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TFSA Investors: 3 “Perfect” Stocks to Buy for Reliable Dividends

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The following three stocks are just right for a TFSA, bringing a blend of good value and high dividends. Let’s look at the stats and outlook for this trio of tickers perfectly suited for a long-term investor looking to pad a tax-free savings account.

Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ)

Down 7.2% in the course of the last five days, Canadian Natural Resources stock is going cheap after the company cut its Albian mines output forecasts for the next couple of months. However, it’s making up for it by optimizing other resources – so does that make it a top TFSA-filler to buy on the dip?

While a one-year past earnings growth of 8.1% beats a slightly negative five-year average past earnings growth rate by a somewhat narrow margin, the long-term passive income investor bullish on natural resources will find Canadian Natural Resources’ decent dividend yield of 3.97% to be reason enough to buy.

For would-be investors interested in buying Canadian Natural Resources stock, you may want to forget about that revised future output and focus on a 14.9% expected annual growth in earnings. Meanwhile, debt at 64.5% of net worth isn’t too much of a worry at this point, though it does denote a balance sheet that the low risk investor may look upon as less than satisfactory, especially in conjunction with recent news.

Enbridge (TSX:ENB)(NYSE:ENB)

A slightly negative one-year past earnings growth rate denotes a tough year for energy stocks; while that may come as no surprise, a five-year average past earnings growth of 33% shows that Enbridge can pull it out of the bag under better conditions. Indeed, Enbridge’s returns of 21.1% over the past year easily beat the oil and gas industry average for the same 12 months (which was itself negative by 3.4%).

While a 32% discount off of the future cash flow value suggests that Enbridge might be a solid buy for a value-focused portfolio, RRSP, or tax-free savings account, a P/E of 33.5 times earnings tells a different story. At around double the average for a Canadian oil and gas stock, that price-to-earnings ratio is slightly off-putting; however, Enbridge stock is trading near the market in terms of book value.

BCE (TSX:BCE)(NYSE:BCE)

BCE’s returns of 12.1% in the past year narrowly beat the Canadian telecoms industry average of 9.1% for the same period. Its earnings growth has been negative for the past year, not unlike Enbridge’s, though BCE’s five-year average past earnings growth of 6.6% is considerably lower than that stock’s earnings growth.

Decent valuation matched with a chunky dividend are the main draw for this top-tier Canadian telecoms ticker, with a P/E of 19.3 times earnings denoting the former and a yield of 5.3% illustrating the latter. Though a 6.2% expected annual growth in earnings may be on the low side, it shows growth in a crowded field at the very least, which makes that passive income taste even more palatable.

The bottom line

Buy Enbridge for its high dividend yield of 6.04% and 36.5% expected annual growth in earnings, or go for Canadian Natural Resources, with its P/E of 17.8 times earnings and P/B of 1.4 times book indicating near-perfect valuation. BCE, meanwhile, remains one of the front-line communications and media stock on the TSX index and a fairly sturdy long-term investment.

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Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool owns shares of Enbridge. Enbridge and CN are recommendations of Stock Advisor Canada.

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