The Tax-Free Savings Account (TFSA) has been available to Canadian investors for over a decade. This account allows Canadians to accumulate tax-free capital growth. Alternatively, they can pursue income-oriented or balanced strategies in this highly versatile investment vehicle. Today, I want to discuss how investors may want to navigate in their TFSA as volatility picks up. I’ll zero in on three stocks that you can trust for years and decades to come.
Here’s a stock that offers monster income and a long history of dividend growth
Enbridge (TSX:ENB)(NYSE:ENB) is a North American energy infrastructure giant and one of the largest stocks on the TSX by market cap. Its shares have climbed 29% in 2021 as of close on October 15. The stock is up 37% year over year.
With Enbridge, TFSA investors can keep faith in the company due to its massive project pipeline. Moreover, it really packs a punch on the income side. In the first half of 2021, Enbridge has delivered adjusted EBITDA of $7.04 billion — down marginally from the prior year. Meanwhile, adjusted earnings rose to $2.99 billion compared to $2.80 billion in the first six months of 2020.
Shares of Enbridge possess a favourable price-to-earnings (P/E) ratio of 17. It last paid out a quarterly dividend of $0.835 per share. That represents a tasty 6.3% yield. Better yet, Enbridge has delivered dividend growth for a quarter century. TFSA investors can gorge on Enbridge’s big dividend and depend on this energy giant for the 2020s and beyond.
This is a stock you can trust forever in your TFSA
Utilities have proven to be highly dependable for Canadian investors for many decades. TFSA investors who want stability may want to pursue equities in this space. These stocks do not offer explosive capital growth or huge dividends, but their dependability is a solid tradeoff. Emera (TSX:EMA) is a Nova Scotia-based utility company.
Shares of Emera have climbed 9.3% in 2021 as of close on October 15. The stock is down marginally in the year-over-year period. In the first half of 2021, the company has delivered adjusted earnings-per-share growth of 17% to $1.49. The company was powered by higher earnings contribution from EES and PGS. Emera has pushed forward a $7.4 billion capital investment plan aimed to bolster its rate base.
This utility stock offers a quarterly dividend of $0.662 per share, representing a solid 4.5% yield. TFSA investors should also be attracted to its favourable P/E ratio of 24.
TFSA investors: One more safe stock to consider for the long haul
Canadian banks stocks are renowned for their stability. TFSA investors on the hunt for balance in their portfolios should consider Bank of Montreal (TSX:BMO)(NYSE:BMO) and its peers. Shares of BMO have climbed 38% in 2021 as of close on October 15. The bank stock is up 66% from the prior year.
In Q3 2021, BMO delivered terrific adjusted net income growth of 82% to $2.29 billion. Like its peers, it benefited from a sharp drop in provisions set aside for credit losses. BMO’s Canadian Personal and Commercial Banking segment delivered net income of $815 million — up $496 million from the previous year.
Shares of this stock possess a favourable P/E ratio of 12. You can also gobble up a quarterly dividend of $1.06 per share in your TFSA. This represents a 3.2% yield.