Volatility has returned to the Canadian market, and investors who need reliable dividend income are wondering where they can get decent yield without taking on too much risk.

Here are the reasons why I think RioCan Real Estate Investment Trust (TSX:REI.UN) and BCE Inc. (TSX:BCE)(NYSE:BCE) are solid choices right now.


RioCan’s shares have pulled back this year and the sell-off looks overdone.

REIT names have taken a hit as the Canadian economy faces some economic headwinds and potential interest rate increases south of the border spark concerns about future borrowing costs.

RioCan owns 293 retail locations in Canada and another 47 in the United States. Most of its anchor tenants on the Canadian side are big companies with strong brands that sell the goods consumers need regardless of the state of the economy, including groceries, drugs, and everyday household items.

If Canadians begin to cut back on restaurant meals, they might actually spend more in the stores of RioCan’s top clients.

RioCan is considering the sale of its U.S. properties. A deal would lock in some nice gains and free up cash for higher distributions, debt payments, or investments in new opportunities.

The company has recently launched a pilot project that will add condo developments to some of its prime sites. If that turns out to be successful, investors could see a new cash flow stream hit their pockets in the coming years.

The concerns about interest rates are valid, but increases are likely to be small and drawn out, so RioCan should be able to adjust without seeing much of an impact.

RioCan pays a monthly distribution of 11.75 cents per share that offers a nice yield of 5.7%.


BCE Inc. is a telecom and media powerhouse with little serious competition and a revenue stream that spews free cash flow.

Canadian consumers might not like the high costs of mobile, Internet, or TV subscriptions, but it costs a lot of money to build a state-of-the-art network to serve a relatively small consumer base spread out across such a vast territory.

BCE plans to spend up to $20 billion in the next five years on infrastructure as it continues to upgrade services and pushes ahead with its the popular fibre-to-the-home offering.

The company generated $921 million in free cash flow in Q3 2015 and only paid out $551 million in dividends, so there is ample room for distribution growth going forward.

BCE pays a quarterly dividend of $0.65 per share that yields a reliable 4.5%.

The #1 dividend stock you want to own for the rest of 2015?

Our analysts have identified this oversold Dividend-Growth Stock as a top pick, and you can download the name, ticker symbol, and price guidance absolutely FREE.

Simply click here to receive your Special FREE Report, "1 Top Dividend Stock to Buy Today."

NEW! This Stock Could Be Like Buying Amazon In 1997

For only the 5th time in over 14 years, Motley Fool co-founder David Gardner just issued a Buy Recommendation on this recent Canadian IPO.

Stock Advisor Canada’s Chief Investment Adviser, Iain Butler, also recommended this company back in March – and it’s already up a whopping 57%!

Enter your email address below to claim your copy of this brand new report, “Breakthrough IPO Receives Rare Endorsement.”

Fool contributor Andrew Walker has no position in any stocks mentioned.