The Motley Fool

Retirees: 3 Top Stocks to Claim Growing Income for Life

Hi again, Fools. I’m back to highlight three top dividend-growth stocks. As a quick reminder, I do this because businesses with consistently increasing dividend payouts

  • can guard against the harmful effects of inflation by providing a growing income stream; and
  • tend to outperform the market averages over the long haul.

The three stocks below offer an average dividend yield of 3.9%. Thus, if you spread them out evenly in an average $250K RRSP account, the group will provide you with a growing $9,750 annual income stream. And it’s all completely passive.

Let’s get to it.

Royal treatment

Leading off our list is financial services giant Royal Bank of Canada (TSX:RY)(NYSE:RY), which has steadily grown its dividend 41% over the past five years.

RBC’s highly regulated operating environment, massive scale, and diversified business model continue to support growing payouts for shareholders. Despite a revenue slump at its investment bank — RBC Capital Markets — Q3 EPS improved 6% and revenue grew 5% to $11.5 billion.

Meanwhile, RBC’s CET1 ratio — a key measure of a bank’s capital position — improved to 11.9%.

“RBC is well-positioned to further grow our market share and navigate the evolving market environment,” said President and CEO Dave McKay.

RBC shares are down about 6% over the past three months and currently offer a dividend yield of 4.1%.

Chugging along

With a dividend that has more than doubled over the past five years, railroad behemoth Canadian National Railway (TSX:CNR)(NYSE:CNI) is next on our list.

CN Rail’s dividend continues to be supported by strong economies of scale, as well as timely tailwinds in the form of rising rail traffic and price increases. In Q2, revenue improved 9% to $4 billion, including a 25% spike in its petroleum and chemicals segment.

Looking ahead, management sees full-year adjusted EPS growth in the double-digit range.

“Our focus on delivering profitable growth and advanced technologies to modernize our scheduled railroading model is expected to continue driving long-term value creation for our shareholders,” said President and CEO JJ Ruest.

CN shares are up 29% in 2019 and offer a yield of 1.7%.

Keying in

Rounding out our list is midstream energy company Keyera (TSX:KEY), which has delivered steady dividend growth of 45% over the past five years.

Keyera’s payout growth is underpinned by well-integrated assets across the nation, smart acquisitions, and strong cash flows. In its Q2 results last month, EPS doubled over the year-ago period. Meanwhile, distributable cash flow clocked in at a solid $144 million.

Based on that strength, management hiked its monthly dividend by 7% from $0.15 to $0.16, or $1.92 per share annually.

“Our midstream services remain in high demand and our capital projects are on schedule and on budget,” wrote the company.

Keyera shares are up 23% so far in 2019 and currently offer a juicy dividend yield of 6%.

The bottom line

There you have it, Fools: three attractive dividend-growth stocks worth checking out.

As always, they aren’t formal recommendations. They’re simply a starting point for more research. The breaking of a dividend-growth streak can be especially painful, so plenty of due diligence is still required.

Fool on.

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 Brian Pacampara owns no position in any of the companies mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.

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.