The Motley Fool

RRSP Pension: Create Your Own CPP-Like Income Stream with These 2 Top TSX Stocks!

Image source: Getty Images

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.

Like these top picks? You'll probably like these 10 picks even more!

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!

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 Chris MacDonald has no position in any of the stocks mentioned.

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.