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Retirees: Top Stocks to Keep You Wealthy

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The COVID-19 pandemic has potentially pushed back retirement for many Canadians in 2020. This past weekend, fellow contributor Amy Legate-Wolfe argued that Canadians should hold off until 2021 to retire. Uncertainty abounds in the current environment. Even those who have already entered retirement are facing some difficult decisions. Today, I want to look at three stocks that can be part of a perfect portfolio for retirees. I’m looking for a combination of stability, steady income, and value.

Retirees: Why you should hold on tight to this renewable energy stock

Renewables experienced impressive growth over the course of the 2010s. Experts anticipate that this sector will enhance its overall share of power generation in this decade as well. While green energy stocks are a great hold for the future, many of these stocks also provide attractive income.

TransAlta Renewables is one of my favourite stocks in this space. The company develops, owns, and operates renewable power generation facilities. Its stock has climbed 10% in 2020 as of close on September 25.

In Q2 2020, the company delivered comparable EBITDA growth of 4% from the prior year to $115 million. Adjusted funds from operations (AFFO) increased 13% to $90 million. Retirees should feel good about its solid balance sheet and adequate growth potential. It last paid out a monthly dividend of $0.078 per share. This represents a strong 5.7% yield.

This healthcare REIT is well worth owning right now

All eyes have been on the healthcare sector in 2020 — and with good reason. Real estate investment trusts are an interesting option for retirees who are on the hunt for income. One of my favourite REITs is NorthWest Healthcare REIT (TSX:NWH.UN). This REIT provides investors exposure to a well-diversified portfolio of healthcare real estate in Canada and around the world.

Shares of NorthWest Healthcare have been mostly static in 2020. However, the stock has climbed 7% over the past three months. In the second quarter of 2020, the REIT reported net operating income of $69.9 million. Its portfolio occupancy rate also remained stable at 97.3%. Meanwhile, NorthWest acquired a portfolio of four hospitals located in Greater London, England in the quarter. The acquisition was worth $454 million.

NorthWest Healthcare stock last possessed a price-to-earnings ratio of 13 and a price-to-book value of 1.3. This puts the stock in attractive value territory. Better yet, retirees can gobble up its monthly dividend of $0.067 per share, which represents a tasty 7.1% yield.

Why retirees should target this top insurance stock

Manulife Financial is one of the largest insurance and financial services companies in Canada. Shares of Manulife have plunged 27% so far this year. The stock has been mostly flat over the past three months.

The COVID-19 pandemic has posed major challenges for insurers. However, the future still looks bright for Manulife. Retirees should be happy with its very favourable P/E ratio of 9.4 and P/B value of 0.7. It last paid out a quarterly dividend of $0.28 per share, which represents an attractive 6.1% 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. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.

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