TFSA Investors: 3 Absurdly Cheap Stocks to Boost Your Returns

ARC Resources Ltd. (TSX:ARX), Vermilion Energy Inc. (TSX:VET)(NYSE:VET), and Choice Properties Real Estate Investment Trust (CHP-UN.TO) are the easy-on-the-pocket stocks today that pay high dividends.

| More on:
IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT

Image source: Getty Images

TFSA investors who are shopping for absurdly cheap stocks should take a look at ARC (TSX:ARX), Vermilion (TSX:VET)(NYSE:VET), and Choice Properties (TSX:CHP). These three companies are popular names on the TSX but are currently trading at discounted prices.

The depressed prices might not last long once the stocks rebound. Meanwhile, you can generate sizable passive income from the high dividend yields in your TFSA.

Passing weakness

The prices of ARC and Vermillion have gone down by an average of 25% in the last two months. Both energy stocks are nearing their 52-week lows and have been slipping because of the volatility in the sector. However, the companies are still turning in respectable performances.

ARC surprised investors with strong financial and operational results in the second quarter of 2019. During that quarter, this $2.21 billion oil and gas company generated a net income of $94.4 million from an average daily production of 134,938 barrels of oil equivalent per day.

The crude oil and liquids production also increased by 6% to 35,543 barrels per day, due to ARC’s high-value condensate production. The 6% drop in natural gas production was due to the scheduled maintenance activities, third-party pipeline maintenance, and some outages.

ARC expects to end 2019 with an annual average production of 136,000 to 142,000 barrels of oil equivalent per day.

International energy producer Vermilion is on a slump, but that doesn’t mean the business is slowing. This $3.19 billion energy firm has several growth opportunities in production.

Vermillion continues to exploit light oil and liquids-rich natural gas conventional resource plays in Canada and the U.S.

The company is exploring the development of high impact natural gas opportunities in Germany and the Netherlands. Vermillion has oil drilling and workover programs in Australia and France.

Given its geographically diversified asset base which delivers high margins, the stock will recover from its temporary decline.

Both energy companies pay monster dividends that can boost stock portfolios. ARC is trading at $6.26 with a dividend yield of 9.66%, while Vermillion is priced at $20.60 with a dividend rate of nearly 12.0%.

Great REIT

The price of Choice Properties is not falling but has fallen between $13.50 to $14.00 for most of the year. REIT stocks are attractive investment options because of their high dividends.

Capital gains from REITs are generally modest or insignificant, but TFSA investors would surely relish this stock’s 5.4% dividend yield.

Choice Properties is an owner, manager, and developer of strategically located retail and commercial real estate across Canada. The REIT is managing about 756 properties.

About 81% (615) of their total real estate portfolio are supermarket-anchored shopping centres and standalone supermarkets.

Canada’s largest retailer, Loblaw is the REIT’s main tenant, and the strong alliance formed between Choice Properties and Loblaw ensures growth into the future. Industrial properties comprise 15% or 117. Office and residential properties make up the remaining 4%.

Economical choices

You’re in luck — ARC, Vermilion, and Choice Properties can be bought at bargain prices and put into your TFSA. Now is the perfect opportunity to get the best deal on the TSX.

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 Christopher Liew has no position in any of the stocks mentioned.

More on Dividend Stocks

young woman celebrating a victory while working with mobile phone in the office
Dividend Stocks

3 CRA Benefits Most Canadians Can Grab in 2024

You can save on taxes by claiming the dividend tax credit on Fortis Inc (TSX:FTS) shares.

Read more »

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »