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Retire Early: 1 Canadian Dividend Stock to Buy and Hold

Early retirement handwritten in a note
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A July report from Royal Bank Economics predicted a surge in retirements in the second half of 2021. Many workers have been left in limbo over the course of the pandemic. This drove down the number of retirements after February 2020. The report said that this may have been due to uncertainty over their portfolios during the crisis. Today, I want to discuss how Canadian investors can look to achieve early retirement. Moreover, I want to look at one of my favourite dividend stocks to stash in a retirement portfolio. Let’s jump in.

How can Canadians achieve early retirement?

Yesterday, I’d discussed a worrying report that indicated most Canadian workers were unable to stash money away for retirement in 2020. To retire early, Canadians must look to invest early and often. Canadians who start young and exercise discipline will be ahead of the game. However, those who delay saving for retirement may find themselves in a tough spot later in their working life.

When it comes to early retirement, Canadians need to weigh their options carefully. This includes taking stock in factors like government benefits, your tax situation, as well as your motivation to continue to work.

Canadians who are set on retiring before the age of 65 should look to stash dependable stocks that offer a balance of growth and income. Fortunately, the TSX is rife with strong dividend stocks for your portfolio.

Here’s why this is one of my favourite dividend stocks for a retirement portfolio

Sun Life (TSX:SLF)(NYSE:SLF) is a Toronto-based company that provides insurance, wealth, and asset management solutions to a worldwide client base. Shares of this dividend stock have climbed 17% in the year-to-date period as of close on August 16. Those seeking early retirement should look to target Sun Life for its growth potential, income, and dependability.

All the way back in 2018, I’d discussed stocks that were geared for big growth due to burgeoning economies in Asia. Sun Life released its second-quarter 2021 results on August 4. Net income rose to $900 million compared to $519 million in the prior year. Meanwhile, reported earnings per share in the first six months of 2021 came in at $3.12 — more than doubling its EPS of $1.55 in the first six months of last year.

Insurance and wealth sales have both posted solid growth in the first six months of 2021. Better yet, it delivered underlying net income growth in its Canadian, United States, and Asia-based segments. Wealth sales shot up 64% in its Asia business. China has led the way in Asia, bouncing back strongly after being the first hit by the COVID-19 pandemic. Moreover, Canada and the United States have also enjoyed a rebound on the back of surging vaccination rates.

Shares of this dividend stock last had a favourable price-to-earnings ratio of 11. Sun Life last announced a quarterly dividend of $0.55 per share. That represents a 3.3% yield. This is a great option for investors looking to retire early.

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 Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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