The millennial generation is known as the “money-conscious” generation. It’s the appropriate tagline, as young adults today love to save money. You can imagine the power of two when a millennial couple starts saving. Saving money, however, will only go as far as instant liquidity when you need cash.
Millennial couples with $100,000 savings in their TFSA can open the gateway for more money. The balance can exponentially grow with the right dividend stocks. TORC (TSX:TOG) and MCAN (TSX: MKP) offer an average dividend of 8%. With a long investment window, your TFSA balance can swell to $1 million.
Intuitive explorer
Calgary-based TORC is an oil and gas company that is into the exploration and production of petroleum and natural gas in the Western Canadian Sedimentary Basin. You can find the principal properties of the company in the southeastern Saskatchewan area.
Since the start of operations, TORC is focusing on asset quality and financial flexibility. But the company is aware of the inherent risks of the business. Aside from the discovery of the hydrocarbon reserves, it should be economically produced.
The financial risks include fluctuations in commodity prices, interest rates, currency exchange rates. TORC should also have access to debt and equity financing at a reasonable cost. On the operations side, the risks are competition, environmental factors, and reservoir performance uncertainties, plus a complex regulatory environment and safety concerns.
TORC counters the business risks by operating a large number of its properties. By doing so, the company can control the timing, direction, and costs related to exploration and development opportunities.
The energy stock is a low-priced dividend stock and pays a high yield.
Strategic investor
The almost two-decade-old MCAN is a mortgage investment corporation based in Toronto, Canada. This $390.9 million company offers single-family residential mortgages, residential construction, non-residential construction, and commercial loans. It is also into real estate and securitization investments.
The mortgage business has a notorious image, but MCAN has been generating profit and revenue as a strategic investor in Canadian mortgages. The risk is not high, as it’s a federally regulated mortgage investment corporation, which is funded by the Canadian Deposit Insurance Corporation (CDIC) eligible term deposits
In the third quarter ending September 30, 2019, MCAN was happy to report a 32% increase in net income versus the same quarter. Likewise, the return on average shareholders’ equity increased from 14.29% to 18.05% in Q3 2019.
The stock is an interesting dividend play, as it yields 7.89%. The dividends are sustainable, as MCAN continues to generate a reliable stream of income from its diversified portfolio of Canadian mortgages.
Wealthy couple at 50
Partners who are both 20 years old and have $50,000 in savings each can realize a $1 million TFSA balance at age 50 if the yields of TORC (8.09%) and MCAN (7.89%) remain constant.
The biggest regret of baby boomer couples is not saving enough to enjoy retirement to the fullest. Millennial couples should learn from the folly of the older generation. The earlier that millennial couples can work together and start investing, the better.
