The Motley Fool

2 Stocks to Help You Retire Wealthy

Image source: Getty Images.

No one wants to spend their golden years struggling to make ends meet. Fortunately, if you start early enough, it is possible to avoid having to work during your retirement years.

Through the magic of investing, the average person can secure enough money to live relatively comfortably during retirement.

Of course, not all investments are created equal, and there are no guarantees in life. But if the possibility of saving enough money by investing in the stock market entices you, here are two companies whose stocks you should consider buying. 

The best of the telecom industry 

BCE Inc (TSX:BCE)(NYSE:BCE) is the largest broadband provider in Canada, both by market cap and by the number of customers it serves. However, this success hasn’t caused BCE to rest on its laurels.

The firm is actively looking to gain an even greater advantage in the industry. BCE has been doing so by switching its network to fiber-to-the-home (FTTH). This upgrade will serve at least two goals.

First, it will allow BCE to increase the speed of its network. Perhaps this will allow the firm to attract an even greater customer base, charge higher premiums, or both.

Second, FTTH will allow the company to operate more efficiently, which should lead to higher margins. 

In addition to its strong broadband operations, BCE — which owns Bell — is one of the largest providers of wireless services in Canada.

The company benefits from some of the fastest wireless speeds in the industry, in part thanks to its network sharing agreements with its competitor Telus Corp (TSX:T) (NYSE:TU).

All things considered, BCE seems ideally positioned to dominate the Canadian telecom industry for many years to come.

The firm offers an excellent dividend yield, which currently stands at 4.69% (at writing). BCE has increased its dividend payouts by about 96% over the past 10 years, which amounts to an annual average increase of more than 9%. 

A dividend superstar

Canadian Utilities Ltd (TSX:CU) benefits from some of the perks of its industry. The vast majority of the company’s earnings are either regulated or come from long-term contracts. In short, the firm’s earnings are secure, even in times of economic downturns.

Canadian Utilities benefits from a geographically and operationally diverse business. The company operates in its domestic Canadian market, as well as in Mexico and Australia.

The firm also offers natural gas transmission and liquid storage services through its pipelines and liquids segment. Of course, Canadian Utilities is actively investing in various growth projects to improve its prospects.

This includes a more than $3 billion investment package that will lead to an increase in the company’s exposure to regulated earnings.

Perhaps the company’s most important claim to fame — at least from the perspective of investors — is its nearly flawless dividend record. The firm prides itself on having the “longest track record of annual dividend increases of any Canadian publicly traded company.”

Canadian Utilities has increased its dividend for a whopping 48 years straight. The company currently offers a dividend yield of 4.69%, and with a payout ratio just under 50%, investors can be sure that the firm will continue delivering regular dividend increases.

Finally, Canadian Utilities is trading at just 10 times past earnings, an attractive valuation given the company’s standing.

The bottom line

Both BCE and Canadian Utilities are well-established in their respective industries, possess a broad revenue base, and are making investments that will pay rich dividends in the future, literally and figuratively.

Further, both stocks have provided decent —though not market-beating — returns over the years. That is, however, because both stocks are relatively low risk, which means they are likely to come out of difficult economic times better than most. 

Putting your money in either — or both — of these stocks could help you build a solid nest egg for the future. 

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 Prosper Bakiny has no position in any of the stocks mentioned.

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.