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

growing plant shoots on stacked coins
Dividend Stocks

4 Ways to Grow $100,000 Into $1 Million in Retirement Savings

Anyone can build a million-dollar retirement portfolio. Here are four ways you could practically grow $100,000 to $1 million.

Read more »

A shopper makes purchases from an online store.
Dividend Stocks

3 Reasons to Buy TFI Stock Like There’s No Tomorrow

TFI stock (TSX:TFII) had a hard 2023, but now it's set up for a solid 2024, with an acquisition that…

Read more »

Dividend Stocks

5 Secrets of TFSA Millionaires

These lesser-known secrets can help you set up the perfect long-term portfolio and achieve a million-dollar TFSA!

Read more »

analyze data
Dividend Stocks

How to Build a Powerful Passive-Income Portfolio With Just $20,000

These fundamentally strong TSX stocks have paid and increased their dividend in all market conditions. Add these stocks to build…

Read more »

Canadian stocks are rising
Dividend Stocks

iShares S&P/TSX Capped REIT Index ETF (TSX:XRE): Why I Like this ETF Better Than a Rental Property

XRE is a great ETF for gaining exposure to the Canadian real estate sector.

Read more »

Payday ringed on a calendar
Dividend Stocks

3 High-Yield Dividend Stocks That Pay Cash Every Month

These three dividend stocks all offer high yields and have sustainable dividends, making them some of the best investments to…

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

3 Stocks That Could Create Lasting Generational Wealth

If you want to start transferring over your wealth, you'll need to actually have some! And these are three stocks…

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

Down by 25%: Is Canadian Tire Stock a Buy in February 2024?

Take a closer look at this Canadian retail stock if you are looking for low-cost additions to your self-directed portfolio…

Read more »