The Motley Fool

5 Top Passive-Income Stocks for Pensioners

Retirees are on the hunt for income stocks to add to their TFSA portfolios.

When the investments are held inside a TFSA, the distributions from REITs and dividend stocks can go straight into your pocket without having to set some aside for the taxman.

Let’s take a look at five income stocks that might be interesting picks right now for your passive-income buy list.

RioCan Real Estate Investment Trust

RioCan (TSX:REI.UN) is working through a transition that will see the company sell up to $2 billion in non-core buildings in secondary markets, so it can fund its mixed-used developments in major cities. The strategy of combining residential units and retail space in desirable urban locations makes sense, as the rise in housing costs puts homeownership out of reach for more young professionals.

RioCan has a strong balance sheet and pays out a reliable distribution each month. Investors who buy today can pick up a yield of 5.4%.

Power Financial

Power Financial (TSX:PWF) is a holding company with interests or majority positions in a number of Canada’s highly recognized insurance and wealth management firms including Investors Group and Great-West Life.

The subsidiaries are performing well and Power Financial recently raised its dividend by 5%. The company also announced a significant share buyback.

The dividend provides a yield of 6%.

BCE

BCE (TSX:BCE)(NYSE:BCE) is a giant in the Canadian communications sector. The combination of the wireless and wireline infrastructure with the media division gives BCE the opportunity to interact with most Canadians on a daily basis. Free cash flow is expected to rise by 7-12% in 2019, and investors should see steady annual dividend growth continue around 5% per year.

The payout is about as safe at it gets in the Canadian market and offers a 5.25% yield.

Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) is a major natural gas and oil producer with arguably the best resource portfolio in the country. The company has a very strong balance sheet and is good at allocating capital to the best opportunities as market prices shift.

CNRL raised the dividend by 12.5% this year and is buying back shares while also reducing debt with excess free cash flow. The stock appears oversold right now and offers a solid 4.3% yield.

TC Energy

TC Energy (TSX:TRP)(NYSE:TRP) is the new name for TransCanada. The energy infrastructure giant has more than $30 billion in development opportunities that should support steady dividend growth in the coming years. The stock has enjoyed a nice rally in 2019, and more gains should be on the way. The current dividend provides a yield of 4.5%.

The bottom line

All five companies should be attractive picks for an income-focused TFSA portfolio today. An equal investment in the companies would provide balanced exposure to a variety of sectors and generate above-average yield.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Fool contributor Andrew Walke owns shares of BCE.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.