© Reuters. TFSA users: let 2 basic consumption actions earn money while you sleep
Money is best spent on essentials or basic necessities during times of inflation. From an investment perspective, people should also exercise discretion, as some sectors perform better than others if inflation is high.
For example, Rogers Sugar (:RSI) and North West Company (TSX:TSX:) show stable performance in 2022. The respective companies thrive amid rising prices because people need their products and services. Tax-Free Savings Account (TFSA) users, in particular, can use their available contribution room to purchase this pair of high-yielding consumer staples stocks.
Strong Demand Mike Walton, President and CEO of Rogers Sugar and Lantic Inc., said, “Refined sugar demand was very strong in the second quarter of 2022, following the volatility and unforeseen events that have had a negative impact on our sales volume in the first quarter. Despite the 20.49% drop in net profit compared to Q2 2021, management maintains a positive outlook for 2022.
However, year-to-date (first half of the year), revenue and net profit increased by 10.08% and 5.07% compared to the same period in 2021. While the volume total sugar increased by 0.65%, the volume of maple products fell by 13%. . Nonetheless, management expects improved financial performance this year compared to 2021.
Walton said, “Increasing sales volume, coupled with improved margins and good production from our Taber beet sugar plant contribute to our positive outlook for our sugar segment in 2022.” He added that this will more than offset the challenges in the maple segment due to inflationary cost pressures.
For fiscal 2022, Rogers expects to spend between $25 million and $30 million on various capital projects. According to management, approximately 25% will go to return on investment projects. Meanwhile, the maple segment is expected to come under pressure due to inflationary pressures on packaging materials, transportation and labor costs.
As of this writing, Rogers Sugar is trading at $6.23 per share (+6.13% year-to-date). If you invest today, this $658.53 million sugar and maple products producer pays a fantastic dividend of 5.78%.
Conquered Markets North West Company prides itself on conquering markets in remote and hard-to-reach communities in Canada, in rural Alaska, the South Pacific and the Caribbean. This $1.7 billion retailer delivers food and everyday products to its customers. Its related businesses include financial services, general merchandise, telepharmacy services and air transportation services.
In fiscal 2021 (12 months ended January 31, 2022), total sales fell 5% from fiscal 2020. However, net income increased 9.68% year-over-year. the other to reach $157.45 million. NWC President and CEO Dan McConnell said the 2021 results were rooted in a pandemic response focused on health and safety, supply and distribution of essential items.
McConnell added: “As we enter 2022, we face continued uncertainties related to COVID-19, global supply chain constraints, inflationary pressures and declining consumer income support in our markets. .” While management expects earnings to decline in 2022 compared to 2021, the level is expected to be significantly higher than in 2019 or before the pandemic.
At $33.95 per share, current NWC investors enjoy a 6% year-to-date gain on top of the 4.12% dividend. The 354-year-old company’s payout ratio is less than 50%.
Generating tax-free passive income Rogers Sugar and NWC pay an average dividend of 4.95%. Assuming you also allocate your annual $6,000 TFSA limit, you can generate $297 in tax-free passive income.
The post TFSA Users: Let 2 Consumer Staples Earn Money While You Sleep appeared first on The Motley Fool Canada.
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends THE NORTH WEST COMPANY INC.
This article first appeared on The Motley Fool