Millennials: Do You Trust Your Partner?

You do a lot with your partner, but if you really trust them you should combine your TFSA contribution room for a dividend monster portfolio.

| More on:
Overhead shot of young adults using technology at a table

Image source: Getty Images

Millennials are at that age — the age at which you really need to start figuring things out. There’s a house to buy, car payments to make, a career to secure, and a partner to find. And that partner can make or break the other former points. Between the two of you, all those other payments fall in half. So it’s a good idea to find someone you can trust.

Yet there’s another way that millennials can find trust in their partners — the Tax-Free Savings Account (TFSA). The TFSA is the perfect spot for investment, and again – if the two of you have the funds – the perfect place for a trustworthy couple to put their cash. Between the two of you, there is currently $139,000 worth of TFSA contribution room. That’s a lot of dough to work with.

So if you trust your partner, you can both set yourselves up for an ideal retirement. Better still, find strong dividend stocks with a solid future. That way you can bring in cash toward reinvesting in your stocks or paying for that house and car.

Here are some perfect stocks for you millennials to consider.

CIBC

If you’re a retiree, you’re probably not going to want to choose Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM). The stock is currently in a solid fifth place among the Big Six Banks in Canada based on assets.

It’s the most Canadian focused of the big banks, so it’s not going to get the U.S. cash when the stock market rebounds that other bank will get. It’s also the most exposed to the housing industry, so the current housing crisis will hurt this bank.

But for millennials, it’s the perfect opportunity. The bank has a price to earnings ratio of 10.76, making it a huge deal for long-term investors. For those willing to stick it out, this stock will come back and come back strong. Shares are still 15% below the stock’s 52-week high. It also boasts the highest dividend yield of the bank stocks at 6.11% as of writing.

Canadian Natural Resources

When it comes to energy stocks these days, it’s better to go big or go home. Don’t fall for high dividend yields from small energy companies. Rather, go with a company like Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ), one of Canada’s largest oil and gas companies, the largest natural gas producer, and the largest private landowner in Western Canada second only to the government.

The stock has only been rising since its last earnings report. And while its peers are cutting dividends, the company raised its dividend by 13% during the last quarter. With a 10.8 price to earnings ratio, it’s a super deal thanks to the poor market for millennials looking to invest long term. Shares are still down more than 30% as of writing, with a dividend yield of 6.2% as of writing.

Pembina Pipeline

The ultimate dividend stock has to be Pembina Pipeline Corp. (TSX:PPL)(NYSE:PBA). Pembina offers investors a solid present and future. Pembina has been weighed down by the energy sector, but it’s providing the solution to the oil and gas glut by creating pipelines — a lot of them.

The company had $5.6 billion in secured growth projects coming down the pipe. Meanwhile, its long-term contracts make up most of its current cash flow, leaving its dividend safe and secure.

Millennials can still get in on this stock while it’s below its 52-week high, as the stock trades at 30% below peak prices. But analysts believe this stock will spike a lot sooner than the others mentioned here, as it currently has a P/E ratio of 14.37. But its strong dividend yield isn’t going anywhere, at 7.18% as of writing.

Bottom line

If you trust your partner, millennials could absolutely split that $139,000 three ways toward these three stocks. If done evenly, that would bring in a whopping $8,645.86 every year. With cash like that, your mortgage will be paid off in no time.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe owns shares of PEMBINA PIPELINE CORPORATION. The Motley Fool recommends PEMBINA PIPELINE CORPORATION.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »

sale discount best price
Dividend Stocks

1 Dividend Stock Down 11 Percent to Buy Right Now

Do you want a great dividend stock down 11% that can provide years of growth potential? Here's one heavily discounted…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Are you looking for dividend stocks to buy right now? Here are two top picks!

Read more »

edit Taxes CRA
Dividend Stocks

Tax Time: How to Keep More of Your Money

Nearly everyone hates paying taxes, although Canadians can lessen the financial pain with the right tax strategies.

Read more »