Retirees: Boost Your Passive Income With These 4 Safe Dividend Stocks

Given their strong fundamentals, excellent track records, and healthy dividend yields, these four Canadian dividend stocks could deliver stable passive income.

| More on:
Senior Man Sitting On Sofa At Home With Pet Labrador Dog

Image source: Getty Images

Retirees should plan to generate sufficient passive income to cover their expenses without a job. Meanwhile, investing in fundamentally strong dividend companies is one of the excellent means to earn passive income. Given retirees’ low-risk-taking abilities, here are four safe Canadian stocks that generate strong cash flows while paying dividends at healthier yields.

NorthWest Healthcare

First on my list would be NorthWest Healthcare Properties REIT (TSX:NWH.UN). The company generates stable cash flows, thanks to its highly defensive and diversified portfolio. Besides, the company’s inflation-indexed rents, government-backed tenants, and long-term agreements provide stability to its financials.

Meanwhile, NorthWest Healthcare is also focusing on acquiring new properties in Australia and Europe and has recently raised approximately $200 million through new equity offerings. It has planned to use the net proceeds to acquire the Australian Unity Healthcare Property Trust, which owns 62 medical facilities with a high occupancy rate of 98%.

So, these acquisitions could boost the company’s cash flows, allowing it to continue paying dividends at a healthier yield. Currently, the company’s forward dividend yield stands at an attractive 6.15%. So, I believe NorthWest Healthcare would be an excellent buy for retirees.

Canadian Utilities

Canadian Utilities (TSX:CU), a diversified energy infrastructure company, has raised its dividends for the last 49 consecutive years, the longest among Canadian public companies. The company earns most of its earnings from regulated assets and contractual agreements, delivering stable and predictable financials.

Supported by these stable cash flows, the company has raised its dividend consistently. Currently, its forward dividend yield stands at a healthy 4.95%.

Meanwhile, Canadian Utilities has planned to invest around $3.2 billion over the next three years, increasing its utility asset base. Further, the acquisition of Pioneer Natural Gas Pipeline in September 2020 could continue to boost its financials in the coming quarters. So, given its healthy growth prospects and stable cash flows, the company is well-equipped to continue raising its dividends.

BCE

BCE (TSX:BCE)(NYSE:BCE) is one of the three top players in the Canadian telecommunication space. Telecommunication companies, including BCE, generate stable cash flows irrespective of the economic environment due to the essential nature of their service in this digitally connected world. Besides, digitization and rising remote working and learning are driving the demand for fast and reliable internet services. So, the advent of 5G could be a significant growth driver for BCE.

Meanwhile, the company is investing aggressively in expanding its fiber, wireless home internet, and 5G networks, which could boost its financials in the coming years. Also, the company’s balance sheet looks strong, with its liquidity standing at $6.5 billion as of March 31. Besides, the company also pays quarterly dividends, with its forward dividend yield standing at 5.61%.

So, given the favourable environment, healthy growth prospects, strong liquidity position, and high yield, BCE would be an excellent buy for income-seeking investors.

Enbridge

My final pick would be Enbridge (TSX:ENB)(NYSE:ENB), which has been paying dividends uninterruptedly since 1953 while raising the same for the last 26 straight years at a compound annual growth rate (CAGR) of over 10%. Its 40 diverse revenue sources, regulated assets, and long-term contracts generate stable cash flows allowing the company to raise its dividends consistently.

Meanwhile, the company pays a quarterly dividend of $0.835, with its forward yield currently standing at 6.86%.

Further, the company has planned to invest around $17 billion over the next three years, expanding its midstream and renewable assets. These investments could further increase its adjusted EBITDA by $2 billion. So, the company is well-equipped to continue raising its dividends in the coming years.

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 owns shares of and recommends Enbridge. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

More on Dividend Stocks

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance
Dividend Stocks

Got $2,500? 2 Top Stocks That You Can Buy and Hold for a Lifetime

The market is full of opportunities, including these two stocks you can buy and hold forever.

Read more »

Supermarket aisle with empty green shopping cart
Dividend Stocks

1 Solid TSX Stock I’d Sink Every Cent I Can Into

Food inflation is soaring. Loblaw Companies is well-positioned for the inflation wave and recession.

Read more »

question marks written reminders tickets
Dividend Stocks

Better Buy: Telus Stock or TD Bank?

Telecom stocks and bank stocks still trade at discounted prices.

Read more »

Target. Stand out from the crowd
Dividend Stocks

3 No-Brainer Stocks to Buy in a Correction

These TSX stocks continue to be analyst recommendations that have strong futures and are essential to our daily lives. Oh,…

Read more »

Woman has an idea
Dividend Stocks

3 Undervalued TSX Giants That Smart Investors Should Load Up on

Buying robust and time-tested TSX giants when they are undervalued and holding them long term is an intelligent, wealth-building strategy.

Read more »

growing plant shoots on stacked coins
Dividend Stocks

2 Rock-Solid TSX Stocks to Build a Foundation of Wealth

These two TSX stocks can be excellent investments as foundations of a strong, wealth-building, self-directed portfolio.

Read more »

grow dividends
Dividend Stocks

Income-Seeking Investors: Build Wealth With 2 Top Canadian Dividend Stocks

Consider investing in Fortis stock and Scotiabank stock to lock in high-yielding shareholder dividends.

Read more »

Supermarket aisle with empty green shopping cart
Dividend Stocks

Better Buy: Loblaw Stock or Metro?

Risk-averse investors can seek safety in two prominent consumer staples stocks in a defensive sector in this inflationary, volatile market.

Read more »