4 Top Stocks to Build Your Retirement Wealth

Stocks such as Toronto-Dominion Bank (TSX:TD)(NYSE:TD) and Altagas Ltd. (TSX:ALA) are solid wealth builders and make great additions to your retirement portfolio.

Karen Thomas, MSc, CFA

Karen is a stock market enthusiast focused on uncovering those stocks that she believes the market has mispriced. She does this through fundamental and quantitative analysis of companies and their industries, as well as a study of future opportunities and trends. She holds a Masters degree in Finance, the CFA designation, and has over 20 years of experience in the investment management industry. Having worked at a major pension fund, as well as two leading mutual fund firms as an analyst and portfolio manager, she has solid investing expertise which she aims to share with her readers.

Published January 24, 2018 8:13 am EST

Maybe retirement is upon you already, or coming soon, or maybe it seems like light years away. Either way, the message is the same: the earlier you plan and think about your retirement nest egg, the better.

So, what better time than now?

Here are four high-quality stocks to put investors on a clear path to building retirement wealth, largely through dividends, but also through slow and steady capital appreciation.

Brookfield Infrastructure Partners L.P. (TSX: BIP.UN)(NYSE: BIP)

Although this stock has rallied almost 14% in the last year, Brookfield still has some good upside ahead in the form of dividends as well as capital appreciation.

With a current dividend yield of 4.2%, this $16 billion company has a strong past and future.

Since 2009, Brookfield has grown its funds from operations by a compound annual growth rate (CAGR) of 24% and its per-unit distribution by a CAGR of 12%.

Going forward, management is targeting 5-9% annual growth in distributions and long-term ROE of 12-15%. Long-term cash contracts and predictable cash flows make this stock a great buy.

NorthWest Health Prop Real Est Inv Trust (TSX:NWH.UN)

Having risen 13% in the last year, NorthWest is a 6.99% yielder with exposure to one of the most significant demographic trends: the aging population.

The company has a high-quality and global diversified portfolio of healthcare real estate properties, which generally have stable occupancies and long-term leases, which make the underlying REIT a defensive one that is attractive for your retirement portfolio.

The shares are trading just over book value and present a great opportunity to establish positions.

Toronto-Dominion Bank (TSX: TD)(NYSE: TD)

With $1.2 billion in total assets, Toronto-Dominion Bank is currently Canada’s biggest bank, with the most assets and the second-most deposits.

As interest rates rise, the spread between the rate the banks pay customers and the rate the bank receives widens, bringing more profit to the bank’s bottom line.

Since 1995, the bank’s dividend has grown at an annualized rate of 11%, and the current dividend yield is an attractive 3.2%.

The stock has rallied 9.4% in the last year, all the while paying a dividend of more than 3%.

Altagas Ltd. (TSX: ALA)

Altagas shares currently present as a good opportunity for the investor that can see beyond the immediate uncertainty.

Currently yielding 7.47%, the shares have declined 35% in the last three years and 12% since January 2017. So, new investors can get into this stock at really good levels.

The company’s most recent results were better than expected, coming in at cash flow of $0.69, and the company increased its dividend by 4.3%, as we await asset dispositions that will help fund the WGL acquisition.

Bottom line

In summary, retirement wealth can be built with these high-quality, dividend-paying stocks that also have macroeconomic variables working in their favour and therefore, good share price upside.