Retirees: 2 Top Dividend Stocks to Buy for Lifelong Passive Income

Retirees can benefit from the growth in these two dividend stocks in the last month or so to take on significant passive income for decades.

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The pullback in the S&P/TSX Composite Index is well behind Motley Fool investors. A strong earnings season sent shares climbing again and again, up over 5% in the last month as of writing. The economy seems to be in full recovery, with more good news likely from the holiday season approaching. However, that doesn’t mean there aren’t strong dividend stocks to buy.

In fact, there are several strong stocks to consider during this time – and not simply from the dividend yield or from strong growth. Instead, it’s from these quality dividend stocks moving in a solid positive direction for retirees.

If you have a Tax-Free Savings Account (TFSA) dividend stocks are the perfect option to set you up for long-term growth. You can create wealth now and see it through to retirement. Or take it out sooner, tax-free! So let’s dig into two dividends stocks I would consider based on recent movement.

BCE: The market share holder

Now there are some who argue that TELUS is the telecommunications company to beat right now, and I can see why. The company has rolled out 5G and wireline at a strong rate. However, BCE (TSX:BCE)(NYSE:BCE) remains the best in my books. That’s because it holds 60% of the Canadian market. And it’s currently rolling out 5G and fibre-to-the-home as well.

When that revenue hits, that’s consistent, growing, recurring revenue that won’t create any more significant costs for the company. In fact, it reduces them! Yet investors are missing the bigger picture. The recent earnings report fell in line with analyst estimates, rather than beating them. Yet it remained confident of reaching full-year guidance. This sent shares lower, creating a great opportunity for long-term Motley Fool investors.

Shares in BCE stock are up 15% year to date, trading at a P/E ratio of 19.3. It boasts a solid dividend yield of 5.53% as of writing. That’s $1,111 annually from a $20,000 investment.

Suncor: The dividend’s back!

Suncor Energy (TSX:SU)(NYSE:SU) is Canada’s largest fully integrated energy producer. Yet it’s had a tough year, slashing its dividend in half back in February 2020. However, that dividend is now back, doubling it during Suncor stock’s latest earnings report.

This shows Motley Fool investors that the passive income they hoped for is now supported. Dividend stocks don’t like to slash dividends, but this company had to during turbulent times. But the recent earnings report shows it’s back on track and finding clean energy solutions to bolster long-term revenue to boot.

Shares of Suncor stock are up 43% year to date, yet it still trades at a P/E ratio of 20.75. Further, it supports a new dividend yield of 5.10%! That’s an annual passive income of $1,018 from a $20,000 investment.

Foolish takeaway

BCE stock and Suncor stock are two solid dividend stocks that Motley Fool investors can hold for decades on the TSX today. Retirees seeking passive income in retirement can add these to their TFSA and generate income without the tax implications of other retirement funds.

Every penny counts when you retire, so make sure your savings are solid. That comes not just from actively adding savings, but actively investing. Seeking help from your financial advisor is always a good idea, so discuss whether these options are right for you.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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