2 Excellent Stocks to Hold in Your Retirement Portfolio

Canadian seniors will have less financial worry if the core holdings in their retirement portfolios are two excellent dividend stocks.

| More on:
Retirement plan

Image source: Getty Images

Canadians were already worried about inflation before the global pandemic. The results of the Canadian Imperial Bank of Commerce survey in late 2020 showed that inflation is the greatest financial concern in 2021 of 60% of the poll respondents.

Today, retirees, or those in the retirement age, are doubly anxious about the financial risk in an extended inflationary period. In the 2021 Global Retirement Index released by Natixis Investment Managers, one in four Canadians say it’s going to take a miracle to retire financially secure.

For seniors with retirement portfolios, revisit your strategies. If rising inflation threatens financial security, consider making Toronto Dominion Bank (TSX:TD)(NYSE:TD) and Pembina Pipeline (TSX:PPL)(NYSE:PBA) your anchors.

Strong foundation

Now is the perfect time to own shares of Canada’s second-largest bank. The TD Bank Group announced a 13% dividend increase after reporting its Q4 and fiscal 2021 (year ended October 31, 2021) earnings results. Its Group President, Bharat Masrani, said, “In 2021, we demonstrated the value of our diversified business model, delivering continued growth and shareholder returns.”

The full-year profit of the $172.63 billion bank rose 20.2% to $14.29 billion compared to fiscal 2020. Notably, TD’s American business delivered the highest percentage increase (66%) in net income for Q4 fiscal 2021 versus the same period in the prior year.

Because of its robust capital position, diversified businesses, and growing customer base, Masrani says TD has a solid foundation to continue building its business in fiscal 2022. Remember, too, the bank stock’s dividend track record is 164 years. Thus, the 3.74% dividend should be safe. TD currently trades at $94.75 per share.

Monthly income streams

Pembina Pipeline’s vision is to be the leader in delivering integrated infrastructure solutions. The $20.66 billion pipeline operator likewise takes concrete steps to reduce its environmental footprint. Its current share price of $37.55 is still a good entry point despite the +32.5% year-to-date gain.

The energy stock pays monthly dividends, not quarterly, besides the attractive dividend yield (6.69%). You can incorporate the payouts into your monthly budget or keep reinvesting the dividends for faster compounding. Moreover, your overall return should be higher because the stock price could still appreciate as crude prices rise.

Pembina’s growth catalysts include the Peace Pipeline expansions and the fully contracted Alliance Pipeline. The orderly expansion of the Peace Pipeline system will accommodate the volume growth in the NEBC Montney, and it will also address the increasing customer demand for services.

Regarding the Alliance Pipeline, shippers desire longer-term capacity. Thus, the average contract length is four years, beginning November 1, 2022, after Pembina’s successful contractual renewal efforts. Pembina’s partnership with the Haisla Nation to develop Canada’s largest First Nation-owned infrastructure project is progressing well too. The project will utilize renewable power as its primary energy source,

According to management, it has a continued sense of optimism going into 2022. Pembina expects its energy-producing customers to generate significant discretionary cash flows. The results should be improved execution capabilities, better overall credit profiles, and balance sheet strength.

Calm your worries

The situation today requires drastic measures and well-calculated investment moves. TD and Pembina Pipeline are excellent choices for retirees consumed with financial worries.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends PEMBINA PIPELINE CORPORATION.

More on Bank Stocks