TFSA Investors: 3 Dividend Stocks I’d Buy With $6,000

Enbridge (TSX:ENB)(NYSE:ENB) and two other dividend stocks could make you filthy rich through the 2020s.

If you’ve yet to put your latest $6,000 TFSA contribution to work, you may want to consider buying the following attractively valued stocks for the next decade while they’re cheap. In no particular order, here they are.

Nutrien

With shares hovering around their 52-week lows, Nutrien (TSX: NTR)(NYSE: NTR) is a dirt-cheap way to play the global fertilizer market. Given the magnitude of the stock’s drop, a 3.82% dividend yield isn’t much to write home about.

When you consider the magnitude of forward-looking dividend growth and the rebound potential in a recovering fertilizer price environment, only then does it become apparent that Nutrien is a quality name that’s trading at a discount to its intrinsic value.

Nutrien is still a play on potash, but with a robust retail business and encouraging acquisitions, the company can continue generating ample amounts of free cash flow, even if potash prices don’t suddenly skyrocket higher in the new year, boding well for the growth profile of the dividend.

With shares trading at just 1.2 times book, I’d also say there’s a significant margin of safety with the name, even if agricultural commodities were to remain lower for longer.

Enbridge

Enbridge (TSX: ENB)(NYSE: ENB) has been clobbered ever since the oil plunge of 2014. As of late, the stock has been picking up some meaningful momentum, with shares now up 23% from their August 2019 bottom.

Although recent progress has been encouraging, the stock is still 19% off its all-time highs, and the stock remains depressed given the stable nature of its cash flows and a capital return structure that continues to pay significant dividends.

Future regulatory hurdles may derail recent momentum, but as shares continue to test new 52-week highs, I’m one to believe that the worst is already in the rear-view mirror. Management is calling for 2020 EBITDA of $13.7 billion and discounted cash flow (DCF) guidance of $9.4 billion — two targets that I think are quite conservative, leaving ample room for a surprise beat.

TC Energy

Sticking with the pipeline theme, we have TC Energy (TSX: TRP)(NYSE: TRP), an energy infrastructure company that’s the epitome of resilience. Like Enbridge, TC Energy has a capital return structure that’s calling for 8-10% in annual dividend growth over the intermediate term. To finance such a dividend-growth commitment, TC Energy has plenty of encouraging projects with approximately $30 billion worth of secured capital developments.

The energy sector has been a horrid place to invest, unless you’re a shareholder of TC Energy — a winner that keeps on winning. The energy infrastructure kingpin has effectively spread its bets across Canada, America, and Mexico. With more dividend growth up ahead, I wouldn’t hesitate to pick up shares even, at all-time highs.

Despite being one of the biggest TSX winners over the past year, the stock still trades at a modest 17.6 times next year’s expected earnings and just 2.5 times book.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends Nutrien Ltd.

More on Dividend Stocks

A series of red ladders lead to successively higher levels
Dividend Stocks

Higher Rates Are Back: Can Brookfield Infrastructure Keep Growing Its Payout?

Brookfield Infrastructure's growing cash earnings support its payout, with financing costs setting the pace of the next increase.

Read more »

Business doodle about dividends on chalkboard
Dividend Stocks

2 Canadian Dividend Stocks I’d Buy and Hold for Life

See why Canadian Natural Resources and CN Rail deserve a spot in a buy-and-hold dividend portfolio built to last for…

Read more »

man looks worried about something on his phone
Dividend Stocks

Telus vs. BCE: Which Dividend Looks Better After the Cuts?

Telus and BCE now offer similar starting yields, making payout coverage and recovery demands the more useful comparison.

Read more »

dividends can compound over time
Dividend Stocks

Tamarack Valley Plans a 20% Dividend Hike: Why, and What Investors Should Know

Tamarack Valley plans a 20% dividend boost tied to its $10 billion Headwater merger. See what free cash flow, dividend…

Read more »

A worker wears a hard hat outside a mining operation.
Dividend Stocks

Toromont Stock Jumps 8% as Its Order Backlog Balloons to $2.9 Billion (More Than Double Last Year’s)

Considering its strong third-quarter results, substantial order backlog, healthy growth prospects, and consistent dividend payments, Toromont could be an attractive…

Read more »

shoppers in an indoor mall
Dividend Stocks

What $20,000 in CT REIT Could Pay You Without Selling a Single Unit

CT REIT could turn a $20,000 investment into roughly $93 a month, with rent and payout coverage doing the supporting…

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Withdrawals in Retirement: A Tax-Free Source That Can Protect Your Benefits

If you hold Fortis (TSX:FTS) stock in a TFSA, you can withdraw the dividends tax-free.

Read more »

various pizza in boxes in a row for lunch
Dividend Stocks

A Tailor-Made TFSA stock: A 7.3% Yield With Monthly Paycheques

Pizza Pizza Royalty Corp (TSX:PZA) has a very high yield paid monthly.

Read more »