Top 5 Dividend Stocks to Supercharge Your TFSA in 2024

If you want the best of the best in 2024, if not far beyond, for your TFSA, these are the five dividend stocks to pick up now.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published June 17, 2024 4:00 pm EDT

The rest of 2024 could be a banger year for investors. The market looks as though it continues to recover. This has come from lower interest rates, dropping inflation, and general positivity about the future of investing. With that in mind, however, there is a way to earn both returns and dividend income through strong dividend stocks.

That’s why today, we’re going to look at five dividend stocks to absolutely supercharge your Tax-Free Savings Account (TFSA) in 2024. Now is the time, so let’s get into it.

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins — Source: Getty Images

Enbridge stock

I usually don’t like investing in oil and gas stocks due to their poor long-term outlook. However, Enbridge (TSX: ENB) could still be a strong investment in 2024 at least. Enbridge stock is a leader in the energy sector with a strong track record of providing reliable dividends.

Despite challenges in the energy sector, Enbridge stock has maintained resilient dividends, supported by its diversified operations and stable cash flows from regulated assets. The company’s dividend yield is currently around 7%, making it an attractive option for income-focused investors. Enbridge stock continues to invest in renewable energy projects, positioning itself for future growth while maintaining strong dividend payouts

Enbridge stock currently provides a 7.59% dividend yield with dividend growth of 26 consecutive years.

Fortis

When considering dividend stocks, utilities are another strong choice. Fortis (TSX: FTS) is a regulated utility company with a 50-year history of consecutive dividend increases. The company’s predictable cash flows and secured capital plan ensure the sustainability of its dividends.

Fortis stock aims to grow its annual dividend by 4-6% through 2028, supported by investments in cleaner energy infrastructure and robust transmission projects. The current dividend yield is approximately 4%, making it a solid choice for long-term investors.

Fortis stock currently holds a dividend yield at 4.4%, with a stable 74% payout ratio. It also boasts over 50 years of consecutive dividend increases.

TD Bank

Another strong option among dividend stocks is Toronto-Dominion Bank (TSX: TD), which also looks like a great deal. TD stock is one of Canada’s largest banks and has consistently paid dividends for 167 years. And this should continue, with plenty of provisions — even for the ongoing money-laundering penalties.

With a dividend yield of around 5%, TD stock offers a compelling combination of income and growth. The bank’s diversified revenue base, strong balance sheet, and strategic acquisitions position it well for continued earnings growth. TD stock’s conservative payout ratio of 40-50% ensures that its dividends are sustainable.

TD stock holds a dividend yield of 5.47%, with a payout ratio of 67%. Furthermore, it has increased its dividend at a compound annual growth rate (CAGR) of 10% over the last 25 years.

Telus stock

Telus (TSX: T) is another solid choice among dividend stocks. Telus stock is a leading telecommunications company in Canada, offering a dividend yield of about 6% over time. The company’s investments in 5G infrastructure and expanding its customer base support its earnings growth.

Despite recent challenges with high-interest expenses, Telus is poised for recovery as interest rates stabilize. The company’s focus on expanding its PureFibre network and 5G coverage is expected to drive future growth and higher dividend payouts.

Telus stock now holds a whopping 7.17% dividend yield through a high 285% payout ratio. This comes from high investment in its 5G network.

Sun Life stock

Finally, Sun Life Financial (TSX: SLF) is perhaps the best of the best in this batch. Sun Life stock is a global financial services company with a strong presence in the insurance and wealth management sectors.

The company has been growing its dividend payouts for the past eight years and currently offers a dividend yield of approximately 4.5% in the last few years. Sun Life’s solid financials, including a return on equity, averaging 14.7% over the last five years, and strong business model support its dividend sustainability. The company’s diverse operations across 28 global markets provide additional growth opportunities.

Sun Life stock currently holds a 4.96% dividend yield with a solid 58% payout ratio. And with eight years of consecutive dividend increases, it offers growth, dividends, and consistency among dividend stocks.