TFSA Investors: 3 Dividend Stocks Yielding Up to 9.8%

Hydro One Ltd (TSX:H) and these two other stocks can generate lots of recurring income for your TFSA without putting your portfolio at risk.

| More on:

If you have room in your tax-free savings account (TFSA) and are looking for some quality dividend stocks to put into there, then I’ve got just the investments for you. Below are three stable, income-generating stocks that can generate recurring cash flow for your TFSA and help it grow in value. One of them is yielding as much as 9.8%!

Hydro One

Utility company Hydro One Ltd (TSX:H) is a great buy-and-forget stock to put into your TFSA. While there is some volatility in the company’s financials, Hydro One is generally pretty consistent. In its third-quarter earnings, its revenue (net of purchased power) was $910 million and just $54 million higher than it was during the same period last year, which the company credits mainly due to higher demand.

Currently, Hydro One pays its shareholders a quarterly dividend of $0.2536, which on an annual basis yields 3.5%. There are higher-yielding stocks available, but what you’ll love about this investment is its stability. With the Ontario government a significant shareholder, you don’t have to worry about the company taking on too many risks or being too aggressive with expansion. Year to date, shares of Hydro One are up over 14%.

Maple Leaf Foods

Another good, safe stock to put into your TFSA is Maple Leaf Foods (TSX:MFI). The company’s food products are found in grocery stores across the country and its brands are household names.  Since its products are necessities, especially as people spend more time eating at home than in restaurants right now, the business should also make for a stable investment.

The stock has risen more than 7% this year and also pays a dividend that today yields 2.3%. Your total return from owning the stock this year would be close to 10%, which is not too bad for a low-risk stock during a year as volatile as 2020.

Investing in Maple Leaf Foods also gives investors the ability to tap in to the growing popularity of plant-based meat products. The company owns Lighlife, which makes a variety of plant-based foods, including burgers and hot dogs. While that hasn’t translated into skyrocketing sales numbers just yet, it’s one of the better Canadian stocks to buy if you’re bullish on alternative meat products.

Slate Grocery

If you want to invest a bit broader than just food products, you should also consider Slate Grocery REIT (TSX:SGR.UN). The real estate investment trust (REIT) allows you to benefit from the stability of U.S. grocery stores while also enjoying U.S.-based dividends that can rise in value if the Canadian dollar struggles.

The REIT’s portfolio is made up of properties anchored by grocery stores, which makes it a lot more stable than a REIT that’s full of shopping centres and where your investment might be very risky right now.

The REIT pays a monthly dividend of US$0.072 and so your dividend payments will undoubtedly vary depending on the exchange rate. Today, however, you can earn a dividend yield of about 9.8%. Slate Grocery can help you diversify your portfolio outside of the Canadian market and allow you to collect a great dividend along the way.

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 David Jagielski has no position in any of the stocks mentioned. 

More on Dividend Stocks

woman retiree on computer
Dividend Stocks

Should You Buy Telus Stock at $20?

Down 40% from all-time highs, Telus is a beaten-down TSX dividend stock that trades at a discount to consensus price…

Read more »

top TSX stocks to buy
Dividend Stocks

Here’s Exactly How $15,000 in a TFSA Could Grow Into $200,000

Canadians with sizeable TFSA balances today have utilized the full potential of the investment vehicle.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

The 1 Canadian Stock I’d Buy and Hold Forever in a TFSA

Don't get complicated. Consider this Canadian stock as a long-time buy.

Read more »

Man data analyze
Dividend Stocks

A Top-Performing U.S. Stock That Canadian Investors Really Should Own

This top US tech stock is something you cannot miss out on, and there’s another from Canada that you need…

Read more »

how to save money
Dividend Stocks

3 Premium TSX Dividend Stocks Worth Loading Up On

These three premium TSX dividend stocks remain among the best bets for long-term investors seeking stable total returns.

Read more »

Hand Protecting Senior Couple
Dividend Stocks

3 Canadian Dividend Stocks Perfect for Retirees

These three Canadian stocks are ideal for retirees.

Read more »

Middle aged man drinks coffee
Dividend Stocks

Should You Buy Goeasy Stock While It’s Below $170?

Goeasy stock still looks like a winner, so why is the stock price down below $170?

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Maximizing Your TFSA: Smart Investment Moves for 2025

Stocks like Enbridge provide significant dividend income, which is ideal for tax-savings within your TFSA.

Read more »