TFSA Investors: 3 Dividend Stocks Yielding Up to 9%

Empire Company Limited (TSX:EMP.A) and these two other stocks are great options for dividend investors in need of some recurring cash flow for their portfolios.

| More on:

If you’re a dividend investor looking for some quality stocks to put into your TFSA, then you know that yield is always going to be an important consideration. While it’s not the only factor, it is a very important one. Below are three stocks that offer a variety of different payouts for your portfolio that can help you earn a lot of income along the way.

Stable choice

Empire Company Limited (TSX:EMP.A) is a good place to start. Although it doesn’t offer a terribly high payout, the grocery retailer can offer a great deal of stability. Whether you’re worried about a recession or just looking to buy and hold for a long time, Empire can be a great starting point.

The company owns some of the top grocery chains in the country, including Sobeys, Safeway, IGA, and many others. It’s a good defensive stock to hold that can balance out your portfolio in troubling times.

Over the past 12 months, Empire’s stock has climbed around 50%. With consistent profits and quarterly sales normally up over $6 billion, investors know what to expect from the stock. Empire also provides a solid dividend of 1.4% per year. And while the dividend may not be the largest, with a payout ratio of around 30%, it’s a fairly safe one with room to grow.

Financial strength

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is always a solid option for TFSA investors. While there may be a bit more volatility surrounding the stock than there is Empire, TD still provides an essential service for customers in being able to safely store their money while also providing consumers with a way to obtain more of it.

The stock is also very strong financially as profits have been north of $10 billion in each of the past two years and the top bank stock is on pace for another great performance in fiscal 2019.

With impressive profits and lots of cash flow, TD is one of the best dividend stocks that you can own on the TSX as it currently pays investors around 4% per year. And with TD’s shares not showing much growth over the past 12 months, the stock could be overdue for a rally over the next 12 months, especially if a downturn doesn’t happen. And that’s why investors could be getting a good deal by locking in the stock at its current price.

High dividends

Pizza Pizza Royalty Corp (TSX:PZA) is the highest-yielding stock on the list, paying investors an impressive 9% in dividends each year. Concerns about the stock’s yield are never too far away and the good news is that the company has been generating free cash flow consistently over the past four quarters.

The bad news is that dividends paid have been more than free cash, although the gap hasn’t been big as dividends over the past four quarters have totalled $28.7 million compared to free cash flow of $27.5 million.

While the dividend yield doesn’t look to be in bad shape today, investors buying Pizza Pizza stock for its payouts are taking on some risk. Not only in the dividend potentially being cut, but with the stock not being the strongest performer, losing more than 40% of its value over the past two years.

While in 12 months it has climbed 11%, the stock has proven to be a bit volatile this year and a bad quarterly performance could sink shares of Pizza Pizza in a hurry. For now, it’s a great dividend buy, but it’s not a stock I’d recommend just buying and forgetting about.

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 David Jagielski has no position in any of the stocks mentioned. The Motley Fool owns shares of PIZZA PIZZA ROYALTY CORP.

More on Dividend Stocks

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Invest Your $7,000 TFSA Contribution in 2024

Here's how I would prioritize a $7,000 TFSA contribution for growth and income.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »