Back in the spring, I’d discussed strategies for investing in a Tax-Free Savings Account (TFSA). One strategy that investors may want to consider in this increasingly volatile market involves stacking income-generating equities. Today, I want to look at three dividend stocks priced under $20 that are worth stashing in your TFSA. Let’s jump in.
TFSA investors: Here’s a green energy stock to snag today
Algonquin Power & Utilities (TSX:AQN) (NYSE:AQN) is an Oakville-based company that owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets in North America and the Caribbean. The green energy sector is well worth targeting for TFSA investors with their eyes on the future . Shares of this dividend stock have dropped 11% in 2021 as of close on October 6.
The company released its second-quarter 2021 results on August 12. Algonquin delivered revenue growth of 54% to $527 million. Meanwhile, adjusted EBITDA increased 39% to $244 million. Adjusted net earnings were reported at $91.7 million or $0.15 per share — up 93% and 67%, respectively. Algonquin’s growth strategy is pushing forward with some solid success. TFSA investors should consider snatching up this dividend stock on the dip.
Shares of Algonquin Power possess a favourable price-to-earnings (P/E) ratio of 13. It last paid out a quarterly dividend of $0.171 per share. That represents a solid 4.6% yield.
This dividend stock is under $20 and packs a big punch
TFSA investors can generate great income by targeting real estate investment trusts (REITs). Choice Properties REIT (TSX:CHP.UN) is a Toronto-based REIT that owns a massive portfolio of over 720 properties. Shares of this dividend stock have climbed 12% in the year-to-date period. The stock has dropped 4.6% month over month.
Investors can expect to see this REIT’s third-quarter 2021 earnings on November 3. In Q2 2021, Choice Properties delivered net income of $84.6 million — up from a net loss of $95.8 million in the prior year. The REIT benefited from a $511 million increase in the fair value of investment properties. Indeed, the Canadian real estate market has delivered stunning growth in the year-over-year period. However, this growth rate is expected to slow going forward.
This dividend stock last had a P/E ratio of 43, putting it in solid value territory relative to its industry peers. It offers a monthly dividend of $0.062 per share, which represents a strong 5.1% yield.
One more green energy dividend stock to add to your TFSA
TransAlta Renewables (TSX:RNW) is the third dividend stock I’d recommend for TFSA investors in early October. This Calgary-based company develops, owns, and operates renewable power generation facilities. Shares of TransAlta have dropped 15% in the year-to-date period. The stock is up 8.5% from the same period in 2020.
In Q2 2021, the company reported revenues of $218 million for the first six months of the fiscal year. This was up marginally from the previous year. Net earnings attributable to common shareholders was reported at $77 million — up from $33 million in the first six months of 2020.
Share of this dividend stock possess a P/E ratio of 37, putting it in solid value territory in comparison to its industry competitors. TransAlta last paid out a monthly distribution of $0.078 per share. That represents a 4.9% yield. This is another green energy dividend stock that is perfect for a TFSA gunning for long-term appreciation.
The post 3 Under-$20 Dividend Stocks to Buy in Your TFSA appeared first on The Motley Fool Canada .
The Motley Fool has no position in any of the stocks mentioned. Fool contributor Ambrose O’Callaghan has no position in any stocks mentioned.
2021