3 Stocks That Will Keep the Cash Flowing in Your Retirement

Canadian Utilities Limited (TSX:CU), Canadian Natural Resources Limited (TSX: CNQ)(NYSE: CNQ), and Potash Corp./Saskatchewan (TSX:POT)(NYSE:POT) all have the characteristics that investors should look for when picking an ideal retirement stock.

| More on:
The Motley Fool

Retirement should be a time of excitement and joy, but, unfortunately for many, just the mere mention of the word brings anxiety. Will I even be able to retire? Will I run out of money?  These concerns grew even louder during the last recession when many soon-to-be retirees saw the majority of their investments evaporate.  Now many are too scared to even think about putting money back in the stock market.

While these fears are somewhat justified, most people still need to invest their money to grow it to the point where they will actually be able to retire. Economic cycles will come and go, and will result in changes in the value of portfolios, but the best thing to do to prepare for retirement is to invest in stocks that have been consistent performers.

Here are three stocks that have consistently seen their share values increase over time, have a long-term investment case, and pay dividends, making them the ideal stocks to buy and hold for retirement.

1. Canadian Utilities Limited

Canadian Utilities Limited (TSX: CU) has been a steady performer for years. In fact, the company has hiked its dividend for 42 straight years! Consistent growth is exactly what investors should look for in a retirement stock. While the company has not stunned with huge swings in year-over-year performance, the stock has steadily trended up, and with its growth strategy, the increase in dividends and continued growth look like they are around to stay.

The company is investing in electricity transmission projects in Alberta, earmarking $6 billion in new projects through 2015 while also expanding in Australia and investing in green energy. The bet on Alberta’s economy could really pay off for the company. That province has experienced exponential growth due to its energy resources, growth that is projected to continue.

2. Canadian Natural Resources Limited

Canadian Natural Resources Limited (TSX: CNQ)(NYSE: CNQ) is Canada’s largest independent oil and gas producer and widely recognized as the low-cost producer of heavy oil.  The company is also in an excellent cash position, which has enabled the company to step up its growth through acquiring smaller companies. Its exposure to the growing oil sands production is a positive for growth, and its status as a low-cost producer means that it can survive the downswings in the cycle of oil prices.

While the company’s stock has definitely not been immune to economic cycles, over the past 14-years it has given investors some very healthy returns. In addition, the company is a dividend payer, with the current annual dividend yield just above 2%.  Long-term returns and a healthy growth forecast make Canadian Natural Resources another excellent addition to a retirement portfolio.

3. Potash Corp./Saskatchewan

There is a mixed view on Potash Corp./Saskatchewan’s (TSX:POT)(NYSE:POT) near-term outlook, but there is an excellent long-term case for the stock. Potash Corp. is the world’s largest fertilizer producer by capacity, supplying the three primary crop nutrients: potash (K), nitrogen (N), and phosphate (P).

While the company may go through some short-term weakness, the stock’s long-term potential is supported by the simple fact that the world’s population is growing and the amount of arable land we have is decreasing. In order to feed the global population, we need to get more out of the land that we have, and the best way to do that is to fertilize. While the demand for fertilizer may oscillate from year to year, over time it has to grow and the growing demand will fuel Potash Corp.’s stock value.

Since going public in the 1990s, Potash Corp. has gone from an obscure company to the recognizable leader in fertilizer production. With this growth, its stock has soared. While the stock has shown a great deal of volatility year over year, the fact is that it has gained considerable traction in a very short period of time. In addition to having a good outlook, the company has also become a healthy dividend payer, with its current annual yield at 4.14% making this yet another stock to consider for your retirement.

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 Leia Klingel owns shares of Potash Corp. The Motley Fool owns shares of Potash Corp.

More on Investing

Canadian Dollars
Stocks for Beginners

3 Stocks to Invest $30,000 in Right Now

Are you looking for some of the best stocks to invest in right now? Here's a trio that offer growth…

Read more »

Businessmen teamwork brainstorming meeting.
Dividend Stocks

1 Magnificent Dividend Stock Down 15% to Buy and Hold Forever

Enbridge is off the 12-month lows but still trades at a large discount to its 2022 high.

Read more »

Male IT Specialist Holds Laptop and Discusses Work with Female Server Technician. They're Standing in Data Center, Rack Server Cabinet with Cloud Server Icon and Visualization
Tech Stocks

Missed Out on NVIDIA? My Best Growth Stock Pick to Buy and Hold

A TSX growth stock is a top pick and profitable investment choice if you missed out on the ascent of…

Read more »

Increasing yield
Dividend Stocks

My Top 5 Ultra-High-Yield Dividend Stocks to Buy in May

If you’re looking to build a passive-income stream, these five dividend stocks should be on your radar.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Friday, May 24

The main TSX index seems on track to end the week in the red as it currently trades with 1.2%…

Read more »

consider the options
Bank Stocks

Is TD Bank Stock the Best Bank Stock for You?

TD Bank stock is reflecting a lot of the negative news. It remains a top bank stock trading at attractive…

Read more »

Payday ringed on a calendar
Dividend Stocks

A 10.6% Dividend Stock That Provides Monthly Cash Payments

A dividend stock with a mouth-watering yield providing monthly cash flow streams.

Read more »

Businessman holding AI cloud
Tech Stocks

Ready to Invest in Artificial Intelligence (AI)? 2 Stocks That Are Solid Bets

These two AI stocks provide investors with strong future opportunities as AI continues to become a part of our everyday…

Read more »