2 Top Dividend Stocks for Retirees

Retirees can still find great dividend stocks at reasonable prices. Here’s why these two deserve to be on your income buy list.

| More on:
retirees and finances

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Canadian pensioners can’t get enough interest on GICs to keep up with inflation. As a result, many retirees are turning to top dividend stocks for their retirement portfolios.

Fortis

Fortis (TSX:FTS)(NYSE:FTS) raised its dividend in each of the past 47 years and intends to boost the payout by at least 6% per year through 2025. That’s a great track record and strong guidance for income investors who need to get reliable and growing distributions from their investments.

Fortis has a $19.6 billion capital program on the go that will drive the revenue and cash flow growth needed to support the dividend increases. In the past, Fortis has also made large acquisitions, and that trend could continue in the next few years as the North American utility sector consolidates.

The stock trades at a reasonable price and provides a 3.5% dividend yield at the time of writing.

A $10,000 investment in Fortis 25 years ago would be worth $200,000 today with the dividends reinvested, so the stock is also an attractive pick for younger investors.

BCE

BCE (TSX:BCE)(NYSE:BCE) has been a top pick for retirees for decades and that should continue to be the case, even if the business looks a lot different than it did 30 years ago.

The company is Canada’s largest communications firm providing mobile, internet, and TV services across its wireless and wireline networks. BCE also owns a large media division it built up through a series of acquisitions and investments over the past decade. These include a TV network, specialty channels, radio stations, and sports franchises. BCE also owns retail locations and advertising businesses.

When you put all the bits together, BCE is a dominant force that has the potential to connect with most Canadians on a regular basis. In fact, every time a person in Canada makes a call, sends a text, checks e-mail, streams a movie, listens to the weather report, or watches the news, the odds are pretty good that BCE is involved somewhere along the line.

That’s a powerful business.

The stock still trades below its pre-pandemic level. Investors who buy the shares today can pick up a solid 5.75% dividend yield and should see the payout increase at a steady pace in the coming years.

The recent CRTC decision to abandon planned cuts to wholesale internet rates is good news for BCE and its investors. The company expanded its capital program after the announcement knowing it can invest in new infrastructure and get paid a reasonable return when selling broadband space to smaller competitors.

BCE continues to roll out its fibre optic lines and is ramping up the expansion of its 5G network.

Once people start traveling again BCE should see lucrative roaming fees rebound. In addition, Canadian sports fans will likely fill stadiums and arenas again next year. This will drive a revenue recovery for BCE’s sports franchises.

The bottom line on top dividend stocks

Fortis and BCE are top Canadian dividend stocks that pay attractive and growing dividends. If you are searching for stocks to add to a retirement income portfolio these companies deserve to be on your radar 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.

The Motley Fool recommends FORTIS INC. Fool contributor Andrew Walker owns shares of BCE and Fortis.

More on Dividend Stocks

edit Back view of hugging couple standing with real estate agent in front of house for sale
Dividend Stocks

Why Real Estate Stocks Are a No-Brainer Addition to Your Portfolio

Real estate stocks, especially REITs, offer some distinct advantages over other types of stocks, making them must-have additions to most…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Top TSX Dividend Stocks to Buy for Monthly Passive Income

Top TSX stocks with monthly dividends now trade at cheap prices for investors seeking passive income.

Read more »

Canadian Dollars
Dividend Stocks

Create Free Passive Income and Turn it Into Thousands With 1 TSX Stock

If you can't afford to invest, you can certainly create passive income another way and use that to invest in…

Read more »

Payday ringed on a calendar
Dividend Stocks

Canadian Dividend Investors: 2 ETFs That Pay Monthly Income With High Yields

Dividend ETFs often pay out monthly distributions compared to dividend stocks.

Read more »

think thought consider
Dividend Stocks

2 Stocks I Own and Will Buy More of if They Fall

Stocks tend to go up in the long run. Therefore, buying a basket of diversified stocks on dips should lead…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Oversold TSX Dividend Stocks to Buy for Passive Income

Blue-chip dividend stocks such as Royal Bank of Canada and Manulife Financial pay investors a tasty forward yield.

Read more »

TFSA and coins
Dividend Stocks

TFSA Passive Income: 3 Solid Stocks to Earn $355 Every Month

Looking to earn steady passive income? Here are three solid TSX stocks that can help you earn a worry-free passive…

Read more »

Technology
Dividend Stocks

RRSP Investors: 2 Stocks to Buy in August for Dividends and Capital Gains

RRSP investors can still find top TSX dividend stocks trading at cheap prices today for a buy-and-hold portfolio.

Read more »