3 Top Canadian Dividend Stocks for Retirement Income

These top dividend stocks offer high yields and reliable payouts for retirees seeking investment income.

| More on:
retirees and finances

Image source: Getty Images

Canadian pensioners are searching for ways to boost returns on their savings. GIC rates don’t even cover inflation these days so retirees are increasingly turning to dividend stocks to boost retirement income.

Emera

Emera (TSX:EMA) is a Canadian utility with assets located in Canada, the United States, and the Caribbean. The businesses include electric and natural gas utilities that primarily operate in regulated environments. That means revenue and cash flow tend to be predictable and reliable.

Emera reported Q2 2021 adjusted net income of $137 million or $0.54 per share compared to $118 million or $0.48 per share in the same period last year.

Emera is working on $7.4 billion in capital projects through 2023 with an additional $1.2 billion under consideration over that timeframe. The result should be rate base growth of 7.5-8.5% over the next two years. The board plans to raise the dividend by at least 4% through the end of 2022.

Low borrowing costs help Emera fund the capital program. The low-rate environment also makes utility stocks more attractive for investors.

Emera’s share price is up about 10% this year, but the stock still looks attractive. Investors who buy now can pick up a solid 4.3% dividend yield.

BCE

BCE (TSX:BCE)(NYSE:BCE) is a leader in the Canadian communications sector with wireless and wireline network infrastructure that provides customers with mobile, internet, and TV services.

The firm also has a media division that holds a TV network, specialty channels, radio stations, and positions in sports teams. Second-quarter results indicate the media group is seeing a rebound in advertising spending and that should continue as pandemic restrictions ease.

BCE is investing billions of dollars to expands its fibre network and rollout 5G services. These initiatives help protect the company’s competitive position while opening up opportunities for new revenue streams.

The stock recently moved higher on solid Q2 2021 results and more upside should be on the way. BCE generates adequate free cash flow to support the generous dividend. At the time of writing, investors can get a 5.5% dividend yield.

Manulife

Manulife (TSX:MFC)(NYSE:MFC) has insurance, wealth management, and asset management operations in Canada, the United States, and Asia. The American business operates under the John Hancock brand.

The stock is a great way for investors to get good exposure to growth opportunities in Asia through a top Canadian financial company. Manulife reported strong Q2 2021 results. Core earnings came in at $1.7 billion, representing an increase of 18% over the same period last year.

The company is making good progress in its efforts to shift business to its digital platforms. This is driving down expenses while improving customer experiences. Manulife’s expense efficiency ratio in Q2 2021 was 46.8%, which is a 2% improvement over Q2 2020 and comfortably below management’s 50% target.

The stock trades near $25.50 at the time of writing. That’s down from the 2021 high of around $27, so investors have a chance to buy Manulife’s shares on a dip. The current dividend provides a 4.4% yield.

The bottom line

Retirees should feel comfortable owning Emera, BCE, and Manulife at their current prices. The stocks pay attractive dividends and should deliver decent growth 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 recommends EMERA INCORPORATED. Fool contributor Andrew Walker owns shares of BCE and Emera.

More on Dividend Stocks

Woman has an idea
Dividend Stocks

3 No-Brainer Best Dividend Stocks in Canada to Buy With $500 Right Now

Are you craving more cash flow? $500 in one of these best dividend stocks in Canada might deliver a slice…

Read more »

Canadian energy stocks are rising with oil prices
Dividend Stocks

5 Stocks Whose Dividends Just Keep Growing

Stocks like Enbridge and Fortis are growing their dividends for decades, and returning higher cash to their shareholders.

Read more »

Dividend Stocks

2 Stocks I’m Loading Up On in 2024

Restaurant Brands International (TSX:QSR) and another stock I'm pretty close to buying right here, right now.

Read more »

protect, safe, trust
Dividend Stocks

RRSP Investors: 2 Superior Dividend Stocks for Optimal Returns

Superior dividend stocks like the Canadian National Railway (TSX:CNR) can add income power to your portfolio.

Read more »

Increasing yield
Dividend Stocks

TFSA Passive Income: 2 High-Yield Stocks to Buy Before They Bounce

These top TSX dividend-growth stocks look cheap today and offer high yields.

Read more »

Portrait of woman having fun in the street.
Dividend Stocks

Why I Can’t Stop Buying Shares of This Magnificent High-Yield Dividend Stock in My TFSA

This dividend stock continues to be a top winner, even with returns falling the last few years. We're nearing some…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Investors: 1 Cheap Dividend Stock That Could Soar in 2025

This dividend-growth stock now trades at a discounted price and offers a 7% yield.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Dividend Stocks

1 Dividend Stock Down 13% to Buy Right Now

Are you looking for a buy-the-dip opportunity? This dividend stock is down 13% and is a buy right now before…

Read more »