It’s easy to see why dividend-growth stocks are so popular with retirees and folks who are getting close to that age.

Retirees like consistently rising dividends, since things like food, utilities, and property taxes have a tendency to keep creeping up each year. The ability to spend the ever-increasing dividends is not only a nice inflation hedge, but it also ensures retirees don’t have to worry about depleting their capital at the wrong time. If the market has been weak, a retiree who doesn’t touch the capital isn’t worried about anything.

As the old saying goes, the best time to plant a tree was 20 years ago. The second-best time is now. If you haven’t already built up a portfolio of fine dividend payers, now is a great time to start. Here are three terrific stocks to get you rolling.

National Bank of Canada 

Although its larger peers get most of the attention, National Bank of Canada (TSX:NA) has quietly been a terrific performer. In fact, over the past five years the stock has returned more than 10.4% annualized if you reinvest the dividends, which was only narrowly beaten out by one peer, TD Bank.

National Bank is easily the cheapest bank in Canada as well. The current P/E ratio is just 9.6 and the dividend yield is an eye-popping 4.9%. It isn’t very often investors can get a dividend from one of Canada’s largest banks that’s flirting with 5% along with a payout ratio under 50%, but National Bank delivers on both.

The company also has interesting growth potential. Its assets are primarily located in Quebec, where it’s one of the province’s top lenders. It also has a little exposure to Ontario and eastern Canada, but is almost unheard of out west with the exception of a few branches in big centres and a few wealth management offices. And if it doesn’t want to expand west, the company always has the potential to go south of the border. Either way, it has growth potential that doesn’t just consist of getting better mortgage volumes.

Jean Coutu Group

Keeping on the Quebec theme, the next dividend-growth superstar for your portfolio is the province’s largest pharmacy chain, Le Groupe Jean Coutu PJC Inc. (TSX:PJC.A).

In Canada, there are more than nine million baby boomers who are all on the verge of creating a huge new growth market in pharmaceuticals. As they continue to age, they’ll need more and more medical attention to stay healthy, which is very good news for the local pharmacist. Besides, the relationship between a pharmacist and a patient tends to be pretty sticky. Folks stay with the pharmacist that knows their medical history.

There’s also the potential for the company to get acquired. Back when Loblaw bought Shoppers Drug Mart, rumours were swirling that Jean Coutu would be the next company swallowed up, probably by Metro. An acquisition would likely come with a pretty hefty premium for existing shareholders.

Shares of the company currently yield 2.2%, and the company has nearly doubled the dividend over the past five years. With a payout ratio of just 38%, there’s plenty of room to keep raising dividends in the future.

Magna International

The thing that should interest dividend-growth investors about Magna International Inc. (TSX:MG) is the company’s tiny payout ratio.

Over the last 12 months, the company earned US$4.72 per share, as both strength in the U.S. dollar and robust auto sales helped boost bottom line earnings. Yet the company paid out just US$0.82 in dividends. That’s a payout ratio of just 17.4%.

Yes, the auto industry is cyclical; that’s one of the reasons why the stock trades at barely 10 times earnings. But Magna has the balance sheet strength to work its way out of many problems, and it is the manufacturer of choice for many of the world’s largest automakers. As long as cars are being made, I’m confident Magna parts will be inside of them.

And even if times get bad, the tiny payout ratio ensures earnings can take a big temporary hit and the company can still hike the payout. Currently, shares yield 1.8%.

Want more top dividend payers? Then check these out!

It isn't just the preceding three companies that can deliver great dividends for your portfolio.

These three top stocks have delivered dividends for shareholders for decades (and even centuries!). Check out our special FREE report: "3 Dividend Stocks to Buy and Hold Forever". Click here now to get the full story!


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Fool contributor Nelson Smith has no position in any stocks mentioned. Magna International Inc. is a recommendation of Stock Advisor Canada.