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11 minutes ago
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A $7,000 TFSA Strategy That Focuses on Dividend Growth
Written by Andrew Walker at The Motley Fool Canada Retirees and other dividend investors are searching for ways to get better returns on savings held inside a self-directed Tax-Free Savings Account (TFSA). One popular investing strategy involves buying good dividend-growth stocks that can provide income and boost long-term gains. The TFSA limit in 2025 is $7,000. All interest, dividends, and capital gains generated inside a TFSA on qualifying investments are tax-free. This means the full value of the earnings can go right into your pocket without having to share some with the CRA. The gains can also be fully reinvested, if passive income isn't the core goal. Retirees who receive Old Age Security (OAS) get another benefit. The CRA does not count TFSA income when calculating net world income used to determine the Old Age Security (OAS) pension recovery tax. This is important for seniors with high incomes. Every dollar of net world income earned above a minimum threshold triggers a $0.15 pension recovery tax. The number to watch in the 2025 tax year is $93,454. As such, retirees should consider fully using TFSA contribution space before holding income-generating investments inside taxable accounts. Younger investors can use dividend stocks to build retirement savings inside a TFSA. One strategy involves owning dividend-growth stocks and reinvesting the distributions in new shares. This sets off a powerful compounding process that can turn modest initial investments into meaningful savings over time, especially when dividends increase and the share price drifts higher. Fortis (TSX:FTS) is a good example of a stock with a great track record of dividend growth. The company has raised the payout in each of the past 51 years. Fortis operates utility businesses in Canada, the United States, and the Caribbean. The company has $75 billion in assets, including natural gas utilities, power generation facilities, and electric transmission networks. Nearly all of the revenue comes from rate-regulated businesses. This means cash flow is normally predictable and reliable. Fortis is working on a $26 billion capital program that will raise the rate base from $39 billion in 2024 to $53 billion in 2029. Revenue and earnings growth from the new assets should support planned annual dividend increases of 4% to 6% over the next five years. New projects are under consideration that could get added to the backlog. This would potentially extend the dividend-growth guidance or boost the size of the increases. Fortis has a dividend reinvestment plan that gives investors a 2% discount on stock purchased using dividend distributions. On the risk side, Fortis is sensitive to changes in interest rates due to the large amount of debt it uses to fund part of the capital program. The stock fell when the central banks in Canada and the United States raised rates in 2022. Rate cuts last year spurred the rebound. Analysts broadly expect interest rates to continue to decline later this year, as long as there isn't a spike in inflation caused by tariffs. Buying Fortis on pullbacks has historically proven to be a savvy move for patient investors. The TSX is home to many good dividend-growth stocks that investors can own to generate income and long-term total returns inside a self-directed TFSA. Fortis still deserves to be on your radar, even after the nice rally in the past year. The post A $7,000 TFSA Strategy That Focuses on Dividend Growth appeared first on The Motley Fool Canada. Before you buy stock in Fortis, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Fortis wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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25 minutes ago
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11.5% Yield! I'm Buying This Dividend Stock and Holding for Decades
Written by Amy Legate-Wolfe at The Motley Fool Canada In a market where many investors are chasing the next big tech stock, there's something comforting about a steady, reliable dividend payer. Allied Properties Real Estate Investment Trust (TSX: fits that bill, offering a substantial yield and a focus on Canada's urban workspaces. So let's dig into this analyst-loving dividend stock. Allied specializes in owning and operating distinctive urban office properties in major Canadian cities like Toronto, Montreal, and Vancouver. Its portfolio includes a mix of heritage and modern buildings, catering to knowledge-based organizations seeking creative and collaborative environments. This niche focus has allowed Allied to carve out a unique position in the Canadian real estate landscape. As of the end of the first quarter of 2025, Allied's portfolio comprised 171 income-producing properties, encompassing approximately 15.8 million square feet of gross leasable area. The REIT reported a leased area of 86.9% and an occupied area of 85.9%, reflecting stable demand for its urban workspace offerings. The average in-place net rent per occupied square foot stood at $25.30, up 5% from the same period in the previous year. Financially, Allied reported rental revenue of $150.6 million for Q1 2025, a 4.9% increase compared to Q1 2024. However, the dividend stock also recorded a net loss and comprehensive loss of $107.7 million for the quarter, primarily due to a fair value loss on investment properties and investment properties held for sale amounting to $164.1 million. Despite the net loss, Allied's funds from operations (FFO) for the quarter were $71.1 million, translating to $0.509 per unit on a diluted basis. Adjusted funds from operations (AFFO) stood at $64.8 million, or $0.464 per unit. The AFFO payout ratio was 97%, indicating that the REIT is distributing nearly all of its adjusted funds from operations to unit holders. Allied has been proactive in managing its portfolio and balance sheet. In 2024, the REIT acquired three triple-A urban properties: 