The Motley Fool

TFSA Investors: 3 Dividend Stocks Yielding Up to 9.7%

Image source: Getty Images

The S&P/TSX Composite Index climbed 33 points on December 10. Canadian stocks have enjoyed a prolonged and promising run since the market was hit hard in the late winter and early spring. However, investors need to be cautious. The Buffett indicator, one of Warren Buffett’s favourite tools to gauge the value of the market, is flashing overbought signals right now.

There is justifiable optimism as COVID-19 vaccines are starting to be rolled out, but Canadians should not be lulled into a false sense of security. Today, I want to look at three dividend stocks to stash in December. You can store these stocks in a TFSA to keep income flowing even in the event of a pullback.

Why this dividend stock is perfect for a TFSA

Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY) is the first dividend stock I want to look at for our hypothetical TFSA. This is one of the world’s top real estate companies, boasting nearly $100 billion in total assets. Its shares have climbed 42% over the past three months as of close on December 10. The dividend stock is still down 8.9% for the year.

In Q3 2020, Brookfield Property posted a net loss of $135 million compared to net earnings of $870 million in the third quarter of 2019. The COVID-19 pandemic has weighed heavily on the kind of revenue-generating real estate that Brookfield holds a significant stake in. However, a gradual reopening in 2021 should bring its assets back into good graces.

Shares of Brookfield Property last possessed a favourable price-to-earnings ratio of 10 and a price-to-book value of 0.5. Moreover, it offers a quarterly dividend of $0.333 per share, which represents a monster 8.7% yield. Canadians can gobble up attractive income and pay no taxes on it in their TFSA.

A dividend heavyweight worth owning forever

Enbridge (TSX:ENB)(NYSE:ENB) is the second dividend stock Canadians should consider for their TFSA. Shares of this energy infrastructure giant have climbed 11% month over month. Last month, I’d suggested that investors should ignore the Michigan controversy and continue to target this dividend heavyweight.

In the third quarter of 2020, the company delivered GAAP earnings of $990 million or $0.49 earnings per share – up from $949 million or $0.47 per share in the prior year. However, adjusted earnings per share fell to $0.48 over $0.56 in Q3 2019. Fortunately, Enbridge has still been able to meet its distributable cash flow (DCF) target.

On December 8, Enbridge bumped up its quarterly dividend to $0.835 per share, which represents a very attractive 7.6% yield. The dividend stock also possesses a solid P/B value of 1.5. Enbridge is still a great dividend stock to stash in a TFSA.

One more dividend stock to add to your TFSA right now

Slate Grocery REIT (TSX:SGR.UN) is and owner and operator of grocery-anchored real estate in the United States. While REITs have been shaky during the pandemic, grocery retail is a space that you can rely on during this crisis. Shares of Slate Grocery REIT have increased 12% over the last three months.

This dividend stock last had an attractive P/E ratio of 11. In Q3 2020, the REIT saw occupancy increased 0.3% to 92.5%, while net income rose $3.1 million year over year. This dividend stock offers a monthly distribution of $0.072 per share, representing a mouth-watering 9.7% yield.

While we are looking at stocks to add before 2021 . . .

Motley Fool Canada Makes 5G Buy Alert

5G is one of the greatest arrivals in technology since the birth of the internet. We could see plenty of new wealth-building opportunities in 2021 that would potentially dwarf any that came before them.

5G has the potential to radically change our lives and society as we know it, but if you’re an investor, the implications are even greater — and potentially much more lucrative.

To learn more about it and its revolutionary potential to change the industry — and potentially your bank account — click on the link below to get the full scoop.

Learn More Today!

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends Brookfield Property Partners LP.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.