TFSA Investors: 3 TSX Dividend Stocks That Are Serious Bargains Today!

Looking to boost growth, income, and value in your Tax Free Savings Account? Check out my three top TFSA stock picks to buy in August!

| More on:

With the TSX Index hitting highs since the March market crash, it is harder to find solid value/dividend stocks to add to your Tax-Free Savings Account (TFSA). One thing to note with the TFSA is that you can’t apply capital losses against any other investment gains. The TFSA is completely tax sheltered and segregated from other non-registered investments you might own.

So you want to own stocks that are safely and steadily “going up.” Look for stocks with strong balance sheets, a long history of growth, well-covered dividends, and great future growth prospects. Below are three TSX stocks that meet these criteria and would be perfect adds for your TFSA portfolio in August.

TFSA stock 1: Telus

The first TFSA stock to buy is Telus (TSX:T)(NYSE:TU). In my opinion, Telus is one of the most attractive Canadian telecom stocks. Year-to-date the stock is down about 5% and it is trading with an attractive 4.87% dividend.

While it faced challenges in its recent second quarter, it fared much better than peers like BCE and Rogers. Telus actually grew revenues by 3.6% year over year. Adjusted EBITDA only declined by ~3%. Telus added a strong 114,000 net new customers in the quarter.

Rather than purchasing costly sports/entertainment franchises, Telus has been investing in digital growth verticals. Telus International is beginning to meaningfully contribute to organic EBITDA growth and Telus Health is now the top provider of digital health services in Canada.

Combine these verticals with solid wireless and wireline businesses, and Telus has an intriguing investment thesis for a long TFSA hold.

TSX stock 2: WSP Global

WSP Global (TSX:WSP) is another great TFSA stock that demonstrates a strong history of growth. It is a consulting, engineering, and design firm that has been rapidly consolidating the global design/consulting sector.

It just reported solid second quarter results. Although net revenues were down 1.2% since last year, adjusted EBITDA was up 4%, and net earnings per share were in line with the prior year at $0.83. Interestingly, its backlog increased 5.9% from December 31, 2019 to a record $8.6 billion (or 11.5 months of revenue).

This stock is interesting, firstly because it has large exposure to infrastructure and transportation design/engineering. It could enjoy some major tailwinds from global government infrastructure stimulus spending.

Secondly, WSP significantly reduced its debt burden last quarter down to 0.4 times net debt to adjusted EBITDA (from 1.1 times). The company is in a strong financial position to self-fund its growth by consolidation strategy.

Finally, the company pays a 1.75% dividend that is well funded by strong free cash flows ($410 million this quarter). The stock is down about 11% from its February highs with many years of upside in your TFSA.

TFSA stock 3: Dream Industrial REIT

Looking for an income boost for your TFSA? Dream Industrial REIT (TSX:DIR.UN) is a perfect dividend stock with turnaround potential. This REIT owns industrial properties across Canada, the U.S., and Europe. Its stock is down ~17% year to date, and it trades with a really attractive dividend yield (6.3%) and valuation (~5% discount to net asset value).

Despite some challenges presented by COVID-19, DIR’s portfolio has upheld relatively well. Occupancy sits at 95.6%. Over the second quarter, it collected almost 98% of rents due. Except for western Canada, the portfolio is seeing solid rental rate growth from strong thematic demand for industrial property.

DIR has a great balance sheet with 28.1% net debt to assets and over $1.2 billion of unencumbered assets. It is finalizing two very attractive acquisitions in Germany and is in exclusive negotiations for four properties in the Netherlands and one in Montreal. DIR has about $300 million of dry powder to meet its leverage target, so it still has ample room to grow this year.

Considering its cheap valuation, great dividend, and growth potential, this is a great stock to buy for your TFSA today!

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 Robin Brown owns shares of DREAM INDUSTRIAL REIT and WSP GLOBAL INC. The Motley Fool recommends DREAM INDUSTRIAL REIT and ROGERS COMMUNICATIONS INC. CL B NV.

More on Dividend Stocks

Hand Protecting Senior Couple
Retirement

These 2 Dividend ETFs Are a Retiree’s Best Friend

These two dividend ETFs could provide retirees with a diversified and stable income stream, while providing some price appreciation.

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Earn $2,000 in Passive Income in 2025 With Less Than $51,000 in Savings

You can invest in Canadian high yield stocks via the Vanguard FTSE Canadian High Yield Dividend ETF (TSX:VDY).

Read more »

monthly desk calendar
Dividend Stocks

This 7.8% Dividend Stock Pays Out Every Month

Not all monthly dividend stocks are created equal. And this top stock is certainly a strong choice for passive income.

Read more »

A worker gives a business presentation.
Dividend Stocks

Is TMX Group Stock a Buy, Sell, or Hold for 2025?

TMX Group (TSX:X) stock has been a consistent wealth-builder, generating 4,630% in total returns since 2002. Should you buy, sell,…

Read more »

Man data analyze
Dividend Stocks

2 Deeply Undervalued Dividend Stocks to Buy in November

Here are two stocks that I view as deeply undervalued this November.

Read more »

Dividend Stocks

The 2 Best Canadian Blue-Chip Stocks to Buy Now

Blue-chip stocks can be some of the best stocks to have in any portfolio. But when they're trending upwards, investors…

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These top dividends stocks have consistently paid and increased their dividends. Further, this trend will continue.

Read more »

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »