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TFSA Investors: 3 Stocks Paying Up to 6.1% That Can Help Diversify Your Portfolio

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When you’re looking for some good dividend stocks to put into your TFSA, it’s important to also find a good balance and diversify your holdings to ensure you aren’t overly exposed to one industry.

Below are three stocks that will help give your portfolio a great deal of diversification and dividend income.

First National Financial Corp (TSX:FN) pays a great dividend of more than 6.1% per year, and the lending company is a good alternative for investors who aren’t looking for something other than a big bank stock to invest in.

While the Big Six banks will certainly be more secure, they also pay a lower dividend and may not have as much upside as First National does.

Similar to its peers, much of the success and bullishness surrounding the company will undoubtedly be around mortgages and the strength of the real estate market.

Year to date, First National’s stock has achieved similar results to both Royal Bank and TD, with all three financial services companies seeing their valuations showing good growth so far this year.

First National gives investors a great way to diversify and secure what could be a very lucrative dividend.

Extendicare Inc (TSX:EXE) can help provide investors with both growth and diversification. With a focus on senior care and services, the company is in a great position to take advantage of an aging population that’s going to need to be looked after in the years to come.

Extendicare has over 100 locations across the country, and in 2018 the company generated more than $1.1 billion in sales.

With more Baby Boomers retiring, the company’s top line is only going to get stronger over the years. What makes the stock a good investment is that for many people, the services that Extendicare offer are a necessity.

While someone might not need to buy a house or take on a new mortgage, they’ll need their ageing parents to be looked after.

With a dividend of 5.6%, Extendicare could prove to be a great investment to buy and hold.

Magna International Inc (TSX:MG)(NYSE:MGA) may not offer the highest yield, but investors will get a lot of value and some great growth opportunities from this stock.

Although Magna’s share price has fallen around 20% during the past 12 months, that simply makes it an even more appealing buy for investors.

With significant potential in the self-driving industry, the stock can give investors the opportunity to tap into the excitement surrounding autonomous vehicles.

Although driverless cars have seen much success lately, the industry still has a long way to go before the vehicles become commonplace on our roads. However, that makes Magna very appealing to hold for the long term.

Currently, the stock pays investors more than 3% per year and it’s great compensation while you wait for Magna’s share price to recover.

The stock is a downright bargain today, trading at around eight times its earnings and just 1.8 times its book value at writing.

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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 owns shares of Magna Int’l. Magna international and Extendicare are recommendations of Stock Advisor Canada.

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