The Motley Fool

RRSP Investors: Retire Rich With These Dividend Stocks

Senior couple at the lake having a picnic
Image source: Getty Images

The Registered Retirement Savings Plan (RRSP) is a great tool for saving and investing for your retirement. Because any amount withdrawn from RRSPs will be counted as taxable income, people refrain from taking money out.

Here are some of the best dividend stocks you can consider for your RRSP today.

Brookfield Property

Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY) owns and operates a globally diversified portfolio of real estate assets with a focus on office and retail properties. Recent occupancies in the core office and retail portfolios were 93% and 95%, respectively.

The company also has approximately 15% of its balance sheet in opportunistic investments including multifamily, logistics, hospitality, triple net lease, self-storage, student housing, and manufactured housing assets.

This portfolio aims for mispriced assets and outsized total returns of about 20%! As the portfolio has increased in size, the realized gains from it have exponentially grown! The good news is that growth is expected to continue. Meanwhile, BPY also earns stable funds from operations (FFO) from its entire portfolio.

grow your investments

Since 2013, Brookfield Property has roughly tripled the size of its overall portfolio to approximately US$90 billion of total assets thanks to several transformative acquisitions, including last year’s US$40 billion acquisition of GGP, a retail REIT that owned a top-notch U.S. portfolio. Prior to the acquisition, BPY already owned a 34% interest in GGP and understood it well. Now, BPY has more control, such as in redevelopments and densification opportunities.

What’s important for RRSP investors is that Brookfield Property offers a safe, high yield while growing its cash distribution. Since inception, BPY has increased its FFO by 9% per year and its cash distribution by 6% per year. Thereby, it was able to improve its payout ratio to 80%.

Currently, Brookfield Property is good for a whopping yield of 6.8%, and it’s growing the cash distribution by 5-8% annually. It pays a U.S. dollar-denominated cash distribution.

BPY’s cash distribution can consist of interests, dividends, other income, and return of capital, which makes it a breeze to hold in an RRSP but a potential nightmare to hold in a taxable account when tax time comes around.

Other great dividend stocks to hold in your RRSP

U.S. stocks are a wonderful way to diversify your dividend portfolio. Many U.S. stocks are international corporations that offer excellent dividend income and long-term dividend growth and price appreciation.

Essentially, you’ll be exempt from the 15% foreign withholding tax on qualified dividends if you hold the U.S. stocks in an RRSP. So, you should focus on quality high-yield U.S. dividend stocks in your RRSP.

For instance, Johnson & Johnson and Simon Property Group are undervalued stocks that offer yields of 3% and 5.6%, respectively. Investors should research further to determine if the stocks make a good fit for their dividend portfolios.

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 Kay Ng owns shares of Brookfield Property Partners, Johnson & Johnson, and Simon Property Group. Brookfield Property Partners 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.