MENU

First Brexit… then Trump… Now, it’s time for Pro

Is your portfolio really prepared for what’s coming next?

To help investors like you navigate this historically uncertain — yet high-flying — market and prepare for an inevitable downturn, we’re re-opening our Motley Fool Pro Canada service to a select few new members for a short time.

To discover how Pro Canada could help you to increase your upside potential… reduce your downside risk… and earn paycheque-like income in the process, simply click here — before the small number of spots we have left are all gone!

2 Income Stocks to Help Retirees Pay the Bills

Being a pensioner is tough these days.

The CPP and OAS cheques are supposed to keep pace with inflation, but somehow the monthly bills seem to creep up faster than the increases in the retirement payments.

That’s why many seniors are turning to income stocks to help make up the difference.

This wasn’t always the case, but savings accounts, GICs, and Canada Savings Bonds no longer pay enough interest to meet the return needs. Stocks definitely carry more risk, but there really isn’t any other game in town right now.

So, which names should income investors pick?

There are a lot of stocks out there with big yields, but many of them carry significant risk, and a cut in the distribution is the last thing retirees want to see. Yes, yield is important, but investors should buy companies with solid revenue streams and safe payouts.

With this thought in mind, I think BCE Inc. (TSX:BCE)(NYSE:BCE) and RioCan Real Estate Investment Trust (TSX:REI.UN) are good picks.

BCE

BCE has been a favourite choice among pensioners for decades, and that trend should continue.

The company has changed a lot in recent years with the addition of retail, sports, and media assets that now complement the wireless and wireline infrastructure. Initially, analysts worried the divergence would be a mistake, but the new assets help solidify BCE’s dominant position in the rapidly changing Canadian market.

In fact, the company is so well integrated along the value chain that most Canadians put a bit of money into the pockets of BCE’s shareholders every week.

If you buy a digital device, listen to the radio, send a text message, read your e-mail, download a movie, watch the news, or catch a Leaf’s game, odds are you just helped pay BCE’s generous dividend.

BCE is investing heavily to ensure it remains at the top its game, with nearly $20 billion in spending planned over the next five years.

The company generates a waterfall of free cash flow and gives investors a healthy share of the profits every three months. BCE’s quarterly dividend of $0.65 per share yields 4.6%.

RioCan

RioCan operates shopping malls.

Some pundits say online shopping will be the death of the brick and mortar retailer, and that may turn out to be the case for some sectors, such as electronics, but RioCan’s anchor clients are not really at risk.

Most of the company’s largest clients are grocery stores, pharmacies, discount retailers, and providers of everyday household goods. Online orders are a part of their sales mix, but most consumers visit the stores to buy these products.

RioCan continues to deliver solid results and is piloting a new residential project at some of its sites that could churn out significant additional cash flow in the coming years.

The company pays investors a monthly distribution of 11.75 cents per unit, which translates into a yield of 5.6%.

Here are your top five income stocks for 2016!

For a look at five more top income picks, click here now to download our special FREE report, "Stop Following Bad Advice. Buy These 5 Dividend Stocks for Income in 2016!".

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

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.”

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.