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TFSA Investors: 2 Leading Dividend Stocks to Help Build Retirement Wealth

Are you searching for ways to ensure you can enjoy a comfortable lifestyle in retirement?

Many Canadians do not have pension programs at work, or if they do, the benefits might not be sufficient to cover the anticipated expenses in the golden years.


Life expectancy is increasing, but defined-benefit pensions that guarantee fixed payments throughout your retirement years are becoming harder to find. Most companies have adopted defined-contribution plans that only pay out as much as the fund is worth, thus placing the financial risk on the shoulders of the employee.

In addition, Canada Pension Plan and Old Age Security payments are available today, but the size of the payouts and the age at which someone can start collecting might be quite different in two or three decades.

As a result, it isn’t a surprise that people in the early part of their careers are taking a hard look at how they are going to pay the bills and enjoy some leisure activities down the road.

One strategy for creating a retirement wealth fund involves holding dividend stocks inside a self-directed TFSA. The full value of the distributions can be used to buy new shares, and when the time comes to cash out and spend the money, any capital gains that have accrued are 100% yours to keep.

Let’s take a look at three stocks that might be interesting picks right now to start a TFSA retirement portfolio.


BCE is Canada’s largest communications company with a market capitalization of $52 billion. This gives it the financial capability to invest the billions of dollars needed to expand and upgrade its mobile and wireline network infrastructure and protect its wide moat. Wireless, internet, and TV subscriber growth is steady, and the company has the power to raise rates when it needs some extra cash.

BCE raised its dividend by 5% for 2019. The current payout provides a yield of 5.4%.

Suncor (TSX:SU)(NYSE:SU)

Suncor is a giant in the Canadian energy sector with a market capitalization of $72 billion. The company has a solid balance sheet, and its integrated business structure, which includes production, refining, and retail operations, provides a balanced revenue stream.

The company grows through organic projects and strategic acquisitions, and its unique market access ensures it gets the best price for most of its production.

Suncor just raised the dividend by nearly 17% for 2019. That suggests management is comfortable with the revenue and cash flow outlook, despite the challenging times in the Canadian energy sector. The stock appears somewhat oversold right now and provides a solid 3.7% dividend yield.

The bottom line

BCE and Suncor are market leaders with strong businesses and reliable dividends. If you are searching for anchor stocks to start a TFSA retirement program, these companies deserve to be on your radar.

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Fool contributor Andrew Walker owns shares of BCE.

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