2 High-Yield Dividend Stocks to Buy for TFSA Passive Income

The market correction is giving seniors and other investors seeking passive income a chance to get high dividend yields from some top Canadian stocks. One popular strategy involves buying TSX dividend stocks inside a self-directed Tax-Free savings Account (TFSA).

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS) has a market capitalization of about $80 billion. This makes it the fourth-largest bank in Canada based on that metric. At the time of writing, Bank of Nova Scotia trades near $67.50 per share compared to $74 in February and $86 in June last year.

The stock hasn’t performed well in recent years, but contrarian investors might want to take advantage of the slump to pick up a great yield from a solid dividend stock. At the current price, BNS stock offers a yield of 6%.

The board hired a new chief executive officer (CEO) this year, and changes are already underway. The company announced a new boss for the international business, and management will go through a strategic analysis of the bank’s operations to see where a shift might be needed to boost investor returns.

Bank of Nova Scotia spent a good chunk of the past 30 years buying banks and credit card portfolios in Mexico, Peru, Chile, and Colombia. This might seem an odd strategy, but the four countries are members of the Pacific Alliance trade bloc that allows the free movement of goods, capital, and labour. They have a combined population of more than 230 million with much lower participation in banking services than in Canada or the United States. That presents a large growth opportunity, as the middle class expands, and demand increases for loans and investment products.

The political and economic risks, however, are always present in these emerging economies. So far, investors have not reaped the anticipated rewards. It will be interesting to see if the new CEO decides to keep a presence in all four countries. Based a recent statement to shareholders, Mexico remains a core interest.

Investors need to be patient, but Bank of Nova Scotia looks cheap today, trading at just 9.4 times trailing 12-month earnings.


Telus (TSX:T) provides essential mobile and internet services for commercial and residential clients across Canada. These are often bundled with TV or security subscriptions. Telus doesn’t operate a media group but has instead channeled investments into other subsidiaries that could deliver solid long-term gains for investors.

Telus Health is now a global provider of digital health solutions for doctors, hospitals, and insurance companies. It is also now works with companies that have employee health and pension benefits programs after the purchase last year of Lifeworks.

Telus Agriculture, another growing subsidiary, has expanded to include consumer products, as it strives to help the entire supply chain from farms to stores become more efficient.

Telus should be a good stock to own if you are concerned about a recession. The core revenue stream comes from essential services, and the company has the power to increase prices. Telus stock trades near $28.50 per share at the time of writing compared to more than $34 at the high last year. Investors who buy the dip can get a 4.9% yield and wait for dividend increases to boost the return.

Telus typically increases the dividend annually by 7-10%.

The bottom line on top stocks for passive income

Bank of Nova Scotia and Telus pay attractive dividends that should continue to grow. If you have some cash to put to work in a TFSA focused on passive income, these stocks appear cheap today and deserve to be on your radar.

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