Retirees: 2 Top TSX Dividend Stocks to Buy Now for a 6% Yield

These two top TSX dividend stocks deserve to be on your income buy list. Here’s why.

| More on:

Image source: Getty Images

Canadian pensioners need to get the best yield possible out of their savings without taking on too much risk. GIC rates don’t even cover inflation these days, so many retirees are buying top dividend stocks to increase returns.

Best dividend stocks for retirees

The best stocks to own tend to be industry leaders that have histories of providing investors with growing dividends supported by higher revenue and profits. These companies can certainly see their share prices drop, but the stocks normally recover, and investors can use the dips to add new shares to the portfolio.

Let’s take a look at two top TSX dividend stocks that should be solid buys for a self-directed income fund today.


BCE (TSX:BCE)(NYSE:BCE) has a long tradition of being a top pick among pensioners. The company looks a lot different now than it did in the old days when wireline phone services provided the majority of the income and profits. Today, BCE is as much a technology and media company as it is a standard communications provider.

Management has done a good job in the past decade of keeping up with the changing times and technological advancements. BCE offers mobile packages ranging from high-cost postpaid corporate services to cheaper pre-paid plans. The company continues to invest in fibre-optic network upgrades to protect its competitive moat in the wireline internet market and recently spent $2 billion on new spectrum to support the expansion of its 5G network.

The Canadian government appears to have shifted focus away from BCE and its peers. High mobile rates didn’t even come up in the election campaign. Resilience of the Canadian internet and communications infrastructure through the pandemic might have helped deflect pressures to force lower fees.

In May of 2021, the CRTC cancelled plans to cut wholesale internet rates. That gives BCE a better picture of its future revenue stream and is bonus for investors.

BCE trades near $65 per share at the time of writing compared to the 2021 high of $67. Investors who buy the stock today can pick up a solid 5.4% yield. The company generates strong free cash flow to support the payout and steady dividend hikes should continue in the coming years.


Enbridge (TSX:ENB)(NYSE:ENB) trades near $50 per share right now compared to $56 before the pandemic. Investors who buy the stock at the current price can pick up a solid 6.6% dividend yield.

Last year, the company took a hit on its oil pipeline operations, as the drop in fuel demand resulted in lower throughput running from producers to refineries and other customers. Now that travel restrictions are easing and companies are planning to bring workers back to the office, demand for fuel is set to soar. Airlines are ramping up capacity, and commuters are getting their vehicles ready to hit the highways again in the coming months.

All this bodes well for Enbridge’s oil pipeline operations. Meanwhile, the natural gas transmission, storage, and utility businesses, along with the renewable energy facilities performed well last year and helped Enbridge meet its distributable cash flow (DCF) goals. As a result, the board felt comfortable raising the dividend late last year for the 2021 payouts. This put to bed any concerns that Enbridge might be forced to trim the distribution.

Ongoing dividend increases should be in line with anticipated DCF gains of 5-7%. Enbridge expects to put $10 billion in new assets into service in 2021 and has the financial clout to make strategic acquisitions to boost growth. In fact, Enbridge recently announced a US$3 billion purchase in the United States.

The bottom line

BCE and Enbridge are industry leaders with great track records of dividend growth. The stocks appear attractive right now and offer above-average dividend yields for income investors. A new investment split between the two stocks would provide an average yield of 6% 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 owns shares of and recommends Enbridge. Fool contributor Andrew Walker owns share of BCE and Enbridge.

More on Dividend Stocks

A bull and bear face off.
Dividend Stocks

The 3 TSX Stocks to Buy Before a Long-Term Bull Market Begins to Build

The TSX may not go bullish for a while, even when the economy recovers from a recession, but investors should…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

TFSA Investors: Make $200 in Monthly Passive Income With This 1 TSX Dividend Stock

Here’s an attractive dividend stock TFSA investors can buy now to earn $200 in monthly passive income.

Read more »

A plant grows from coins.
Dividend Stocks

TFSA Investors: How to Create $40,000 in Returns and Passive Income in 30 Years

If you think you'll need just $40,000 in passive income per year in retirement, your TFSA can get you there…

Read more »

stock analysis
Dividend Stocks

Buy These TSX Dividend Shares Next Week

Are you looking for dividend stocks to add to your portfolio? Buy these picks next week!

Read more »

edit Safety First illustration
Dividend Stocks

3 of the Safest Dividend Stocks in Canada

These three dividend stocks are all high-quality companies with defensive operations, making them some of the safest investments in Canada.

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

3 Stocks to Anchor Your Portfolio in a Rocky Market

Three stocks are solid anchors in any portfolio today for their outperformance in a weak market and defiance of the…

Read more »

money cash dividends
Dividend Stocks

3 Solid Dividend Stocks That Cost Less Than $30

Given their solid financials and healthy cash flows, the following under-$30 dividend stocks are a good buy in this volatile…

Read more »

grow money, wealth build
Dividend Stocks

2 High-Yield Dividend Stocks With Rock-Solid Payout Ratios

These two dividend stocks offer unbelievably high yields of more than 7% and earn more than enough free cash flow…

Read more »