400 West Georgia in Vancouver, 19 Duncan in Toronto, and Calgary House in Calgary. To fund these acquisitions and maintain a healthy balance sheet, Allied sold seven non-core properties for $229 million in 2024 and plans to sell additional non-core properties for at least $300 million in 2025. The REIT also completed $850 million in replacement debt financing in Q1 2025, including a $450 million green bond offering and a $400 million dual-tranche offering of debentures. These financings were used to refinance all debt maturing in 2025, except for construction financing on a Vancouver property. As a result, Allied's total debt ratio stood at 42.9%, and net debt as a multiple of annualized adjusted EBITDA was 11.6 times at the end of Q1 2025. Looking ahead, Allied aims to increase its occupied and leased area to at least 90% by the end of 2025. The REIT also expects to achieve growth in same asset net operating income (NOI) of approximately 2% for the year. However, management anticipates a contraction in FFO and AFFO per unit by approximately 4% in 2025, primarily due to higher overall interest costs stemming from the 2024 acquisitions. Yet even during this period, investors can still look forward to a whopping 11.5% dividend yield. In fact, here is what a $10,000 investment would look like on the TSX today. COMPANY RECENT PRICE NUMBER OF SHARES DIVIDEND TOTAL PAYOUT FREQUENCY INVESTMENT TOTAL $15.50 645 $1.80 $1,161.00 Monthly $9,997.50 That adds up to $96.75 dished out monthly! Therefore, Allied Properties REIT offers a compelling investment opportunity for those looking to add a high-yielding, urban-focused real estate asset to their portfolio. With a current yield of approximately 11.5% and a strategic focus on Canada's major cities, Allied presents a blend of income and growth potential that could appeal to long-term investors. The post 11.5% Yield! I'm Buying This Dividend Stock and Holding for Decades appeared first on The Motley Fool Canada. Before you buy stock in Allied Properties Real Estate Investment Trust, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Allied Properties Real Estate Investment Trust wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025
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an hour ago
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Why Putting $7,000 in These Renewable Energy Stocks Makes Sense Now
Written by Jitendra Parashar at The Motley Fool Canada Whether you're looking to put your annual Tax-Free Savings Account (TFSA) contribution of $7,000 to good use or simply seeking a timely investment opportunity, renewable energy stocks could be worth considering in 2025. While the renewable energy sector enjoyed its time in the spotlight a few years back, things have since cooled down a bit. But that's exactly when Foolish Investors should start paying attention. What looked too expensive a few years ago is now trading at levels that could offer long-term value, especially if you believe the world isn't turning away from clean power anytime soon. In this article, I'll highlight two top dividend-paying renewable energy stocks and tell you why buying them right now could be a smart move for patient investors. The first renewable energy stock you may want to consider right now is Brookfield Renewable Partners (TSX: The company runs one of the world's largest publicly traded renewable power platforms, including hydro, wind, solar, and storage facilities spread across several continents. The stock is currently trading at $32.56 per share with a market cap of $9.3 billion and offers quarterly dividends with a generous 6.3% annualized dividend yield. Brookfield Renewable stock has had a rough year, dropping about 15% over the past 12 months. But here's why that might actually work in your favour. The company posted a record quarter (three months ended in March 2025) with US$315 million in funds from operations, up 7% from a year ago. Its development pipeline has also grown stronger as it added 800 megawatts of new capacity in the recent quarter, with more expected later this year. Also, Brookfield Renewable has been busy acquiring growth platforms like Neoen and National Grid Renewables, expanding its clean energy footprint in key geographic markets. With 90% of its portfolio under long-term contracts and about 70% of revenues linked to inflation, its setup is ideal for patient investors who want reliable dividends with long-term upside. Another top renewable energy stock worth looking at is Northland Power (TSX:NPI). This Toronto-based firm generates electricity through a mix of offshore and onshore wind, natural gas, and battery storage projects. NPI stock is currently trading at $20.77 per share with a market cap of $5.4 billion and an annualized dividend yield of 5.8%, paid out monthly. While the stock is still down nearly 15% over the past year, it has made a solid comeback recently with gains of over 13% in the last month alone. Northland just achieved a big milestone by bringing Canada's largest battery project, the 250-megawatt Oneida facility, into commercial operation. And more importantly, it did so ahead of schedule and under budget. That kind of project execution adds to its credibility. Meanwhile, construction is also progressing steadily at its Hai Long and Baltic Power offshore wind farms, which are expected to start generating revenue over the next couple of years. With more than 10 gigawatts of potential capacity in development and growing global demand for clean energy, long-term investors may find this renewable power stock attractive. The post Why Putting $7,000 in These Renewable Energy Stocks Makes Sense Now appeared first on The Motley Fool Canada. Before you buy stock in Brookfield Renewable Partners, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Brookfield Renewable Partners wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy. 2025
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an hour ago
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Is TD Bank Stock a Good Buy in June 2025?
