Keep the CRA Away! 3 Ways to Earn $1,590 in Tax-Free Income This Year

This trio of top dividend plays, including Inter Pipeline (TSX:IPL), can provide the fat income you need now.

Hello, Fools! I’m back to highlight three high-yield dividend stocks. As a reminder, I do this because high-yield dividend stocks

  • provide a healthy income stream in both good and bad markets; and
  • tend to outperform the market over the long run.

The three stocks below offer an average dividend yield of 5.3%. If you spread them out evenly in an average $30K TFSA account, the group will provide you with an annual income stream of $1,590 — on top all the appreciation you could earn.

So, if you’re looking to boost your tax-free income in 2020, these three stocks are a good place to start searching.

Profit pipe

Leading off our list is pipeline giant Inter Pipeline (TSX:IPL), which boasts a dividend yield of 7.6%.

Inter Pipeline’s healthy dividend continues to be supported by a diversified portfolio, stable cash flows, and high-quality oil sands assets. More importantly, Inter Pipeline’s cash flow has fueled significant debt reduction over the past few years.

In the most recent quarter, Inter Pipeline’s funds from operations (FFO) — a key cash flow metric — clocked in at a solid $204 million.

“Our oil sands transportation business continued to deliver strong, stable results, and we saw significantly improved results from our European storage operations,” said President and CEO Christian Bayle

Inter Pipeline shares are up about 9% over the past year.

Dream scenario

With a dividend yield of 3.2%, real estate company Dream Office REIT (TSX: D.UN) is next on our list of high yielders.

Dream’s rock-solid balance sheet, solid position in the attractive Greater Toronto Area (89% of portfolio), and efficiencies of scale should continue to fuel hefty long-term dividends. In the most recent quarter, Dream’s diluted FFO per unit improved to $0.42, which was fueled by a strong combination of increased cost savings and management fees.

“We are pleased with the financial performance and the progress we have made in repositioning our portfolio year to date,” said CFO Jay Jiang. “We are well positioned to capitalize on opportunities that can continue to grow the value and quality of our business.”

Dream Office shares are up an impressive 41% over the past year.

Fair exchange

Rounding out our list is aerospace and aviation equipment specialist Exchange Income (TSX: EIF), which sports a healthy dividend yield of 5.1%.

Exchange continues to lean on its diversified business model, disciplined acquisition strategy (which emphasizes high margins), and hefty cash flows to deliver stable dividends for shareholders. In the most recent quarter, EBITDA grew 12% to $89 million, as revenue jumped 15% to $355 million — both all-time quarterly highs.

“The third quarter saw us reach new highs on a number of financial metrics, once again demonstrating the importance of our diversified business model,” said CEO Mike Pyle.

Exchange shares are up 46% over the past year.

The bottom line

There you have it, Fools: three top high-yield stocks worth checking out.

As always, don’t view them as formal recommendations. Instead, look at them as a starting point for more research. A dividend cut (or halt) can be especially painful, so you’ll still need to do plenty of due diligence.

Fool on.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned.   

More on Dividend Stocks

person with spyglass looks at ocean horizon
Dividend Stocks

This 5.9% Dividend Stock Is One I’ll Never Sell — Here’s Why

This Canadian dividend stock has a great combination of a 5.8% dividend yield, resilient cash flow, and billions of dollars…

Read more »

concept of growth
Dividend Stocks

The Dividend Stock I’d Never Sell, Even in a Downturn

Fortis is a dividend stock I'd hold through a downturn. Its regulated utilities and dividend growth support a patient approach…

Read more »

frustrated shopper at grocery store
Dividend Stocks

2 Dividend Stocks Retirees Can Count on for Decades

These two Canadian dividend stocks offer a great mix of essential businesses, regular dividends, and long-term growth investments that could…

Read more »

customer comparison shops in liquor store
Dividend Stocks

How Much TFSA Income Triggers an OAS Clawback?

The OAS clawback is based on net world income, with a 2025 minimum recovery threshold of $93,454, not on a…

Read more »

ETF is short for exchange traded fund, a popular investment choice for Canadians
Dividend Stocks

Create a Set-And-Forget Portfolio With Just 3 ETFs

Build a set-and-forget portfolio with VCN, XUU, and XEF, three ETFs offering broad exposure to Canadian, U.S., and international stocks.

Read more »

voice-recognition-talking-to-a-smartphone
Dividend Stocks

1 Canadian Dividend Stock Down 22% I’d Buy Right Now

The Canadian dividend stock has witnessed a notable pullback, creating a buying opportunity for investors looking for steady income.

Read more »

Colored pins on calendar showing a month
Dividend Stocks

How to Build a Canadian Portfolio That Pays You Monthly

If you like monthly income, this mix of five real estate, industrials, and energy stocks can pay you attractive monthly…

Read more »

Concept of rent, search, purchase real estate, REIT
Dividend Stocks

The Best Monthly-Paying Dividend Stock on the TSX Right Now

This monthly dividend stock offers an attractive mix of nearly 5% yield, monthly distributions, and a deeply discounted unit price…

Read more »