks are trading at attractive valuations and are great candidates to add to your TFSA to keep it safely growing this year and beyond.
Without further ado, let’s take a look at two top dividend stocks for your TFSA.
TransCanada (TSX:TRP)(NYSE:TRP)
For more than 65 years, TransCanada has been developing and maintaining energy infrastructure, while handsomely rewarding shareholders.
And with a current dividend yield of 5.13%, it’s hard to find a safer income stream at these levels than this.
Since 2000, TransCanada stock has provided shareholders with an 8.37% compound annual growth rate (CAGR), while delivering yearly dividend increases, which has brought the dividend per share from $0.80 to $2.76 for a CAGR of over 7%.
And this growth is strong as well as predictable, as 95% of TransCanada’s EBITDA is from regulated or long-term contracted assets, resulting in above-average, visible growth and an infrastructure presence that should ensure strong growth well into the future.
As such, investors can expect continued dividend growth of 8-10% through to 2021.
Finally, in terms of market sentiment toward the stock, the recent approval of LNG Canada’s proposal to build the LNG plant is a positive in that it has resulted in the company moving forward on its Coastal GasLink natural gas pipeline.
Chartwell Retirement Residences (TSX:CSH.UN)
Chartwell is a real estate investment trust, or REIT. It is the largest provider and owner of senior-housing communities from independent living to long-term care and has been benefiting from rising occupancy levels, as an uptick in demand has been accompanied by a stagnant supply of senior housing.
With a 4.18% dividend yield, four consecutive years of cash distribution increases, and a quality portfolio of properties, Chartwell is a solid investment that is well positioned for the future.
In its latest quarter, Chartwell reported a 6% increase in fund from operations, but the real story here is the long-term trend, as a doubling of people over the age of 75 in the next 20 years will provide a big boost to demand.
Going forward, the company has a strong pipeline of opportunities to expand its portfolio of senior-housing developments as well as a plethora of opportunities to continue to expand its support services that are offered in-house.
In closing, both of these dividend stocks are in safe economic sectors with strong long- and short-term fundamentals, little economic sensitivity, and definite staying power — the answer to investors who are looking to safely grow their TFSAs.
