Do you want to open a TFSA and enjoy tax-free income flowing into your account on a consistent basis?
If so, dividend stocks are the name of the game.
Although most dividend payers are pretty milquetoast, with yields around 3%, there are plenty of high-yield options available. These high yielders can get you as high as $10,000 a year with just $100,000 invested. Plus, all that income is tax-free in a TFSA. The really cool part about all this is that TFSA income isn’t treated as income on withdrawal, so you can shelter your dividends in the account and then transfer them to your chequing account for whatever purpose you like later.
The following are three high-yield dividend stocks and REITs that can kick your TFSA income into hyperdrive.
BTB REIT (TSX:BTB.UN) BTB REIT is the rare dividend pick that offers a high yield AND safety. With a 9% yield as of this writing, you need only a little over $100,000 to get $10,000 in annual income from it. That’s the kind of yield that makes dividend investors salivate. Often, such over-the-top yields often come with the risk of being cut. Not so with BTB. With a five-year uninterrupted streak of paying its distribution every month, that payout is as safe as any.
Slate Office REIT (TSX:SOT.UN) Slate Office is another REIT with a hefty yield and a solid payment history. As a pure play office space investor, it has no exposure to the slowing housing market — a concern with certain other REITs. Slate office has a whopping 10.9% yield as of this writing, which makes it an ultra-high yielder. And if you think that high yield comes at a huge risk, think again: Slate Office has been paying its dividend each month without a hiccup for the past two years.
Just Energy Group (TSX:JE) REITs tend to round out the ultra-high yield category of the dividend stock roster. That doesn’t mean there aren’t some very high yield conventional stocks out there as well, however. Just Energy Group is an energy company that sells natural gas and electricity. The company’s earnings have been somewhat of a wild ride over the past few quarters, with dramatic swings in net income. Nevertheless, the company has managed to pay its dividend every single quarter since 2014.
Oh, and on the topic of Just Energy’s dividend: thanks to the walloping the stock has taken over the past five years, it sits pretty at 10.69%. While it might seem scary to buy a stock that has been trending downward for five years, 10% in dividends alone is a TSX-beating return at this point. And with none other than Warren Buffett having recently invested in Suncor Energy, the energy sector may be set for a comeback.
Fool contributor Andrew Button has no position in any of the stocks mentioned.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2019