Written by Adam Othman at The Motley Fool Canada Canadian bank stocks have been off to an impressive start despite all the fears that trade tension-induced panic due to tariffs might bring the Canadian economy into recession. Right now, there's a pause on tariffs, and the recession feared to be inevitable has yet to come around. As we move closer to the halfway mark of 2025, the S&P/TSX Composite Index only seems to be climbing to new all-time highs. Positive movement in the Canadian benchmark index reflects a broader picture of the Canadian stock market and, in turn, the economic situation. With the index reaching newer heights, it seems that the so-called top Canadian bank stocks have become quite the leaders, driving the market upward. In light of this development, we will take a closer look at one of the biggest bank stocks to determine whether it might be a good investment at current levels. Toronto-Dominion Bank (TSX:TD) has been quite a comeback story over the last few years. The reason I want to focus on TD Bank stock is its remarkable performance despite all the trouble it faced with American regulators. The $164 billion market-cap stock faced regulatory action in the US due to the bank's money-laundering fiasco last year. The restrictions and penalties imposed on it had a negative impact on the bank's performance in the stock market, but it is making remediations. The financial institution has new managers aboard, and it has revisited its growth plan. These factors are major contributors to the stock's performance in the last few weeks. The bank has paid all the fines it was supposed to, and it will settle with the asset cap on US-based assets. The bank is also selling off some of its non-core assets to improve its liquidity position. Greater liquidity can mean more spending money for the bank to make big moves. However, it remains to be seen what the new CEO of the bank will consider doing with the newly refreshed war chest. The bank is playing the long game in the US market, but its US-market-based growth will face significant restrictions for a few years to come. TD Bank's operations in the US market might be slower now, but that doesn't mean there is no growth potential in the domestic side of things. The extra money that the bank amasses from the sale of non-core assets can be valuable for any planned acquisitions or other growth-focused decisions the bank makes. As of this writing, TD Bank stock trades for $95.22 per share and distributes $1.05 per dividend per share each quarter to its investors, translating to an annualized 4.4% dividend yield. Suppose you're looking for a reliable dividend stock that is fundamentally strong and supports regular dividends. In that case, TD Bank might be an excellent pick to consider for your self-directed investment portfolio. The post Is TD Bank Stock a Good Buy in June 2025? appeared first on The Motley Fool Canada. Before you buy stock in TD Bank, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and TD Bank wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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2 hours ago
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Metro Inc.: Buy, Sell, or Hold?
Written by Joey Frenette at The Motley Fool Canada Shares of Montreal-based grocery firm Metro (TSX:MRU) have been faring quite well in the past year, now up a solid 17% year to date and close to 40% in the past year. Undoubtedly, the 'boring' grocery play has been anything but amid its robust rally. And while the stock may be starting to get just a bit pricey, at least compared to its historical valuation metrics, I think the quality defensive is well worth the slightly higher price of admission at just north of $105 per share. Undoubtedly, Metro, which primarily operates in the provinces of Quebec and Ontario, isn't the only grocery stock that has been firing on all cylinders of late. Indeed, the broad basket of grocery names has been on the ascent in recent years, seemingly undeterred by the threat of heftier food inflation and the impact of tariffs. Although you could do quite well by owning any one of the grocery plays or the broad basket, I think that shares of MRU stand out for their incredibly low beta, which is currently at 0.3. Indeed, for those seeking a less volatile ride for the second half, MRU stock seems to be a name to pick up while it yields a relatively attractive (and growing) 1.4% dividend yield. At the time of writing, shares trade at 23.75 times trailing price to earnings (P/E), which is not cheap for Metro standards. However, if you're in the market for a steady consumer staple that can move higher under its own power (the lower beta entails Metro is less likely to follow in the footsteps of the TSX Index), I'd not be against buying the stock at above $100 per share. Arguably, Metro still has the growth drivers in place to make higher highs going into year's end. Recently, Metro's top boss and CEO noted that the weakness in the Canadian dollar has been adding fuel to inflation. As the loonie gains a bit of ground again as the U.S. dollar looks to sink further (some pundits see the greenback falling by a high single-digit percentage point from here), I think Canadian consumers could be in for a bit of modest relief. And if Trump's tariffs go away in the back half of the year, either due to a friendly deal or perhaps some sort of blockage by the U.S. court, perhaps food inflation could have the chance to really cool off for a change. Either way, Metro's managers are doing a fantastic job of navigating the tariff environment. They've done their best to source more local products to help customers get a better deal for their dollar. And though there's no eating all of the tariff impact on imported goods, I think that the firm is better equipped than most other retailers to continue higher, regardless of what's in store on the trade front for the next 18 months. Most definitely not. But if you're a cautious investor looking for a resilient defensive dividend grower, I'd not sleep on the name. It's a buy, in my books. The post Metro Inc.: Buy, Sell, or Hold? appeared first on The Motley Fool Canada. Before you buy stock in Metro, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Metro wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
