Retirees: 3 Stocks That Provide Huge Monthly Income

Canadian retirees may be stressed in this crisis, but dividend stocks like TransAlta Renewables Inc. (TSX:RNW) provide income that will alleviate stress.

| More on:
Payday ringed on a calendar

Image source: Getty Images

The April market rally has injected some excitement back into the investing world, but that does not mean Foolish readers should rest easy. Recent data has shown the devastating impacts of the COVID-19 lockdowns, and there are few sectors that are safe from the carnage. This is a particularly troubling time for retirees or those just nearing retirement. That is why it may be a good time to snag stocks that provide monthly income.

Why monthly dividends are great for retirees

Back in early 2019, I’d discussed why I loved monthly dividend stocks in a Tax-Free Savings Account (TFSA). This is a vehicle that retirees and those nearing retirement should seriously consider in this environment. A $40,000 investment spread across the stocks I will cover today could net a retiree roughly $200 per month in dividends — better yet if those payouts come in a TFSA. Let’s jump into the stocks.

Bird Construction (TSX:BDT) operates as a general contractor across Canada. Construction projects have been labelled an essential service across the country, although some projects that have been pushed back from their start date. Shares of Bird have climbed 14% month over month as of close on April 30.

The company is set to release its first-quarter 2020 results on the morning of May 13. In 2019, Bird reported construction revenue of $1.37 billion compared to $1.38 billion in the prior year. However, it posted net income of $9.48 million compared to a net loss of $1.01 million in 2018. Adjusted EBITDA also increased to $32.2 million over $10.9 million in the prior year.

Shares of Bird last had a fair price-to-earnings (P/E) ratio of 23 and a price-to-book (P/B) value of 1.7. The stock offers a monthly dividend of $0.0325 per share. This represents a tasty 7.5% yield.

Two top green energy stocks with nice dividends

Utilities are an obvious essential service and therefore a suitable target in this crisis. Below are two of my favourite targets for retirees right now.

TransAlta Renewables develops, owns, and operates renewable power generation facilities. Last year, I’d discussed why young and old investors should look to invest in green energy equities. Shares of TransAlta have climbed 15% year over year as of close on April 30.

Investors can expect to see TransAlta’s first-quarter 2020 results on May 12. In 2019, the company saw comparable EBITDA increase 2% to $438 million. The stock last had a solid P/E ratio of 22 and a P/B value of 1.7. TransAlta stock last paid out a monthly distribution of $0.07833 per share. This represents a strong 6.2% yield.

Northland Power is another utility I have my eyes on to start the month of May. This company develops, builds, owns, and operates clean and green power projects in Canada and Europe. Its shares have increased 30% year over year.

The company will release its Q1 2020 results on the morning of May 13. Shares are trading close to its 52-week high, but it still possesses a favourable P/E ratio of 17. Northland Power last paid out a monthly dividend of $0.1 per share. This represents a solid 4% yield.

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.

More on Dividend Stocks

Retirement
Dividend Stocks

Passive Income: Buy Dividends to Rule Your Retirement

You can establish a passive-income stream by investing in high-dividend ETFs like BMO Equal Weight Banks ETF (TSX:ZEB).

Read more »

consider the options
Dividend Stocks

Magna Stock: Is a 3% Dividend Yield Enough to Make Investors Stay?

Magna (TSX:MG)(NYSE:MGA) stock has grown 8% in the last week but is down over the last year. So is a…

Read more »

Close up shot of senior couple holding hand. Loving couple sitting together and holding hands. Focus on hands.
Dividend Stocks

Retirees: How to Stay Calm in Market Downturns

Are you losing sleep because of market volatility? Here are three tips that should give you peace of mind.

Read more »

Index funds
Dividend Stocks

Buy the Pullback: 2 Top TSX Dividend Stocks for RRSP Investors

The drop in the TSX Index is giving RRSP investors a chance to buy top dividend stocks at cheap prices.

Read more »

Dividend Stocks

2 Stable REITs for $177 in Monthly Income

These two REITs offer stable income you can bring in each month but also have valuable numbers for investors wanting…

Read more »

funds, money, nest egg
Dividend Stocks

3 of the Best Dividend Stocks to Combat Inflation and Rising Interest Rates

Suncor, TD Bank, and Tourmaline are dividend stocks benefitting from rising inflation and rising interest rates.

Read more »

Community homes
Dividend Stocks

Housing Correction of 20% Could Come in 2022: How to Prepare

A housing correction of up to 20% could be coming thanks to inflation and interest rates, but there are other…

Read more »

grow dividends
Dividend Stocks

WOW! This Canadian Dividend Stock Is Incredibly Cheap

While there are lots of opportunities for investors in the market today, one of the best to buy now is…

Read more »