Retirees: 2 High-Yield Stocks for a Self-Directed TFSA Income Fund
The Motley Fool
Published Dec 07, 2021 15:15
Updated Dec 07, 2021 15:45
Retirees: 2 High-Yield Stocks for a Self-Directed TFSA Income Fund
Canadian retirees are searching for top TSX stocks that offer high dividend yields and growing distributions.
Bank of Nova Scotia Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) recently reported strong fiscal Q4 2021 earnings and raised the dividend by 11%.
Canada’s third-largest bank by market capitalization generated adjusted net income of $2.72 billion in the quarter ended October 31 compared to $1.94 billion in the same period last year. Full-year fiscal adjusted net income hit $10.2 billion versus $6.96 billion in FY2020.
The strong rebound in the bank’s results indicates how well the Canadian government’s assistance plans worked over the past year. Businesses and homeowners were able to make loan and mortgage payments as a result of the aid during lockdowns and in recent months, as they reopened and went back to work.
Strong demand and high prices in the housing market also helped. Record levels in the stock market didn’t hurt either.
Overall, loan defaults and bankruptcies have been much lower than originally feared. This means Bank of Nova Scotia has excess capital to deploy. The dividend increase is part of the plan to return capital to shareholders. In addition, Bank of Nova Scotia intends to buy back stock and has indicated it could look to make strategic acquisitions in the United States to boost its wealth management business.
The stock moved higher after the solid earnings report, but still trades at a reasonable 11 times trailing 12-month earnings. Investors who buy Bank of Nova Scotia at the current share price near $84.70 can pick up a 4.7% dividend yield.
Enbridge Enbridge (TSX:TSX:ENB)(NYSE:ENB) is a giant in the North American energy infrastructure industry. The company moves 25% of the oil produced in Canada and the United States and 20% of the natural gas used by American homes and businesses.
The stock is off the 2021 highs as a result of the recent downturn in the broader energy sector. Low oil prices don’t really impact Enbridge; it is more affected by fuel demand, and that continues to rise, as the domestic and international economies rebound.
Enbridge transports oil from producers to refineries and storage facilities and charges a fee for the service. The recent US$3 billion acquisition of a key export terminal in Texas expands the asset base and will add to the revenue stream in 2022.
Enbridge is also investing in new renewable power facilities and expanding its existing natural gas infrastructure.
The company just announced a 3% dividend increase for 2022 supported by anticipated growth in distributable cash flow (DCF). The new quarterly payout of $0.86 provides an annualized yield of 7.1% at the current share price.
Even if the stock doesn’t move higher in the coming years, you still get a great return on the investment from an industry leader.
Get The App
The bottom line on top income stocks for a TFSA dividend fund Bank of Nova Scotia and Enbridge are top TSX dividend stocks that offer generous payouts and attractive yields. If you have some cash to put to work in a self-directed TFSA income portfolio, these stocks deserve to be on your radar today.
The post Retirees: 2 High-Yield Stocks for a Self-Directed TFSA Income Fund appeared first on The Motley Fool Canada.
The Motley Fool recommends BANK OF NOVA SCOTIA and Enbridge. Fool contributor Andrew Walker owns shares of Enbridge.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.