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.