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Investors hunting for passive income within their Tax-Free Savings Account (TFSA) may discover enticing opportunities in select TSX dividend stocks currently trading at discounted prices, offering high yields.
TC Energy (TSX:TRP) stands out as one such option, boasting a dividend yield of 7%. Despite a rebound from its 12-month low, the stock remains notably below its peak in June 2022. The decline was primarily fueled by rising interest rates, which increased borrowing costs for TC Energy as it funded its growth initiatives through debt.
Another attractive prospect is Telus (TSX:T), providing a dividend yield of 6.9%. While the stock has faced a downturn from its 2022 peak, concerns about higher interest rates and revenue issues in its Telus International subsidiary contributed to the decline. However, Telus responded by adjusting its expense base, including significant staff reductions in 2023, aimed at supporting operational earnings moving forward.
Despite lingering investor apprehensions regarding government regulations targeting large communication companies, Telus remains a robust business with reliable cash flow generated from essential mobile and internet services. Furthermore, Telus's absence of a media business helps alleviate some challenges encountered by its peers. The stock's current oversold status, coupled with Telus's track record of dividend growth, renders it an appealing choice for income-oriented investors.
In summary, TC Energy and Telus present compelling opportunities for investors seeking passive income within their TFSA. With their attractive dividend yields and potential for dividend growth, these stocks warrant consideration for inclusion in income-focused portfolios.
