Back in May, I’d discussed why retirees should look to add some extra security in their portfolios during a market rally. The COVID-19 pandemic has ushered in massive societal and economic changes. Job losses and changes of circumstances have undoubtedly accelerated or shifted the retirement plans for many Canadians.
A recent report from Edward Jones stated that millions of Canadians were rethinking their retirement timing due to the COVID-19 pandemic. Nearly one in 10 pre-retirement adults are considering early retirement. However, one-third believe that they will now need to retire later because of financial concerns.
Today, I want to look at two TSX stocks that are perfect for retirees in the final weeks of August. These stocks offer stability, a chance at capital growth, and attractive income. This is desirable in any portfolio, but especially for retirees or those nearing retirement.
Why this TSX stock is perfect for retirees
In July, I’d recommended a green energy-focused portfolio for millennial investors. This is also a solid strategy for retirees. Renewable energy assets grew significantly in the 2010s, and that will continue this decade. Investors in the public and private sphere are pushing hard to accelerate the green energy revolution.
Polaris Infrastructure (TSX:PIF) is a renewable energy company that acquires, explores for, develops, and operates geothermal and hydroelectric projects in Latin America. Its shares have climbed 24% in 2020 as of close on August 14. The company released its second quarter 2020 results on August 6.
In the year-to-date period, production in MWh rose to 347,949 compared to 283,738 in the first six months of 2019. Adjusted EBITDA has increased to $32 million over $30 million in the year-to-date period in the previous year. Retirees on the hunt for value should target Polaris as it boasts a favourable price-to-earnings ratio of 8.5 and a price-to-book value of 0.8. It last declared a quarterly dividend of $0.15 per share, which represents a strong 5.4% yield.
Don’t sleep on this energy beast in 2020 and beyond
Enbridge (TSX:ENB)(NYSE:ENB) is the largest energy infrastructure company in North America. Canada’s energy sector has faced challenges due to the COVID-19 pandemic. However, Enbridge is an energy giant that retirees can trust for the long term.
Shares of Enbridge have dropped 10% in 2020 as of close on August 14. However, the stock is still up 7% from the prior year. In Q2 2020, the company revealed that its net income dropped 40% to $1.65 billion primarily due to lower crude oil prices.
These were caused by cratering demand in response to the COVID-19 pandemic and the damaging OPEC price war. Fortunately, Enbridge reaffirmed its cash flow guidance for 2020 and predicted a gradual recovery in demand as the North American economy reopened.
In July, Enbridge declared a quarterly dividend of $0.81 per share, which represents a tasty 7.4% yield. Its positive cash flow should make retirees feel at ease who are relying on its dividend payout. Better yet, Enbridge has delivered dividend-growth for 24 consecutive years.
On the topic of stocks that retirees can snag right now . . .
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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. The Motley Fool owns shares of and recommends Enbridge and Polaris Infrastructure Inc.