Deadline Coming: 3 TFSA Stocks to Buy Now Before Dividend Payouts

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Canadian Dividends Investors looking to maximize their passive income yield in tax-free savings accounts (TFSAs) May want to watch for the important dividend deadline of 2023 in February. The TSX’s most proven high-yield dividend-paying giants will pay their first quarter 2023 dividends in March to investors who appear on their registers on given dates in February.

TSX Dividend Stocks Enbridge Inc. (TSX: ENB), Fortis Inc. (TSX:FTS), and TransAlta is renewable (TSX:RNW) have a fast-approaching dividend deadline to observe in February. Here’s why you should load stocks into a TFSA before the key dates approach and book tax-free dividend income for the long haul.

Enbridge

Enbridge A $109.9 billion North American oil and gas pipeline behemoth, it is expanding into a promising renewable energy industry. Additionally, it is investing in a growing Canadian natural gas export market. Investors flock to Enbridge for its ever-growing, reliable and high-yielding regular quarterly dividends. ENB stock’s current dividend yields a juicy 6.5% annually and has been raised every year for 28 consecutive years.

To receive all of Enbridge’s dividends in 2023, investors must buy ENB shares before February 14. The company will pay its first quarter 2023 dividend of $0.8875 per share to shareholders of record on February 15. March 1, 2023. Investors who buy Enbridge stock before February 14 and hold it through 2023 can book a 6.5% return in the form of a dividend. Any increase in ENB shares could be a bonus.

If you had invested $10,000 of your TFSA contributions in Enbridge stock 10 years ago, and religiously reinvested all quarterly dividends received, your investment would have doubled to $20,170 today. Most of the profits come from dividends. Otherwise, the position would have grown to $12,230 due to capital gains alone.

Fortis

Fortis One of the most reliable and religiously growing quarterly dividends-paying regulated electric utility on the TSX. It has raised its dividend for 49 consecutive years. Given the success of its current $22.3 billion capital investment plan, the company has committed to a 4%-6% annual dividend increase each year through 2027.

Investors must buy FTS shares before February 14 to receive all of Fortis’ dividends for 2023. A first quarterly dividend of $0.565 per share will be paid on March 1, 2023 to stockholders of record on February 15.

Fortis’ current dividend should yield 4.1% per annum. The company has raised its dividend at an average annual rate of 5.6% over the past five years. The most recent 6% increase was announced in September 2022.

The company will likely follow through with a planned dividend increase in 2023 and beyond. Its investment program is largely funded from internally generated cash flows, which carries minimal risk. The business maintains an investment grade credit rating. It is noteworthy that its financial position remains the same despite the increase in interest rates.

If you had invested $10,000 of your TFSA contributions in Fortis shares 10 years ago, your investment would have grown to more than $22,900 today – with dividend reinvestment. Most of the gains could have been in dividends. Otherwise, the stock price appreciation alone could have boosted your capital to around $15,800 – still a nice return.

TransAlta is renewable

TransAlta Renewables is a green-energy powerhouse serving customers in Canada, the United States and Australia that is committed to paying its shareholders a consistent monthly dividend – even during turbulent times and its stock price tanks. .

The company pays dividends every month. The current monthly payout of $0.078 per share yields 7.7% annually. The dividend has been steady since its last hike in September 2017.

I consider TransAlta Renewables a speculative play. Investors interested in TransAlda’s ability to fend off growing competition and maintain its annual dividend at the current rate should buy shares by February 14 if they want to receive the February 2023 dividend. The company will pay the February dividend on February 28 to shareholders on February 15.

Note that the risk of a dividend cut at TransAlta Renewables has increased due to rising debt costs and impending contract expirations. Management expects to pay out 100% of distributable cash flow in 2023 as dividends, leaving nothing for capital investment!

Position Upcoming Deadline: 3 TFSA Shares to Buy Now Before Dividend Payments appeared first Motley Fool Canada.

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Further reading

• Passive Income: How to Earn $367 a Month in Your TFSA Portfolio
• Young Investors: 3 Best Dividend Stocks to Own in 2023
• 5 stocks to buy for $5000 a year in tax-free passive income
• 3 stocks I buy — but I’m waiting for a pullback
• 3 TSX Stocks You Can Always Own

Fool Contributor Brian Baratza has no positions in any of the stocks mentioned. The Motley Fool recommends Enbridge and Fortis. A motley fool Disclosure Policy.

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