5 Great RRSP Stocks to Buy and Hold

Find out why stocks such as CN Rail (TSX:CNR)(NYSE:CNI) can provide the right kind of wealth generation for a retirement investor.

| More on:
Target. Stand out from the crowd

Image source: Getty Images

Every investor has different financial needs and ambitions. And it’s no different when investing specifically for retirement. For instance, investors buying stocks for their retirement fall into two broad categories: younger investors looking ahead, and retirees who have already left work. Depending on which category an investor falls into, one’s financial horizons will call for different deliverables. Today, we will take a brief look at a few of the options.

Suitable stocks for long-term RRSP investors

CN Rail is a strong choice for the longer-range investor looking ahead to a comfortable retirement. The nation’s largest rail stock has proved time and again that it can take disruption in its stride. A 1.7% dividend yield will accumulate over the years or can be used to reinvest in more CN Rail shares. By gradually building a position in CN Rail, investors can put away a tidy nest egg for their later years.

Long-term investors may want to consider the Big Five banks. However, this asset type is strongly correlated with the economy. With a potential double-dip recession brewing, investors will have to decide which side of the fence they are on. In the near term, banks may find their fortunes deteriorating. In the long term, though, these pillars of the economy should provide years of passive income.

Investors looking to go long on banks should consider the large-cap, moderate-growth option. This would arguably be TD Bank, with its strong presence south of the border providing growth. Paying a decent 5.2% dividend yield, TD Bank is a prime of example of the classic “too-big-to-fail” business model. A core functioning part of the Canadian financials sector, TD Bank is one of the top stocks on the TSX.

Near-term gains in steady sectors for retirees

The shorter-term retirement investor may want to look for steeper gains over a tighter time frame. Investors can choose to pack growth stocks and/or stocks with rich yields. Stocks with steadily rising share prices include such names as Cargojet. Cargojet has seen its share price gain 78% in the last 12 months of trading. However, rich dividends such as those on offer from Enbridge (TSX:ENB)(NYSE:ENB) may appeal.

Enbridge pays a 7.4% dividend yield, which supports a rich-yield RRSP strategy. Investors seeking faster, richer passive income could consider buying shares in Brookfield Property Partners. This highly diversified real estate pick comes with a 12.3% dividend yield. Big swings in fortunes could be an issue for real estate, though, being highly exposed to the pandemic. Up 25% in three months, BPY is nevertheless negative by 38.7% since last August.

While the case for buying into the hydrocarbon industry is undeniably weaker than it was just a few years ago, Canada’s oil patch, and its pipeline network, are integral to the economy. Along with energy and banking, natural resource industries are among our strongest suits. However, a mid-streamer such as Enbridge is a reduced-exposure play that cuts out much of the risk facing individual fuel producers.

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 Victoria Hetherington has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway, CARGOJET INC., and Enbridge. The Motley Fool recommends Brookfield Property Partners LP and Canadian National Railway.

More on Dividend Stocks

thinking
Dividend Stocks

Should You Buy BCE Stock for its 8.6% Dividend Yield?

Down over 20% from all-time highs, BCE stock offers you a tasty dividend yield in 2024. But is the TSX…

Read more »

grow dividends
Dividend Stocks

How Long Would It Take to Turn $20,000 Into $100,000 With TSX Dividend Stocks?

Here's how high-quality TSX dividend stocks and the power of compound interest can help grow your investments by 400% or…

Read more »

Paper airplanes flying on blue sky with form of growing graph
Dividend Stocks

2 Soaring Stocks I’d Buy Now With No Hesitation

These two stocks may be the most expensive on the market, but they're high for a reason! And I'm still…

Read more »

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

Invest $374.50 Each Month to Create Passive Income of $288 in 2024

Investing a specific amount each month to create passive income this year is possible with monthly dividend payers.

Read more »

Happy retirement
Dividend Stocks

2 Stocks to Help Turn $100,000 Into $1 Million

If you want to reach $1 million, $100,000 can certainly get you there. Even if you invest in some low…

Read more »

warning or alert
Dividend Stocks

Income Alert: These Stocks Just Raised Their Dividends

There's no shortage of companies that raised their dividends recently. Here's a trio of options to consider buying now.

Read more »

Business success with growing, rising charts and businessman in background
Dividend Stocks

Don’t Look Now, But These 3 TSX Stocks Look Poised for a Nice Rally 

Three TSX stocks are in a downtrend amid headwinds. 2024 may be rocky for them, but they are poised for…

Read more »

protect, safe, trust
Dividend Stocks

3 Safe Dividend Stocks to Beat Inflation

These three dividend stocks are excellent buys to beat inflation, given their solid underlying businesses and high yields.

Read more »