Retirees: 3 Top Canadian Income Stocks Yielding 4-6.5%

Here’s why TransCanada Corporation (TSX:TRP)(NYSE:TRP), Keg Royalties Income Fund (TSX:KEG.UN), and TransAlta Renewables Inc. (TSX:RNW) should be on your radar.

| More on:
retired life

Canadian retirees are searching for dividend stocks with reliable distributions to hold in their income portfolios.

Let’s take a look at TransCanada Corporation (TSX:TRP)(NYSE:TRP), Keg Royalties Income Fund (TSX:KEG.UN), and TransAlta Renewables Inc. (TSX:RNW) to see why they might be interesting picks.

TransCanada

TransCanada has a long track record of dividend growth, and that trend should continue.

The company purchased Columbia Pipeline Group last year in a US$13 billion deal that added strategic gas assets in the growing Marcellus and Utica plays as well as important pipeline infrastructure stretching from Appalachia to the Gulf Coast.

The company’s near-term capital program is currently $24 billion. As those projects are completed and go into service, TransCanada expects cash flow to grow enough to support dividend increases of at least 8% through 2020.

The current distribution provides a yield of 4%.

The Keg

If you like steak, you have probably eaten at a Keg restaurant.

The company has been around for a long time, and while the décor in the new restaurants has changed with the times, the core recipe for success has remained the same.

People who go to The Keg know they are going to get great food and great service in a comfortable and fun environment.

The chain has about 100 restaurants these days, generating sales of about $600 million.

Income investors like the name because it provides reliable monthly payouts that offer an above-average yield. Long-term investors have also picked up some nice capital gains.

The payout currently provides an annualized yield of 5.3%.

TransAlta Renewables

TransAlta Renewables is majority owned by TransAlta Corporation and holds most of the renewable power-generation assets, including hydroelectric facilities, wind farms, and gas-fired power plants.

The company just completed its South Hedland facility, which is expected to contribute $80 million of EBITDA on an annualized basis.

As a result, management just bumped the dividend up by 7%.

At the time or writing, the new monthly payout of $0.07833 per share provides an annualized yield of 6.5%.

The bottom line

The payouts from all three companies should be safe, and an equal investment in each one would provide an average yield of better than 5%.

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 Andrew Walker owns shares of TransAlta.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »

sale discount best price
Dividend Stocks

1 Dividend Stock Down 11 Percent to Buy Right Now

Do you want a great dividend stock down 11% that can provide years of growth potential? Here's one heavily discounted…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Are you looking for dividend stocks to buy right now? Here are two top picks!

Read more »

edit Taxes CRA
Dividend Stocks

Tax Time: How to Keep More of Your Money

Nearly everyone hates paying taxes, although Canadians can lessen the financial pain with the right tax strategies.

Read more »