Retirees: Get 5% Yields From These 2 Blue-Chip Stocks

Canadian pensioners are searching for top income stocks to add to their TFSA portfolios.

Let’s take a look at BCE Inc. (TSX:BCE)(NYSE:BCE) and RioCan Real Estate Investment Trust (TSX:REI.UN) to see why they might be attractive picks.


BCE has long been a popular stock among Canadian retirees, and there is little reason for that to change.


The company recently closed its $3.9 billion acquisition of Manitoba Telecom Services in a deal that launches BCE into the top spot in the Manitoba market and gives the communications giant a strong base in central Canada to expand its presence into the western provinces.

Over the past decade, BCE has also invested heavily in the media space, acquiring a TV network, specialty channels, radio stations, sports teams, and an ad agency.

In addition, the company owns an extensive network of retail stores.

When you combine these assets with the world-class wireless and wireline network assets, you get a very powerful business that interacts with most Canadians on a weekly, if not daily, basis.

Think about it.

Any time a person in this country sends a text, calls a friend, checks e-mail, streams a movie, downloads a song, watches the news, or listens to the weather report, the odds are pretty good that BCE is involved somewhere along the line.

Revenue growth doesn’t knock the ball out of the park, but the company generates significant free cash flow, and that’s the key to supporting the dividend.

BCE’s payout provides a yield of 4.7%.


RioCan has interests in about 300 retail locations across Canada.

The company’s core tenants tend to be large, well-established businesses that provide recession-resistant products, such as groceries, pharmaceuticals, discount goods, and everyday household items.

Demand for RioCan’s properties remains robust, and the company is a doing a good job of reducing debt. At the end of 2016, RioCan’s debt-to-total-asset ratio was 40% compared to 46% at the same time the previous year.

RioCan has a number of retail developments underway that will expand the REIT’s footprint by 3.8 million square feet. The company is also pursuing a residential project where up to 10,000 units could be built at RioCan’s top locations in six core markets.

RioCan pays a monthly distribution of 11.75 cents per unit. The current yield is 5.3%.

Should you buy?

The payouts at both companies should be safe, and an equal investment in BCE and RioCan would provide an average yield of 5% today.

That’s pretty good in the current environment.

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

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