Boosting after-tax income is the desire of every TFSA user because you can offset income tax deductions through dividend stocks. If you want a significant boost, “dividend kings” are the investment options.
A stock portfolio consisting of Fiera (TSX:FSZ), Alaris (TSX:AD), and Inter Pipeline (TSX:IPL) averages a yield of 7.59%. An investment of $8,000 in each stock or a total of $24,000 can produce $1,821.30 in annual income. Triple your investment and the annual earnings swell to $5,464.80.
Fiera is a global independent asset management company based in Montreal, Canada. This $1.1 billion firm provides customized multi-asset solutions to retail, private wealth, and institutional clients from North America, Europe, and select Asian countries. Its ultimate objective is to sustainable wealth to clients.
Since 2003, Fiera has been acquiring and/or merging with asset management firms as part of its strategic growth strategy. The rationale for these moves is to further enhance the company’s high net-worth platform and strengthen its institutional investment management capabilities.
The growth of its assets under management (AUM) to $164.7 billion, and its 17 locations is a reflection of Fiera’s success. However, the toughest competitors are ETFs and robo advisors.
As a countermeasure, the company is proactively moving forward with streamlining initiatives and technology enhancements.
At $11.19 per share, the dividend yield is 7.5%.
Alaris has one of the most unique operations. Its expertise is in helping lower and middle-market companies to realize maximum business potentials. The target recipients of growth capital are companies that have been producing $3 million in cash flows, historically.
Start-ups, turnaround companies, and those that carry the risk of obsolescence as well as declining asset base are excluded. The size of financial assistance or investment that Alaris extend to qualified companies ranges from $5 million to $t00 million.
After providing long-term financial assistance or growth capital, Alaris then receives royalty payments or distributions from these performing private companies.
Some clients that were given assistance can experience business reversals. Because of its large diversified portfolio, the impact of these setbacks is minimal and hardly affects operations. Over the last 15 years, the company has generated an exceptional 17% IRR.
At $21.83 per share, the dividend yield is 7.61%.
An ever-popular stock
The last dividend king in focus is Inter Pipeline, an ever-popular investment option in the energy sector. This $9.4 billion producer of natural gas and crude oil in Canada serves only investment-grade clients.
Inter Pipeline continues to flourish as customers prefer transporting oil through pipelines rather than the slower train. Revenue-wise, the numbers are impressive. The revenue from 2013 to 2017 grew by 64.3% to $2.3 billion. It rose by 13.0% to $2.6 million last year.
From 2013 to 2018, cash flow increased by 130.6% to $1.09 billion. Inter Pipeline realized increases in both due to its expanded operations in the past few years. In 2022 and every year thereafter, $500 million should be added to its cash flow.
The construction of the Heartland Petrochemical Complex, which the company started building in January 2018, will be completed at the end of 2021. This integrated plant converts propane into high-profit-margin polypropylene plastic.
At $22.46 per share, the dividend yield is 7.67%.
Make the regal move
Give your after-tax income a significant boost by making a regal move. The high dividends from Fiera, Alaris, and Inter Pipeline can lessen the effect of income tax deductions.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends ALARIS ROYALTY CORP.