TFSA Investors: 3 Rock-Solid Dividend Payers Yielding up to 7.7%

Start creating your own TFSA passive-income machine with Choice Properties REIT (TSX:CHP.UN), Rogers Sugar (TSX:RSI), and Great-West Lifeco (TSX:GWO).

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Many investors are using a similar strategy with their TFSAs. They’re loading the account with rock-solid dividend payers, hoping to create a nice tax-free income stream come retirement.

Even though the market has recovered nicely from March’s lows, many investors are still worried about the future of their dividend portfolios. They’re looking for solid dividend payers, the kinds of stocks that will continue their dividends, no matter what happens to the underlying economy.

And, of course, these investors also want succulent dividend yields.

It turns out you can have your cake and eat it, too. Here are three excellent dividend stocks offering attractive yields — perfect companies to use as the bedrock of your TFSA income portfolio.

Choice Properties

Choice Properties REIT (TSX:CHP.UN) primarily owns grocery-anchored real estate, although the company has been working on diversifying itself ever since it was spun off from its former parent, Loblaw. As it stands today, the portfolio consists of 724 different properties spanning more than 65 million square feet of gross leasable space. It is a behemoth in the real estate space.

Owning a bunch of grocery stores might not seem that sexy, but there are a few reasons why it’s an attractive sector to invest in. Supermarkets are steady businesses that actually benefit from an uncertain economy. They make terrific tenants. And there’s ample opportunity to redevelop some of these sites into more dense assets as cities expand around them. Choice has nearly 20 active redevelopment projects on the go with plans to do many more over time.

One of the biggest reasons why investors should stash Choice Properties shares in their TFSA is the company’s generous dividend. The current payout is 5.7%, an excellent yield in today’s low interest rate world. And remember, Choice has hiked its distribution steadily since its 2013 IPO.

Rogers Sugar

Another boring dividend payer that would look great in your TFSA is Rogers Sugar (TSX:RSI). This steady stock offers an excellent dividend yield of 7.7%. That alone is enough to consider stashing the stock away.

I also think the company offers solid capital gains potential. Remember, Rogers Sugar shares traded above $6 each as recently as 2019. Once the company can prove its diversification effort into maple syrup is paying off, shares should go back to that range. That’s a 30% potential gain. And investors are protected on the downside from the company’s obvious moats, which include limitations on foreign sugar and high costs to get into the business.

Rogers Sugar has paid its generous dividend since 2011, when it converted from an income trust to a corporation. You can count on the payout over the long term.

Great-West Lifeco

Great-West Lifeco (TSX:GWO) is one of Canada’s largest financial institutions with more than $1.6 trillion under management. The company has various insurance subsidiaries in Canada, the United States, and Europe, as well as managing various types of investments for both its own internal funds and outside investors.

Naturally, COVID-19 and its potential impact on the economy sent Great-West shares sharply lower. Investors were both concerned about higher-than-normal life insurance payouts and the affect low interest rates would have on the portfolio. Analysts are still worried about 2020’s potential earnings, but they project the company will still earn $2.59 per share. That puts shares comfortably under 10 times forward earnings expectations.

The company offers one of the most generous yields in the entire financial sector; the current payout is 7.4%. Even if earnings don’t reach expectations this year, Great-West Life has a solid balance sheet. It’ll be able to afford its dividend. In fact, the company could even choose to keep its dividend-growth streak alive in 2021, which would be the eighth consecutive year of increases.

The bottom line on these excellent TFSA stocks

If you’re looking to turn your TFSA into a passive-income machine, then it’s time to add dividend stalwarts like Choice Properties REIT, Rogers Sugar, and Great-West Lifeco to your portfolio. Your future self will thank you.

Should you invest $1,000 in Air Canada right now?

Before you buy stock in Air Canada, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Air Canada wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $18,750.10!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 35 percentage points since 2013*.

See the Top Stocks * Returns as of 1/22/25

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 Nelson Smith owns shares of GREAT-WEST LIFECO INC and ROGERS SUGAR INC.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Dividend Stocks

calculate and analyze stock
Dividend Stocks

The Best Canadian Stocks to Buy Right Now With $3,000

Just because you don't have tens of thousands in the bank doesn't mean your investments can't get there.

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

2 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for A Decade

These dividend stocks have resilient payouts and offer ultra-high yields, making them top investments to generate solid passive income.

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

1 “Growthy” Dividend ETF to Buy to Generate Passive Income

This Canadian dividend ETF offers a decent monthly yield in addition to good share price appreciation potential.

Read more »

a person looks out a window into a cityscape
Dividend Stocks

This 7.6% Dividend Stock Pays Cash Every Single Month

This monthly paying dividend stock is a top choice for investors looking for long-term passive income.

Read more »

Hand Protecting Senior Couple
Dividend Stocks

Retirees: 2 Dirt-Cheap Dividend Stocks to Buy in January

Rogers Communications (TSX:RCI.B) and another dirt-cheap stock may be buys for the next five years and beyond.

Read more »

Lights glow in a cityscape at night.
Dividend Stocks

5 Canadian Dividend Stocks Everyone Should Own

These Canadian stocks have a solid track record of dividend growth and offer compelling yields near their current market price.

Read more »

dividends can compound over time
Dividend Stocks

Want Decades of Passive Income? 4 Stocks to Buy Now and Hold Forever

These four stocks are some of the highest-quality investments you can buy now, offering investors a mix of high yields…

Read more »

sale discount best price
Dividend Stocks

2 Bargain TSX Stocks to Buy While They Are Still Cheap

These stocks look cheap and pay attractive dividends.

Read more »