TFSA Investors: 3 Safe Dividend Payers Yielding up to 6.3%

Top stocks like Enbridge Inc. (TSX:ENB)(NYSE:ENB), Algonquin Power and Utilities Corp (TSX:AQN)(NYSE:AQN), and Crombie REIT (TSX:CRR.UN) would look great in any TFSA.

There are few investing trends more powerful than a fully-stacked TFSA and patience to let the compounding effort work its magic. It’s not hard to turn a relatively modest series of contributions into some serious money.

Dividends help a TFSA get even bigger faster, especially if you’re putting that cash to work.

Let’s take a closer look at three of Canada’s top dividend payers — great stocks that would look fantastic in your TFSA over the long term.

Enbridge

I’m a big fan of buying Enbridge (TSX:ENB)(NYSE:ENB) shares on any dip. And thanks to recent issues surrounding the company’s potential Line 5 replacement program in Michigan, shares have dipped to levels not seen since February. The stock currently trades hands for just under $47 per share.

Enbridge is an energy behemoth — the kind of company you have to own for the long term. It transports nearly two-thirds of Canada’s total crude oil exports to the United States, safely delivering billions of barrels of oil to refineries. The company owns thousands of kilometres of natural gas pipelines as well as North America’s third-largest natural gas utility. Finally, Enbridge generates some 1,700 megawatts of renewable energy from a fleet of solar- and wind-fueled power plants.

Put this all together, and we have a company that generates gobs of recession-resistant cash flow, ample amounts to pay back the interest on the debt and give investors one of the best dividends out there. Shares currently yield 6.3%, and management has promised to grow the payout by some 10% annually through 2020. Enbridge has grown its dividend each year since 1998 and has paid the payout for 64 consecutive years.

Algonquin

Algonquin Power and Utilities (TSX:AQN)(NYSE:AQN) is a little unique in the boring world of utilities. The company is a strong growth play, as management looks to acquire all sorts of smaller operators. Recent acquisitions include buying Enbridge’s New Brunswick natural gas business and the purchase of natural gas assets in upstate New York.

Algonquin isn’t just a utility operator, however. The company also has a robust power generation division, which focuses on owning renewable energy assets. Some 80% of power generated comes from wind turbines. The power division is no slouch, generating some 1.5 gigawatts of energy every year. That’s enough to power more than a million homes.

Algonquin is still quite small when compared to more mature utility operators, which bodes well for growth plans hitting the bottom line. It plans to build US$1.7 billion worth of power plants in the next few years as well as making additional utility acquisitions. It’s not hard to like these expansion plans.

Algonquin pays a 4.6% dividend today with industry-leading dividend-growth potential going forward. I can easily see the company hiking its payout by 10% annually over the next five years.

Crombie REIT

Owning grocery-anchored real estate doesn’t look like a sexy business on the surface, but an investment in Crombie Real Estate Investment Trust (TSX:CRR.UN) comes with an interesting combination of current yield today and growth for the future.

Let’s start with that dividend, which currently stands at $0.074 per share each month. That’s good enough for a 5.9% yield. The payout ratio is sound, so investors don’t have to worry about the security of the payout.

Next up is Crombie’s growth plans. The company is sitting on all sorts of valuable real estate — locations acquired decades ago. Some of these properties are ripe for redevelopment, like its Davie Street project in Vancouver. This project will turn a Safeway store into a mixed-use facility that will house commercial and residential space.

Crombie has additional opportunities to do similar projects in Canada’s largest cities. Once completed, the first wave of these redevelopments could add $1-$2 per share in net asset value to the company — a significant amount for a stock currently trading at just over $15 per share.

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 Nelson Smith owns shares of ENBRIDGE INC and Crombie Real Estate Investment Trust. The Motley Fool owns shares of Enbridge. Enbridge is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

money goes up and down in balance
Dividend Stocks

This 6% Dividend Stock Is My Top Pick for Immediate Income

This Canadian stock has resilient business model, solid dividend payment and growth history, and a well-protected yield of over 6%.

Read more »

ways to boost income
Dividend Stocks

1 Excellent TSX Dividend Stock, Down 25%, to Buy and Hold for the Long Term

Down 25% from all-time highs, Tourmaline Oil is a TSX dividend stock that offers you a tasty yield of 5%…

Read more »

Start line on the highway
Dividend Stocks

1 Incredibly Cheap Canadian Dividend-Growth Stock to Buy Now and Hold for Decades

CN Rail (TSX:CNR) stock is incredibly cheap, but should investors join insiders by buying the dip?

Read more »

bulb idea thinking
Dividend Stocks

Down 13%, This Magnificent Dividend Stock Is a Screaming Buy

Sometimes, a moderately discounted, safe dividend stock is better than heavily discounted stock, offering an unsustainably high yield.

Read more »

Canadian Dollars bills
Dividend Stocks

Invest $15,000 in This Dividend Stock, Create $5,710.08 in Passive Income

This dividend stock is the perfect option if you're an investor looking for growth, as well as passive income through…

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

3 Compelling Reasons to Delay Taking CPP Benefits Until Age 70

You don't need to take CPP early if you are receiving large dividend payments from Fortis Inc (TSX:FTS) stock.

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

Better Dividend Stock: TC Energy vs. Enbridge

TC Energy and Enbridge have enjoyed big rallies in 2024. Is one stock still cheap?

Read more »

Concept of multiple streams of income
Dividend Stocks

Got $10,000? Buy This Dividend Stock for $4,992.40 in Total Passive Income

Want almost $5,000 in annual passive income? Then you need a company bound for even more growth, with a dividend…

Read more »