TFSA: Get Over $500 Each Month With These 3 Dividend Payers

Discover how to earn over $500 each month with these three dividend-paying stocks in your Tax-Free Savings Account (TFSA). Take advantage of this investment strategy to maximize your passive income and secure your financial future.

Introduction

Investing in dividend-paying stocks can be a smart strategy to generate a consistent stream of passive income. By leveraging the power of your Tax-Free Savings Account (TFSA), you can earn over $500 each month with three reliable dividend payers. In this article, we will explore the top dividend-paying stocks that can help you achieve this financial goal. With the potential to earn significant returns, these stocks offer a great opportunity for long-term investors seeking to grow their TFSA portfolio.

TFSA: Get Over $500 Each Month With These 3 Dividend Payers

If you’re looking to make the most out of your TFSA, these three dividend-paying stocks can help you generate a monthly income of over $500. Let’s dive into the details of each stock and understand why they are excellent choices for your investment portfolio.

The cumulative TFSA contribution room for a Canadian who was 18 years and above in 2009 would be $88,000. Meanwhile, if you invest the stated amount equally among the following three monthly paying dividend stocks, you can earn $591/month through dividends.

COMPANY	RECENT PRICE	NUMBER OF SHARES	DIVIDEND	TOTAL PAYOUT	FREQUENCY
NWH	7.87	3727	0.067	249	Monthly
RNW	12.7	2309	0.078	180	Monthly
EXE	7.24	4051	0.040	162	Monthly

1. Northwest Healthcare Properties REIT

Northwest Healthcare Properties REIT focuses on acquiring, developing, and managing healthcare real estate assets across various international markets. The company’s portfolio includes properties such as hospitals, clinics, medical office buildings, and specialized healthcare facilities. They have a strong presence in Canada, Brazil, Germany, Australia, and New Zealand, among other countries.

Performance in the Past Few Years: Over the past few years, Northwest Healthcare Properties REIT has demonstrated a solid performance and has delivered consistent returns to its investors. Here is a high-level overview of the company’s performance:

1. Revenue Growth: Northwest Healthcare Properties REIT has experienced steady revenue growth, driven by both organic growth and strategic acquisitions. The company’s diversified portfolio and focus on healthcare real estate have contributed to its ability to generate reliable rental income.
2. Occupancy Rates: The company has maintained high occupancy rates across its properties, indicating strong demand for healthcare real estate. This stability in occupancy rates is a positive sign for investors, as it ensures a consistent stream of rental income.
3. Dividend Payments: Northwest Healthcare Properties REIT is known for its attractive dividend yield. The company has a track record of regularly distributing dividends to its shareholders, making it an appealing investment option for income-oriented investors.
4. Expansion and Acquisitions: Northwest Healthcare Properties REIT has pursued strategic acquisitions to expand its portfolio and geographic reach. By investing in healthcare properties in various countries, the company has diversified its income streams and reduced risk.
5. Financial Stability: The REIT has maintained a strong balance sheet and financial stability. This has allowed them to access capital markets for funding acquisitions and development projects, further supporting their growth strategy.
6. Sustainable Business Model: The healthcare sector has proven to be resilient, and Northwest Healthcare Properties REIT’s focus on healthcare real estate provides stability and long-term growth potential. The demand for healthcare services continues to rise globally, making the company well-positioned for future success.

Verdict: Northwest Healthcare Properties REIT has demonstrated a strong performance in the past few years, driven by its diversified portfolio, solid revenue growth, high occupancy rates, and strategic acquisitions. The company’s focus on healthcare real estate and its international presence position it well for continued success. Investors seeking exposure to the healthcare sector and stable income through dividends may find Northwest Healthcare Properties REIT an attractive investment opportunity.

It has identified $330 million worth of non-core assets, which it plans to sell by the end of the third quarter. It is working on lowering its stake in the United States and United Kingdom joint ventures. These initiatives together can generate $550-$600 million of net proceeds, which the company plans to utilize to pay off high-interest-bearing loans.

Further, with the availability of $4.6 billion fee-bearing capital, NorthWest Healthcare plans to progress with its new investment opportunities while remaining disciplined. Amid all these initiatives, the company’s management expects its AFFO to grow by 20% this year, thus making its future dividend payouts safer. The company currently pays a monthly dividend of $0.06667/share, with its forward yield at an impressive 10.17%.

2. TransAlta Renewables

With a dividend yield of 7.4%, TransAlta Renewables (TSX:RNW) is my second pick. TransAlta Renewables focuses on the development, acquisition, and operation of renewable power generation facilities across North America. The company’s portfolio includes a wide range of renewable energy assets, including wind farms, hydroelectric facilities, and solar parks. By harnessing the power of natural resources, TransAlta Renewables contributes to reducing greenhouse gas emissions and promoting a greener energy future.

Performance in the Past Few Years: Over the past few years, TransAlta Renewables has demonstrated strong performance and has shown significant growth in the renewable energy sector. Here is a high-level overview of the company’s performance:

1. Capacity Expansion: TransAlta Renewables has actively pursued capacity expansion through the development of new projects and acquisitions. The company has successfully added new renewable power generation facilities to its portfolio, increasing its overall capacity and diversifying its energy sources.
2. Revenue Growth: The company has experienced consistent revenue growth driven by the increasing demand for renewable energy and the expansion of its portfolio. As more organizations and governments prioritize clean energy solutions, TransAlta Renewables has positioned itself as a key player in meeting this demand.
3. Stable Cash Flows: TransAlta Renewables benefits from long-term power purchase agreements (PPAs) that provide stable cash flows. These agreements often span several years and ensure a predictable revenue stream, reducing the company’s exposure to fluctuations in energy prices.
4. Geographic Reach: The company has a broad geographic reach, with renewable energy assets located across Canada, the United States, and Australia. This diversification allows TransAlta Renewables to leverage the strengths and opportunities offered by different markets and regulatory environments.
5. Commitment to Sustainability: TransAlta Renewables is committed to sustainability and reducing its environmental impact. By investing in renewable energy, the company contributes to the transition to a low-carbon economy, aligning with global efforts to combat climate change.
6. Dividend Growth: TransAlta Renewables has a history of increasing dividends, reflecting its financial strength and confidence in its future prospects. The company’s ability to generate steady cash flows from its renewable energy assets allows it to provide attractive dividends to its shareholders.

