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

food restaurants
Dividend Stocks

Better Stock to Buy Now: Tim Hortons or Starbucks?

Starbucks and Restaurant Brands International are two blue-chip dividend stocks that trade at a discount to consensus price targets.

Read more »

Diggers and trucks in a coal mine
Metals and Mining Stocks

1 Canadian Mining Stock Worth a Long-Term Investment

Cameco (TSX:CCO) stock could be a great long-term investment for Canadian growth seekers.

Read more »

Pot stocks are a riskier investment
Investing

Could Investing $10,000 in Aurora Cannabis Stock Make You a Millionaire?

Let's dive into whether Aurora Cannabis (TSX:ACB) could be a potential millionaire-maker stock, or a dud, over the long term.

Read more »

stock analysis
Energy Stocks

Is Enbridge Stock a Good Buy in May 2024?

Boasting high-yielding dividends and a stable underlying business, Enbridge (TSX:ENB) might be a great buy for your self-directed investment portfolio…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Dividend Stocks

1 Growth Stock With Legit Potential to Outperform the Market

Identifying the stocks that have outperformed the market (in the past) is relatively easy, but selecting the ones that will…

Read more »

healthcare pharma
Tech Stocks

Well Health Stock Is Up 7% After Earnings: What Investors Need to Know

Well Health is benefiting from strong demand as it digitizes healthcare and strives to improve patient outcomes.

Read more »

money cash dividends
Dividend Stocks

Passive Income: The Investment Needed to Yield $1,000 Per Annum

Do you want to generate a juicy passive-income stream? Here's a trio of stocks that can generate a yield of…

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Dividend Stocks

Here’s the Average TFSA Balance in 2024

The average TFSA balance has steadily risen over the last six years and surpassed $41,510 in 2023. Will the TFSA…

Read more »