The Motley Fool

Retirement Income: 3 Top Dividend Stocks Yielding up to 8%

With interest rates so low, you can’t just rely on saving accounts or GICs to earn decent retirement income. If you plan to put together a reliable nest egg for your retirement years, then you should add some quality dividend stocks to your portfolio.

Adding income-producing stocks can produce a powerful savings tool for you. But before you make an investment decision, you need to do careful due diligence of the stocks you’re buying.

For example, you can find some top companies that operate in a kind of oligopoly where competition is limited, where the regulatory environment is very favourable for their growth, and that have a very established and diversified revenue base.

Today, I’ve put together a list of three high-yielding dividend stocks to give you an idea how you can start a portfolio that generates consistent retirement income.

Toronto-Dominion Bank

Canada’s Big Five banks have been very consistent in rewarding retirees through steadily growing dividends. From this group, I particularly like Toronto-Dominion Bank (TSX:TD)(NYSE:TD).  

The lender has an excellent payout policy, distributing between 40% and 50% of income in dividends each year. In addition, TD has a great diversification business with its wide presence in the U.S.

It generates about 30% of its net income from the U.S. retail operations. The bank also has a 42% ownership stake in TD Ameritrade with a fast-expanding credit card portfolio. Following its aggressive growth in the U.S. during the past decade, TD now runs more branches south of the border than it does in Canada.

TD stock now pays a $0.79-a-share quarterly dividend, which translates into a 5% yield on yearly basis. Due to the economic challenges after the pandemic, the bank may not continue with its 7-10% growth in its payout, but I don’t see the lender slashing its dividend, as it has a much better balance sheet than its peers. 

Brookfield Infrastructure

The Toronto-based Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) is another top stock to help boost your retirement income.

BIP owns and operates utilities, transport, energy, and communications infrastructure companies globally. BIP manages about US$30 billion portfolio with assets spanning five continents.

The company manages utilities and power transmission systems in North and South America, 37 ports in North America, the U.K., Australia, and Europe, approximately 3,800 kilometres of toll roads in South America and India, and large rail operations in Australia and South America.

All these assets are essential, making BIP a good candidate for any retirement income portfolio, especially when the economy is in a recession and revenues are under pressure.

Trading at $54.33 and with an annual dividend yield of about 5%, the stock currently offers an attractive entry point to retirees.  


North America’s largest pipeline operator, Enbridge (TSX:ENB)(NYSE:ENB), is one of your best bets to boost your retirement income in this low-rate environment.

The company operates across North America, fuelling the economy and fulfilling consumers’ energy needs. Enbridge moves nearly two-thirds of Canada’s crude oil exports to the U.S., transports about 20% of the natural gas consumed in the U.S., and operates North America’s third-largest natural gas utility by consumer count.

Enbridge is largely insulated from swings in commodity prices, as it sets prices for transporting oil and gas in long-term contracts. Its clients include some of Canada’s largest energy companies, including Imperial Oil and Suncor Energy, providing a source of dependable future cash. 

Enbridge, which currently yields about 7.8% a year, is offering quite an attractive risk/reward equation. Its current return is among the best you can earn from other Canadian utilities. Enbridge pays $0.81-a-share quarterly dividend.

Speaking of dividend stocks, here are our best picks for this month.

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

Fool contributor Haris Anwar owns Enbridge stock. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners.

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.