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Retirees: 3 Top Canadian Income Stocks Yielding 4-5%

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Canadian retirees are searching for top, high-yield Canadian stocks that pay reliable dividends.


BCE (TSX:BCE)(NYSE:BCE) is Canada’s largest communications company with wireless and wireline networks that provide leading-edge mobile, internet, and TV services across the country. BCE also has a media division that includes a TV network, specialty channels, a streaming service, radio stations and interests in sports teams.

The recent decision by the CRTC to walk back planned cuts on the wholesale internet prices BCE and its peers charge competitors will save BCE millions of dollars. As a result, BCE just announced a $500 million increase to its capital plan.

BCE is building out its 5G network and continues to expand its fibre-to-the-premises initiative. Mobile and internet subscribers are consuming more content every year, and that should lead to higher revenue. BCE also has an opportunity to bundle new security services for its millions of existing customers.

The business generates adequate free cash flow to cover the generous dividend. At the time of writing, the stock trades near $61 per share and provides a 5.73% dividend yield. It wouldn’t be a surprise to see BCE regain the $65 mark by the end of the year.

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Emera (TSX:EMA) is a Canadian utility with $31 billion in assets in Canada, the United States, and the Caribbean. The company has a $7.4 billion capital program in place through 2023 and is evaluating another potential $1.2 billion in opportunities. Management sees the rate base expanding by 7.5-8.5% over the next two year. This should boost revenue and cash flow enough to support annual dividend increases of 4-5%.

Emera reported a strong start to the year. Adjusted net income for Q1 2021 came in at $243 million compared to $193 million in the same period last year.

The stock is a good pick for investors who want a defensive play that offers stable income and tends to hold up well when the broader market goes through a correction. Investors who buy Emera now can pick up a 4.5% yield.

Power Corp

Power Corp (TSX:POW) is a holding company with interests primarily focused on insurance and wealth management. The portfolio includes several of Canada’s leading players including publicly traded Great-West Lifeco and IGM Financial, which are home to brands such as Canada Life and Investors Group.

Through the subsidiaries, Power Corp is also a majority owner of fintech disruptor Wealthsimple. Power Corp is also a player in the emerging electric vehicle segment through its alternative investment group. The division has a large position in Quebec-based Lion Electric, a manufacturer of electric school busses and other commercial vehicles.

Power Corp receives a stream of dividends from its holdings and passes along a good chunk of the profits to its shareholders. At the time of writing, investors can pick up a 4.5% dividend yield.

The share price has moved higher in recent months due to rising equity markets and the realization that the sum of the parts might be worth much more than Power Corp’s market capitalization.

The bottom line

With GICs only paying about 1% these days, retirees need to find other options for their savings. BCE, Emera, and Power Corp are all top-quality Canadian dividend stocks that provide solid distributions for an income-focused portfolio.

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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.

The Motley Fool recommends EMERA INCORPORATED. Fool contributor Andrew Walker owns shares of BCE, Emera, and Power Corp.

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