Tax-Free Savings Account (TFSA) investors should resist the urge to try to clock in impressive gains in the near term. Markets move in mysterious ways, especially when most others are feeling better about putting their hard-earned dollars in stocks, with a willingness to pay up a bit of a premium. Indeed, 2023 was a hard year to invest. Everybody was worried about a recession that had yet to land.
In 2024, it feels pretty good to be an investor, especially if you rode the surge in mega-cap tech stocks higher last year. However, when good feelings turn euphoric, it may be time to ring the register or, at the very least, look to other parts of the market that may be able to offer you a better deal for your investment dollar.
In the high-yield universe, I see plenty of value opportunities, many of which may be ignored by everyday investors. So, while a market correction could strike (likely from our blind spots!), TFSA investors should gear up to play the long game. That entails dealing with periods of time when markets don’t rise. At the end of the day, it’s the long game that’s the only one worth playing as a new investor looking to build wealth.
Without further ado, let’s dig into the two high-yielding plays that I view as reasonably priced (even cheap) for investors looking to do well over the next five years.
Enbridge
Enbridge (TSX:ENB) is the pipeline firm with a dividend that’s tended to stand tall, even through the most sluggish of industry environments (remember when oil prices nosedived, eventually dragging down all plays across the stream nearly a year ago?).
Today, Enbridge stock’s dividend yield stands particularly tall at 7.4%. Now, I’m not one for encouraging chasing high dividend yields. However, in today’s high-rate world (it won’t stay high forever, folks), I view Enbridge’s dividend as not only sustainable but with the potential to grow over the next decade.
Enbridge stock has gained almost 15% since its October 2023 lows, but I don’t think it’s done yet. For 2024, I expect the rally to continue as the firm continues to do its best to balance its hefty payout with growth projects. All considered, ENB stock’s yield is too towering to say no to if you’re on the hunt for huge passive income.
Quebecor
Quebecor (TSX:QBR.B) is another dividend play that’s easy to overlook. Shares of the regional telecom trade at 11.94 times trailing price to earnings to go with a 3.65% dividend yield. Despite interest in becoming a major contender in telecom at the national level, many investors have seemed to overlook the firm’s long-term growth prospects.
The telecom scene is really hard to break into, after all. But just because the telecom heavyweights have had their way doesn’t mean it’ll always be like this, especially as Canadians (and the government) root for the underdogs that promise to increase competition in the telecom industry.
With shares stuck in a multi-year consolidation channel (in the $30-35 range), QBR.B seems like an untimely play. However, as the firm continues investing in growth, I find it could break out at any time as it looks to grab a slice of the riches the Big Three telecoms have been capturing, for the most part.
Yes, the dividend yield isn’t as competitive as some of its much larger rivals. However, if you seek long-term growth and income in the present, QBR.B stands out as potentially the best telecom play of the batch.
