The best dividend stocks to add to your TFSA are those that are cheap given that you can benefit from both recurring income as well as the potential to earn capital appreciation along the way.
The three stocks below are all trading near their 52-week lows and could be appealing buys for income investors:
Rogers Communications Inc (TSX:RCI.B)(NYSE:RCI) has declined more than 10% over the past six months and it still hasn’t recovered from its recent earnings result, when it announced a downgrade to its forecast after there was too much excitement from consumers surrounding its unlimited data plans.
It’s an odd reason for investors to be negative about the stock. While in the short term there will be some less-than-impressive results, it’s a move that makes a lot of sense in the long term. Offering customers what they want is a good way for the company to minimize churn and grow its sales.
Alas, the stock has still not recovered from that sell-off, but that could be great news for investors who are after a good dividend. Currently yielding a dividend of around 3.1%, Rogers can be a great stock to build your TFSA around.
It’s a solid, blue-chip stock trading at 16 times earnings and it’s going to remain a top stock on the TSX for many years to come. Whether you’re looking for value or for dividend income, it’s one of the safer investments that you can buy today. It’s also currently about 5% away from its 52-week low.
NFI Group (TSX:NFI) is even closer to its 52-week low, as the stock has fallen more than 22% so far this year. In two years, NFI has lost more than half of its value.
Disappointing and inconsistent quarterly results have weighed on the stock and the company also recorded a net loss in its most recent earnings report.
The positive is that the bus manufacturer continues to grow with sales up 20% last quarter. Debt has started to become a problem for the company, as interest costs have been chipping away at NFI’s results, which is part of the reason behind NFI’s poor results.
However, with opportunities over the long term for NFI to develop greener, more environmentally friendly buses, it’s hard not to like the stock as a long-term hold.
Currently, the dividend stock is paying investors 6.6% per year and it’s increased its payouts over the years as well. Holding on to NFI could require a lot of patience, but it’s a stock that could pay off and produce some strong returns for investors in the end.
Cineplex Inc (TSX:CGX) has had an up-and-down year so far in 2019, with the stock down around 7% year to date. It too has struggled with consistency, as it hasn’t always been able to stay profitable and when it has been, its margins haven’t been all that big.
Last quarter, the company recorded a net income of $13 million on revenue of $418 million, for a profit margin of just 3.2%. There’s not much room for error for Cineplex — a concern for investors in an industry that may have seen its best days pass by long ago.
However, the stock isn’t dead yet and it’s still producing good results, as sales have only fallen below $400 million once during the past four quarters.
The stock pays investors a dividend of 7.2%, the highest on this list. With Cineplex having a low beta of around 0.5, it could be a relatively safe dividend option for investors, at least over the short term, anyway.