Recent surveys have revealed a troubling reality; many Canadians are not prepared for retirement. Fidelity recently released a study that saw 70% of pre-retiree respondents say that they expected to be working in retirement. The survey tallied 2,000 Canadians aged 45 and older. Another 46% of respondents said that they expected to carry debt into retirement.
There was a key point in the survey that readers need to digest this summer; 87% of respondents with a written financial plan said they had a positive outlook for retirement, while 42% of those without a plan had a negative outlook. The takeaway from this tidbit should be obvious; plan for retirement!
Of course, having discipline with a plan and having investment success are two different things. For the latter, we will cover two stocks that are a perfect fit for an RRSP. Both boast a wide economic moat, attractive income and an impressive history of dividend growth, which means that your RRSP is kept fed with steady income for years to come.
Suncor (TSX:SU)(NYSE:SU) was my top stock pick for the month of May. The oil and gas giant had to contend with the emergence of a bear market in oil but has remained sturdy as we kick off the summer. Shares have dropped 5% over the past three months as of close on June 26. This is an income-generating equity to trust for the long term, and savvy investors should look to buy low.
Suncor is now at the low end of its 52-week range. The oil and gas giant boasts steady cash flow and has a wide economic moat, albeit in a sector facing long-term challenges. Former CEO Steve Williams predicted in 2017 that oil sands would be around for the next 100 years. This is a stock you can trust for the long haul.
The company last bumped up its quarterly dividend payout to $0.42 per share, which represents a 4% yield as of this writing. Suncor has achieved dividend growth for 16 consecutive years.
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Fortis (TSX:FTS)(NYSE:FTS) remains one of my favourite dividend stocks on the TSX, especially for investors building a retirement portfolio. Shares have averaged a 9% annual return over the past decade, which is a top shelf performance for a utility.
Fortis currently pays out a quarterly dividend of $0.45 per share, which represents a 3.4% yield. The company has reported dividend-growth for 45 consecutive years, which puts it on track to become a dividend king in the next decade.
Fortis has committed to a massive 5-year investment plan that will grow its rate base and enable dividend-growth into 2023. Moreover, utilities are a prime target after central banks have taken a dovish turn.
If the U.S. Federal Reserve moves to cut its benchmark rate, odds are that Bank of Canada will follow suit. A softening rate environment will continue to contribute to a bullish environment for utility stocks.
Fortis has all the makings of a stellar retirement holding. The only drawback is its price in the summer, which long-term investors can mitigate by committing to dollar cost averaging rather than waiting on a more favourable entry point.
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 Ambrose O'Callaghan has no position in any of the stocks mentioned.