Nearing Retirement? Then These 3 Income Machines Should Be in Your Portfolio

Why Cominar Real Estate Investment Trust (TSX:CUF.UN), BCE Inc. (TSX:BCE)(NYSE:BCE), and TransAlta Corporation (TSX:TA)(NYSE:TAC) should be in every income investor’s portfolio.

| More on:
The Motley Fool

Whether you’re a retiree, nearing retirement, or just want to invest in something that pays you to own it, just about every investor likes getting a dividend.

Getting paid to own a stock is great. Sure, you can make the argument that a company buying back its shares is a better use of its capital (since it doesn’t trigger a taxable event for investors, like paying a dividend does), but just about every investor I know would rather have the money in their pocket.

Dividends are flexible, too. An investor can choose to reinvest them back into the original company, put them in a stock they feel is undervalued, or take them as cash and spend the money on a vacation.

Generally, investors who are nearing retirement are switching over from higher growth names to companies with lower growth and a higher current dividend yield. Considering the markets are hitting new all-time highs, it’s a great time to do just that.

With that in mind, here are three stocks that should provide investors with a good yield, a safe payout, and even the potential for capital gains.

Cominar Real Estate Investment Trust

Cominar Real Estate Investment Trust (TSX: CUF.UN) might be my favorite REIT.

Not only does the company pay a generous 7.7% yield, but it just increased its monthly payout from 12 to 12.25 cents per unit. It also has a payout ratio under 90%, which is exactly what REIT investors want to see.

It’s also growing rapidly, almost tripling book value since 2010. It just announced the acquisition of 15 more properties in Quebec for $1.5 billion, at a pretty attractive 6.5% cap rate. Management is confident it can digest the acquisition and still keep the company’s payout ratio under 90%.

It also trades at a 20% discount to its book value, making it one of the cheapest REITs in the country. Its a cheap REIT with a nice dividend and upside potential. What’s not to like?

BCE Inc. 

I once had coffee with a very happy BCE Inc. (TSX: BCE)(NYSE: BCE) shareholder, who had one simple rule when it came to investing in the name: He bought more whenever the dividend was more than 5%.

I can only assume he’s buying more now, as the company’s yield has gone up to 5.1% on this recent selloff. Not only are investors getting a nice, growing dividend, but BCE is also a leader in providing cable TV, Internet, and still owns more than 25% of Canada’s wireless market. It has a great moat.

The company is also a huge player in Canada’s media sector, owning properties such as The Globe and Main, CTV, TSN, a wide selection of specialty television and radio stations, and even a chunk of the Toronto Maple Leafs and Raptors. Oh, and it’s about to acquire Bell Aliant Inc. (TSX: BA), which has a dominant market share in Atlantic Canada.

TransAlta Corporation

Yes, I realize TransAlta Corporation (TSX: TA)(NYSE: TAC) hasn’t exactly been the poster child of consistency, but I think the company has turned the corner.

It was plagued by unexpected repairs and maintenance to its coal power plants, both in Alberta and the western United States. This led the company to ultimately slash its dividend by 50% early in 2014.

But the new yield looks to be safe, and TransAlta is working through its problems. The company was hurt by lower power prices in Alberta and the Pacific Northwest, but it should get a break starting in 2017 when some of its contracts come up for renewal.

The company has a dividend yield above 6%, and currently trades at just a hair above book value, where it hasn’t traded since 2004. Good things could come to investors who brave the bad news and buy the company at these depressed levels.

Fool contributor Nelson Smith has no position in any stocks mentioned.

More on Dividend Stocks

Colored pins on calendar showing a month
Dividend Stocks

3 Monthly Dividend Stocks to Buy and Hold Forever

Three monthly dividend stocks that provide consistent income, strong fundamentals, and long‑term potential for investors building passive cash flow.

Read more »

dividend stocks bring in passive income so investors can sit back and relax
Dividend Stocks

5 Canadian Dividend Stocks Everyone Should Own

Let's dive into five of the top dividend stocks Canada has to offer, and why now may be an opportune…

Read more »

Investor reading the newspaper
Dividend Stocks

TFSA Investors: What to Know About the New CRA Limit for 2026

Stashing your fresh $7,000 of 2026 TFSA room into a steady compounder like TD can turn new contribution room into…

Read more »

a person prepares to fight by taping their knuckles
Stocks for Beginners

3 Defensive Stocks That Could Thrive During Economic Uncertainty

Market volatility doesn’t disappear entirely. That’s why owning one or more defensive stocks is key.

Read more »

dividend growth for passive income
Dividend Stocks

2 Dividend-Growth Stocks to Buy and Hold Through 2026

Are you looking for some dividend-growth stocks to add to your portfolio? Here are two great picks that every investor…

Read more »

Canada Day fireworks over two Adirondack chairs on the wooden dock in Ontario, Canada
Dividend Stocks

3 Dividend Stocks to Help You Achieve Financial Freedom

These three quality dividend stocks can help you achieve financial freedom.

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

Passive Income: How to Earn Safe Dividends With Just $20,000

Here's what to look for to earn safe dividends for passive income.

Read more »

Canada Day fireworks over two Adirondack chairs on the wooden dock in Ontario, Canada
Dividend Stocks

Buy Canadian With 1 TSX Stock Set to Boom in 2026 Global Markets

Canadian National could be a 2026 outperformer because it has a moat-like network, improving efficiency, and a valuation that isn’t…

Read more »