Those nearing retirement and looking for top-notch reliable dividend growing stocks have come to the right place.
In this article, I’m going to highlight my top two income-generating investments on the TSX right now. These stocks fit well in an RRSP, and allow retirees to create their own supplemental pension/income stream.
TD Bank
Out of all the big Canadian banks, I think Toronto-Dominion Bank (TSX:TD)(NYSE:TD) has the best mix of income, safety, and growth.
Accordingly, TD is the perfect stock to combat this potential pitfall. The company’s dividend yield of 4.4% is nothing to slouch at. However, TD has also more than doubled its dividend over the past ten years. Dividend growth is just as important as a stock’s current yield. Indeed, I’d say it’s more important for retirees and those looking to retire soon. Knowing that one’s income can keep pace with inflation (small as it may seem) is important.
TD’s growth profile and durable competitive advantage make this a safer stock in my view than its peers right now. I think TD has excellent high-quality international exposure. Furthermore, continued investments in technological advancements have improved TD’s operating efficiency, and likely will continue to do so, over the long term.
WPT Industrial REIT
Alternative investments like Real Estate Investment Trusts (REITs) have been a favorite for income-oriented investors since they came into being. These REITs typically pay out the vast majority of their earnings to unit holders on a frequent basis.
In the REIT space, WPT Industrial REIT (TSX:WIR.U) is among my favourite picks in Canada. This REIT owns a diversified portfolio of high-quality industrial real estate. These properties are mainly warehouses and distribution centers. Indeed, a rather unglamorous business at first glance.
However, when one considers the absolutely impressive growth we’ve seen in e-commerce, the growth thesis here becomes clear. Industrial real estate close to city centres can only become more valuable over time, because there’s simply not enough supply to meet the burgeoning demand. Packages need to get shipped, and the number of packages shipped is not going to stop increasing. Industrial areas close to city centres are often rezoned to produce more residential housing, particularly in cities with a supply/demand issue causing high housing prices.
These factors make the portfolio held by WPT ultra-desirable for long-term investors. A dividend yield 4.9% that is well-covered makes this company’s distribution growth potential high. Indeed, a payout ratio of only 32% suggests there’s an incredible amount of room for distribution increases over time. This is truly a bond-like dividend producing equity. I would highly encourage those looking for consistent income to check out WPT before this stock takes off.
