TFSA investors with a 25-year investment window can turn $17,000 into a cool $1,000,000. It’s not a miracle, but you must have a dedicated approach and the patience to make it a reality. There are high-yield dividend stocks on the TSX that you can combine in your TFSA and use to achieve your financial goal.
Cineplex (TSX: CGX) and Transcontinental (TSX: TCL.A) are your vehicles to set your dream of becoming a millionaire in motion.
Diversified media company
Cineplex, Canada’s biggest cinema operator, is a dividend rock star with a track record of seven consecutive years of dividend increases. This $1.5 billion company continues to rake in profits despite the onslaught of streaming companies.
The Film Entertainment and Content segment operates 165 film theatres and provides food and in-theatre amusement services. The Media segment provides in-theatre advertising services. It also designs, installs, and operates digital signage networks, as well as offers advertising on networks.
Cineplex’s Amusement and Leisure segment operates and distributes amusement, gaming, and vending equipment; and operates social entertainment destinations. The company has facilities for dining, entertainment, and gaming and the facilitator of league, tournaments, and gaming ladders for the gaming community.
Aside from being a top-tier Canadian brand, Cineplex is popular with investors because it pays a market-beating 7.55% dividend. TFSA investors should note that the stock was able to achieve Dividend Status after only 16 years.
Transformed business
Transcontinental (TSX: TCL.A) is also a Dividend Aristocrat with 17 consecutive years of dividend increases under its belt. The stock’s current yield is 5.79%. This former newspaper publishing company underwent a business transformation.
Today, the 42-year old company operates packaging, printing, and media segments. The Packaging segment involves the extrusion, lamination, printing, and converting activities, as well as offers flexible plastic and paper products, among others.
The Printing segment is in charge of the integrated services for retailers, including pre-media services, flyer and in-store marketing product printing, and door-to-door distribution, as well as print solutions for newspapers, magazines, and mass marketing products.
The Media segment takes care of the printing and digital publishing of newspapers, educational books, and specialized publications for professionals. The company is in the process of synergizing the printing and packing businesses. Management expects to expand profit margins once there is full synergy.
The plan
Raising $1,000,000 from the dividend stocks would take a total of 25 years. The first step is to save $47.22 per day for one year to have a capital of $17,000. Follow the saving pattern for four more years. Your total savings would be $85,000 after five years.
Theoretically, if you combine Cineplex’s 7.55% yield with Transcontinental’s 5.79%, your $85,000 would amount to $1,040,000, including the compounding effect, in 20 years. If you’re 25 years old today, you’d be a millionaire at age 45.
The actual execution of the plan might not have the same turnout as the example given. However, it gives you an idea of how investing in dividend stocks and growing your TFSA balance works.