Verdict: TransAlta Renewables has shown strong performance in the past few years, driven by its capacity expansion, revenue growth, stable cash flows, and commitment to sustainability. The company’s diverse portfolio of renewable energy assets and its geographic reach position it well to capitalize on the growing demand for clean energy solutions. With a track record of dividend growth and a focus on long-term sustainability, TransAlta Renewables presents an attractive investment opportunity for those seeking exposure to the renewable energy sector and a greener future.

3. Extendicare

With the rising aging population, the demand for care and services to grow in the coming years. So, I have selected Extendicare (TSX:EXE) as my final pick. Extendicare is dedicated to meeting the evolving needs of seniors by offering a range of healthcare services, including skilled nursing, rehabilitation, memory care, and home health care. The company aims to enhance the quality of life for seniors and provide them with a safe and supportive environment.

Performance in the Past Few Years: Over the past few years, Extendicare has demonstrated a strong performance in the senior care industry. Here is a high-level overview of the company’s performance:

1. Strategic Growth: Extendicare has pursued strategic growth initiatives, including acquisitions and expansions, to expand its presence and meet the increasing demand for senior care services. The company has focused on enhancing its service offerings and geographic reach, positioning itself as a leader in the industry.
2. Revenue Growth: Extendicare has experienced consistent revenue growth as a result of its expanding operations and the growing demand for its services. The company’s commitment to providing high-quality care has attracted residents and their families, contributing to its financial success.
3. Focus on Quality Care: Extendicare places a strong emphasis on providing quality care to its residents. The company invests in staff training, facility improvements, and innovative programs to ensure that residents receive personalized care tailored to their specific needs. This focus on quality care has earned Extendicare a positive reputation in the industry.
4. Occupancy Rates: Extendicare has maintained stable occupancy rates across its facilities. This indicates a strong demand for its services and reflects the trust that residents and their families place in the company’s ability to deliver exceptional care.
5. Adapting to Changing Needs: Extendicare has demonstrated its ability to adapt to changing industry trends and evolving needs of seniors. The company has implemented innovative programs and services to address the unique challenges faced by seniors, such as memory care for individuals with dementia or Alzheimer’s disease.
6. Commitment to Compliance: Extendicare is committed to upholding regulatory standards and ensuring compliance with healthcare regulations. The company prioritizes resident safety, privacy, and dignity, aligning with industry best practices and regulatory requirements.

Verdict: Extendicare has shown a strong performance in the past few years, driven by its strategic growth initiatives, revenue growth, focus on quality care, and ability to adapt to changing needs. As a leading provider of senior care services, Extendicare has built a reputation for delivering exceptional care and enhancing the quality of life for seniors. With its commitment to resident well-being and its ability to meet the growing demand for senior care, Extendicare is well-positioned for continued success in the industry.

The company offers care and services to senior citizens across Canada under various brands. Meanwhile, the company posted a solid first-quarter performance earlier this month, with its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) growing by 35% to $31 million.

FAQs:

Here are some frequently asked questions about TFSA and dividend-paying stocks:

1. Can I invest in dividend stocks within my TFSA?

Yes, you can invest in dividend-paying stocks within your TFSA. In fact, it can be a smart strategy to leverage the tax advantages of your TFSA while earning a steady stream of income from dividends.

2. How can I select dividend-paying stocks for my TFSA?

When choosing dividend stocks for your TFSA, it’s essential to consider factors such as the company’s track record of dividend payments, dividend growth, financial stability, and the sustainability of their business model. Conducting thorough research and seeking professional advice can help you make informed investment decisions.

3. Are dividends earned within a TFSA tax-free?

Yes, dividends earned within a TFSA are tax-free. This means that any income generated from your dividend stocks will not be subject to taxes, allowing you to keep more of your investment returns.

4. How much can I contribute to my TFSA each year?

The annual contribution limit for a TFSA is determined by the government and may vary from year to year. As of 2021, the contribution limit is $6,000 per year. However, it’s crucial to consult the latest guidelines to ensure compliance with the current rules.

5. Can I reinvest dividends earned within my TFSA?

Yes, you can reinvest dividends earned within your TFSA. By reinvesting your dividends, you can compound your returns and potentially accelerate the growth of your TFSA portfolio.

6. How can I monitor the performance of my TFSA investments?

You can monitor the performance of your TFSA investments through regular portfolio reviews and tracking the financial performance of the companies you have invested in. Online brokerage platforms and financial news sources can provide valuable tools and information to help you stay informed.

Conclusion

By investing in dividend-paying stocks within your TFSA, you can unlock the potential to earn over $500 each month in passive income. Stocks like Northwest Healthcare Properties REIT, TransAlta Renewables, and Extendicare offer reliable dividends and the opportunity for long-term growth. Remember to do thorough research and consider your investment goals before making any investment decisions. With careful planning and strategic allocation of your TFSA funds, you can build a portfolio that generates consistent income while enjoying the benefits of tax-free growth.