2 Dividend Stocks Perfect for Retirees

A strong track record, stable income, and an ever-increasing dividend means you can count on these two companies for a long time.

| More on:
The Motley Fool

When you’re young, it’s easy to take risks, especially when it comes to investing. The thought of hitting a home run is very exciting, and if a mistake is made, there’s plenty of time to recover. There’s no need for a steady payout, and there’s probably a long-term focus. If there are a few bumps along the way, it’s no big deal.

For retirees, it’s a different story. All of a sudden, preservation of capital is the top goal. An income stream is also a must. If a company has a spotty history, that may be harder to overlook. With that in mind, below are two stocks that one can retire on.

1. Telus

Telus (TSX: T)(NYSE: TU) operates in one of Canada’s most stable sectors, one with high barriers to entry, limited competition, and subscription-based revenue. This is the perfect environment for predictable earnings and a rock-solid dividend.

Even better, Telus has done an especially good job. It has been adding far more wireless customers than its competitors, and keeping these customers happier too — in a typical month, less than 1% of the company’s wireless subscribers cancel their service. This is tops in Canada and also puts Telus among the world’s best.

Best of all, Telus is not overly expensive, and as a result, the shares yield a respectable 3.9%. Furthermore, this is a dividend that gets raised fairly regularly, and shareholders are counting on this to continue.

2. Tim Hortons

There may be no other company more quintessentially Canadian than Tim Hortons (TSX: THI)(NYSE: THI). This was confirmed by Canadian Business, which just ranked it as the top brand in the country for the second year in a row.

If you’re not looking for any surprises as an investor, this is exactly the kind of company you should be looking for: a company so rooted in the hearts and minds of Canadians that competitors have a very difficult time breaking through. It’s true that many are trying, but Tim Hortons will have a sizable lead in its industry for a long time.

At first glance, Tim Hortons may seem more expensive than Telus, with only a 2.2% dividend yield. But it also has more opportunities to grow, whether from new menu items, new times in the day (such as lunch), or expansion into the United States. Also, this is a company that has raised its dividend by 360% since going public in 2006.

Like Telus, Tim Hortons is a company you can count on to pay ever-increasing dividends for a long time.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Benjamin Sinclair holds no positions in any of the stocks mentioned in this article.

More on Investing

money cash dividends
Stocks for Beginners

Where to Invest $10,000 in April 2024

If you've already created a diversified portfolio and are looking for more options from a windfall, here is where I…

Read more »

data analyze research
Investing

The Ultimate TSX Stock to Buy With $1,000 Right Now

Brookfield Asset Management (TSX:BAM) is one of the best Canadian stocks to buy for those looking to put capital to…

Read more »

young woman celebrating a victory while working with mobile phone in the office
Dividend Stocks

3 CRA Benefits Most Canadians Can Grab in 2024

You can save on taxes by claiming the dividend tax credit on Fortis Inc (TSX:FTS) shares.

Read more »

A cannabis plant grows.
Cannabis Stocks

Canopy Growth Stock Is Rising But I’m Worried About This One Thing

Canopy Growth stock is soaring as the legalization effort makes real progress in both Germany and the United States.

Read more »

young woman celebrating a victory while working with mobile phone in the office
Investing

3 Roaring Stocks to Hold for the Next 20 Years

These top TSX stocks are excellent long-term buys, given their multi-year growth potential and solid underlying businesses.

Read more »

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

grow dividends
Investing

Here’s My Top 3 TSX Stocks to Buy Right Now

Even though the TSX has been rising, there are still some good bargains out there. Here are three top compounding…

Read more »

Target. Stand out from the crowd
Investing

Prediction: This Canadian Growth Stock Could Double by 2030

Alimentation Couche-Tard (TSX:ATD) is a top growth stock that could do well over the next six or so years.

Read more »