TFSA: 2 Dividend Stocks Yielding up to 10% to Buy Now

Canada housing continues to impress, which should drive TFSA investors to dividend stocks like Genworth MI Canada Inc. (TSX:MIC).

| More on:

The Canada housing market has enjoyed a huge rebound in the months of June and July. According to the Canadian Real Estate Association (CREA), more homes were sold in July than any other month in the last 40 years. Fortunately, owning real estate outright is not the only way for investors to get in on this hot market. Today, I want to look at two dividend stocks in housing that can generate nice returns and mouth-watering income in a TFSA.

TFSA: This dividend stock is reliable and linked to a booming housing market

Genworth MI Canada (TSX:MIC) is the largest private residential mortgage insurer in Canada. This means that increased activity in the housing market in June and July will hugely benefit its bottom line. Shares of Genworth have dropped 26% in 2020 as of close on August 21. However, the stock is up 21% over the past three months.

TFSA investors should look to target this dividend stock for its consistency and income. In Q2 2020, the company saw premiums written increase 17% from the prior year to $227 million. Net income rose 3% quarter over quarter to $98 million. Transactional new insurance written rose 50%, or $1.6 billion, from Q1 2020. Genworth looks like a fantastic target, as we digest the impressive numbers for the Canada housing market.

Shares of Genworth last possessed a price-to-earnings (P/E) ratio of 7.6 and a price-to-book (P/B) value of 0.8. This puts the stock in very attractive value territory. Moreover, it last announced a quarterly dividend of $0.54 per share. This represents a strong 6% yield. Genworth is a top-shelf dividend stock for any TFSA.

This housing stock can generate huge income in your portfolio

In early June, I’d discussed whether new lending rules introduced by the CMHC would have a negative impact on housing activity. At the time, I’d suggested that Canadians continue to have faith in the housing market due to high demand, an economy that was reopening, and low supply. Bridgemarq Real Estate (TSX:BRE) offered fantastic value when the article was published.

Bridgemareq provides various services to residential real estate brokers and REALTORS across Canada. Its stock has surged 47% over the past three months. The stock is still down 4.5% in 2020. TFSA investors should still feel good about stashing this dividend stock in late August.

In Q2 2020, the company saw revenue dip marginally to $11.4 million compared to $11.8 million in the prior year. Predictably, this weakness was due to slumping activity, as Canada moved to fight the outbreak of COVID-19. Like Genworth, Bridgemarq should see improved numbers on the back of soaring housing activity.

Shares of Bridgemarq last had a favourable P/E ratio of 14. Better yet, it announced a monthly dividend of $0.11.25 per share, which represents a monster 10% yield. Bridgemarq is on the mend with the broader real estate sector. TFSA investors should consider this undervalued stock that offers a tasty monthly dividend.

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.

More on Dividend Stocks

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 »

how to save money
Dividend Stocks

The Smartest Dividend Stocks to Buy With $200 Right Now

These smartest dividend stocks can consistently pay and increase their dividends in the coming years, irrespective of the macro uncertainty.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

3 Utility Stocks That Are Smart Buys for Canadians in November

These utility stocks benefit from regulated businesses and generate predictable cash flows that support higher dividend payouts.

Read more »

Start line on the highway
Dividend Stocks

Invest $10,000 in This Dividend Stock for $600 in Passive Income

Do you want to generate passive income? Forget the rental unit! This option will save you the mortgage yet still…

Read more »

Senior uses a laptop computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

TD Bank (TSX:TD) shares are way too cheap with way too swollen a yield for retirees to pass up right…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Is Brookfield Infrastructure Partners a Buy for its 4.75% Yield?

Brookfield Infrastructure Partners (BIP) has a 4.75% dividend yield. Is it worth it?

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »