TFSA: 3 Top TSX Stocks for Your $7,000 Contribution

Dividend stocks like these are your best option when trying to make that $7,000 contribution room work as much for you as possible.

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The Tax-Free Savings Account’s (TFSA’s) $7,000 contribution limit for 2024 is a fantastic opportunity to create a passive-income stream, and here’s why. By investing that contribution in dividend-paying stocks, exchange-traded funds (ETF), or other income-generating assets, Canadians can watch your money work for you without lifting a finger. So, with a strategic approach, that $7,000 can set the stage for a delightful passive-income journey! Here are some stocks to consider.

Dream Industrial

Dream Industrial REIT (TSX:DIR.UN) is shaping up to be a strong option for investors looking for solid returns. With a market cap of around $4.16 billion and a forward annual dividend yield of 4.87% at writing, DIR.UN offers an appealing balance between income and growth potential. The company has a solid track record with a profit margin of 37% and an impressive operating margin of 71.21%. This suggests effective cost management and a robust business model. Plus, it recently reported revenue of approximately $480.64 million, thereby indicating its ability to generate consistent income, making it a reliable choice for dividend-seeking investors.

Moreover, DIR.UN’s focus on industrial properties positions it well to benefit from the growing demand for logistics and warehousing, especially in today’s e-commerce-driven market. Its strategic acquisitions and property management initiatives help maintain a strong occupancy rate. This further supports stable cash flows. With a current ratio of 0.40 and total cash per share of $0.37, the real estate investment trust (REIT) demonstrates prudent financial management, thus ensuring it can meet short-term obligations while still providing attractive returns to shareholders. As such, investing in DIR.UN could be a savvy move for those looking to enhance their portfolio with a blend of steady income and growth potential!

Allied Properties

Allied Properties REIT (TSX:AP.UN) is shaping up to be a strong contender for investors looking for reliable income and growth in the real estate sector. With a forward annual dividend yield of 9.48% at writing, it offers an attractive income stream for those seeking to enhance their portfolios. Despite recent challenges, including a profit margin that reflects some volatility down 89.93%, the REIT has an impressive operating margin of 46.83%. Thus showcasing its operational efficiency. The company’s revenue for the trailing 12 months stands at approximately $582.68 million. And with a year-over-year growth of 7.30%, suggesting that it is effectively navigating the market.

Moreover, AP.UN’s strategic focus on high-quality properties and its ability to maintain a significant share of institutional holdings demonstrates strong investor confidence. With a manageable payout ratio of 398.95%, the REIT is poised to maintain its dividends even in fluctuating market conditions. The current market cap of approximately $2.65 billion indicates that it has a robust foundation for future growth. Especially as it capitalizes on evolving trends in the real estate market.

Diversified Royalty

Diversified Royalty (TSX:DIV) is an appealing option for investors seeking solid dividend income and potential growth. With a forward annual yield of 8.62% at writing, this stock offers an enticing income stream that can be especially attractive for those looking to boost their passive income. The company has demonstrated strong profitability, boasting a profit margin of 51.17% and an impressive operating margin of 89.42%. This speaks to its operational efficiency. Plus, DIV’s quarterly revenue growth of 18.60% indicates that it’s effectively expanding its revenue base, thereby making it a compelling choice for long-term investors.

Moreover, the financial stability of DIV is highlighted by its robust cash flow management, with operating cash flow standing at $39.88 million. With a safe payout ratio of 89.69%, the company maintains a strong current ratio of 5.73, suggesting it can easily cover its short-term liabilities. This balance between income potential and operational strength makes DIV a solid investment choice for those looking to build wealth through dividends — all while enjoying exposure to a diverse portfolio of revenue-generating assets.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Dream Industrial Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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