How to Triple Your Payout With 3 TSX Dividend Stocks

High-yield TSX dividend stocks can drive investment returns and even triple the payouts over time through the power of compounding.

| More on:
woman analyze data

Image source: Getty Images

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

Listed Canadian companies help investors drive investment returns when they share a portion of their profits and pay dividends. Dividend earners can supercharge the returns by reinvesting the dividends. Tripling the payout is also possible with high-yield stocks.

The average dividend yield of Birchcliff Energy (TSX:BIR), Doman Building Materials Group (TSX:DBM), and Extendicare (TSX:EXE) is 8.09%. Assuming a conservative baseline of $9,000 ($3,000 in each stock) and constant yield, the total payout on the first year is $728.10.

If you reinvest the dividends every year, your annual dividend payment by year 16 will be approximately $2,338.70. Given the assumptions, the payout triples within the same period regardless of the investment amount.

Strong fundamentals

Birchcliff Energy is underperforming in 2023 (-11.39% year to date), although it has delivered significant returns in 3 years (436.02%). At $7.91 per share, the dividend offer is 9.69%. The $2.1 billion intermediate oil and gas company is forward-looking and commits to generating substantial free funds flow through 2027.

Created with Highcharts 11.4.3Birchcliff Energy PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Management expects to generate a cumulative free funds flow of $1.3 billion from 2023 to 2027. Birchcliff will use excess free funds flow in 2024 to reduce debt and can still fund its common share dividend payments.

The fundamentals remain strong despite the $42.5 million net loss in Q1 2023. Market analysts have a 12-month average price target of $9.78 (+23.6%).  

Strong margins

Doman Building Materials’ investors are happy in 2023. At $7.84 per share, they enjoy a 42.31% year-to-date gain on top of the lucrative 7.33% dividend yield. The $685.9 million company is Canada’s only fully integrated national distributor in the building materials sector. It’s also North America’s leading building materials distributor.

Created with Highcharts 11.4.3Doman Building Materials Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Besides the distribution centres in major cities in Canada and the U.S., Doman operates multiple treatment plants and planning facilities in both countries. The Canwell Fibre division owns vast timberlands in Canada and Hixon Lumber Company, a subsidiary, is a major supplier of wood products.

While consolidated revenues in Q1 2023 declined 18.3% to $710.7 million, net earnings increased 40.7% year over year to $29.2 million. According to its Chairman, Amar S. Doman, the gross margin (17%) was very strong, notwithstanding the macroeconomic uncertainties and tough pricing environment.

Strong recovery

Extendicare delivers quality care and services for Canada’s growing senior population. The $543.6 million company operates long-term care (LTC) homes and retirement communities (owned and managed services). It also provides group purchasing services to third parties.

Created with Highcharts 11.4.3Extendicare PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The business has recovered from the global pandemic, as evidenced by the 97.2% average occupancy rate in LTC homes in Q2 2023 versus 92.5% in Q2 2022. Extendicare’s current strategy focuses on a less capital-intensive, higher-margin business model for LTC and home healthcare.

The acquisition of the Revera Home Health business will expand Extendicare’s platform and make it a national provider of home healthcare services. If you invest today, the healthcare stock trades at $6.45 per share and pays a lucrative 7.27% dividend (monthly payout).

Power of compounding

Dividend investors can take advantage of compound interest. Your baseline grows at an accelerating rate because of more frequent compounding of interest when you reinvest dividends.

Should you invest $1,000 in Dundee Corporation right now?

Before you buy stock in Dundee Corporation, 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 Dundee Corporation 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 $20,697.16!*

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 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

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

How to Turn Your TFSA Into a Gold Mine Starting With Only $10,000

It doesn't have to be complicated or scary. You can turn any portfolio into a major gold mine.

Read more »

ways to boost income
Dividend Stocks

Passive Income: How to Invest Your TFSA Limit in 2025

This TFSA strategy can reduce risk and boost yield.

Read more »

coins jump into piggy bank
Dividend Stocks

Here’s the Average Canadian TFSA and RRSP at Age 25

Are you not meeting the average? Then check out this ETF that can bridge the gap.

Read more »

Person holding a smartphone with a stock chart on screen
Dividend Stocks

3 Canadian Multi-Sector Stocks to Buy and Hold for Built-In Diversification

Here are three of the best dividend-paying Canadian stocks with built-in diversification.

Read more »

grow money, wealth build
Dividend Stocks

Why I’d Allocate $15,000 to Canadian Stocks Now for Building Generational Wealth

With $15,000, a thoughtful allocation across small-, mid-, and large-cap Canadian stocks could offer the right blend of growth, income,…

Read more »

Caution, careful
Dividend Stocks

3 Major Red Flags the CRA Is Watching for All TFSA Holders

The CRA is watching, so make sure you're investing well and avoiding these problems.

Read more »

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

TFSA Investors: 2 Top TSX Stocks With Decades of Dividend Growth

These stocks have great track records of delivering dividend growth in challenging economic conditions.

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

TFSA: Invest $15,000 in This TSX Stock and Create $884 in Annual Passive Income

This TSX stock certainly has quite the long-term outlook -- one that could create passive income now and decades to…

Read more »