TFSA Investors: 2 Cheap Dividend Stocks

Ag Growth International Inc. (TSX:AFN) and Enerflex Ltd. (TSX:EFX) stocks still look discounted in the middle of September.

| More on:
Growth from coins

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The fate of the TFSA may hang in the balance ahead of the next Canadian federal election. Before being voted out of power, the previous Conservative federal government increased the annual TFSA contribution limit to $10,000.

The Liberals would reduce this to $5,000 and have since upped it to $6,000 in 2019. More TFSA room equals more room for flexibility. Today I want to explore an income-focused strategy.

In the spring and summer, I’d explored why investors may want to target dividend stocks after oil entered a bear market. Energy stocks have rebounded in the late summer, but there are still bargains available for those seeking income.

Ag Growth International

Ag Growth International (TSX:AFN) stock has dropped 17% over the last three months as of close on September 11. Shares have fallen 3.7% in 2019 so far. Ag Growth is trading near its 52-week low, but should it be considered a buy-low opportunity?

The United States agricultural sector has been plagued by poor weather in 2019, but sales in Canada have remained strong. In the second quarter, the company reported a jump in trade sales to record levels.

Demand for portable farm equipment remained strong in the United States in the face of broader headwinds, and sales of commercial equipment in Canada surged due to investment in grain handling infrastructure.

Income investors should be interested in Ag Growth’s monthly dividend payout. It declared dividends of $0.20 per share in Q2 2019, representing a nice 5.5% yield. Ag Growth looks appealing on the value side as well. It boasts a price-to-earnings ratio of 18.4 and a price-to-book of 1.9.

Shares spent most of August and part of early September in technically oversold territory. Even after a marginal uptick the stock still looks like a bargain buy today.


Enerflex (TSX:EFX) operates in the oil and gas sector. Shares have dropped 16.2% in 2019 as of close on September 11. Similar to Ag Growth, the stock has enjoyed a small rebound from a 52-week low, but it is still trading at the low end of its year long range.

In its second quarter report, Enerflex reported a $236.2 million increase in revenue from the prior year in the year-to-date period, posting improvement across all product lines. The company reiterated its positive outlook for the full year in 2019.

U.S. and Canadian segment revenue climbed by $108 million and $54 million, respectively, compared to the previous year. Investors in Enerflex can look forward to an uptick in capital spending by the natural gas industry in the back half of 2019, which the company expects will drive bookings growth.

Shares of Enerflex possess a favourable P/E ratio of 9.4 and a P/B of 0.9. The stock has also recently climbed out of a stint in technically oversold territory. Enerflex announced a quarterly dividend of $0.105 per share in its most recent quarterly report, which represents a 3.2% yield.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. Enerflex is a recommendation of Stock Advisor Canada. AG Growth International is a recommendation of Dividend Investor Canada.

More on Dividend Stocks

Tech Stocks

Got $300? 2 Simple TSX Stocks to Buy Right Now

These two TSX stocks aren’t as popular as other names, but they are smart buys right now because both are…

Read more »

Increasing yield
Dividend Stocks

3 TSX Stocks With High Dividend Yields

Not all stocks with high-dividend yields are great buys. Here are three stocks to consider for your portfolio today.

Read more »

edit Balloon shaped as a heart
Dividend Stocks

Dividend Lovers: 2 U.S. Stocks to Power Up Your Portfolio

Dividend investors in Canada can consider buying these two top U.S. stocks right now to diversify their portfolios and get…

Read more »

Growth from coins
Dividend Stocks

2 TSX Stocks to Buy With Dividends Yielding More Than 3%

Here are two TSX stocks to buy today with dividends yielding more than 3%!

Read more »

growing plant shoots on stacked coins
Dividend Stocks

TFSA Passive Income: Earn $317 Every Month Tax Free for Life

By leveraging A TFSA, Canadians can earn a tax-free passive income of $317 every month for life.

Read more »

edit Close-up Of A Piggybank With Eyeglasses And Calculator On Desk
Dividend Stocks

2 Cheap TSX Dividend Stocks to Buy Now for a TFSA or RRSP

TFSA and RRSP investors can now buy top TSX dividend stocks at cheap prices for portfolios focused on passive income…

Read more »

Man data analyze
Dividend Stocks

Have $1,000? 2 All-Weather Dividend Stocks to Buy and Hold Forever

Canadians with $1,000 to invest can buy two all-weather dividend stocks today and hold them forever.

Read more »

office buildings
Dividend Stocks

2 Stocks to Invest in U.S. Real Estate

Do you need more income? Consider diversifying your real estate portfolio to the south via value U.S. REITs.

Read more »