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TFSA Investors: 3 Dividend Stocks to Help Diversify Your Portfolio

A TFSA is a great tool to help build your savings, but it’s important to remember to diversify it as well to ensure you aren’t overexposed to a particular industry. Below are three stocks that could be good options to build your portfolio around that also pay a good dividend.

Sienna Senior Living (TSX:SIA) is a good long-term option for investors because the company pays a high dividend and also focuses on senior living facilities, which should rise in demand as the population ages. Unlike a typical consumer good or something that can be cut back, senior living services aren’t optional for those that need them. That reliability helps provide investors with a lot of stability and consistency, which is something that is very valuable when you’re looking for a stock to hold long term.

Currently, Sienna pays shareholders a yield of 4.9%, which is a very good payout that isn’t too high or too low. It offers investors a good balance for a stock that’s a stable option and yet offers some decent growth prospects as well. Since the start of the year, the stock has risen around 18% and still has room to grow, as its market cap is only around $1.2 billion.

West Fraser Timber Co. Ltd. (TSX:WFT) is on the lower scale when it comes to dividend yield, but it can make up for it with a lot of potential growth. Over the past 10 years, the stock has grown 500% and the softwood lumber company could see more of the same as the population continues to grow and the demand for consumer goods and housing continues to rise.

Although the dividend is a very modest 1.2%, it has been increasing in recent years. From a quarterly payment of just seven cents back in 2017, payouts have nearly tripled to 20 cents per share since then. It shows that the company is looking to provide more value to shareholders, and if it continues, then it could turn out to be a much stronger dividend.  However, even if it doesn’t continue, investors will still have a great opportunity to benefit from both dividend income and capital appreciation as well.

Royal Bank of Canada (TSX:RY)(NYSE:RY) is always a good option for any portfolio. I include it here to just round out this list with yet another industry to diversify with. It’s likely not going to produce significant growth, but the value it offers investors is that it’s a great buy-and-forget stock that you don’t have to worry about.

There’s nothing like a good bank stock where you know that barring a complete collapse in the economy, your investment is likely to grow in value over the years. And adding a dividend that’s yielding 3.9% on top of that, which is also likely to grow, is only going to make your portfolio even stronger.

You’re also getting great value for your money, as the stock trades at around two times its book value and 12 times earnings. For one of the best blue chip dividend stocks on the TSX, it’s an easy option for dividend investors.

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

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