2 Stocks to Help You Retire Early

Canadians can increase their chances of retiring early by investing in two blue-chip stocks that are established wealth builders.

| More on:
Early retirement handwritten in a note

Image source: Getty Images

Dividend investing is a proven way to build retirement wealth. If time is on your side and finances allow, it’s also the best avenue to help you retire early, or before the traditional age of 65. All you need are less-volatile, dependable dividend stocks to achieve your objective.

A perfect combo for future retirees is Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) and TC Energy (TSX:TRP)(NYSE:TRP). Both companies have outstanding dividend track records. Play smart by using the dividends to accumulate more shares. You’ll amass a fortune over time through the power of compounding.

Growth opportunities ahead

CIBC endured the global pandemic and will continue to flourish notwithstanding an extended health crisis. Because of strong fundamentals and sound risk-management practices, Canada’s fifth-largest bank ended fiscal 2021 (year ended October 2021) up.

The $66.5 billion bank reported net income and adjusted net income increases of 68.42% and 52.27% versus fiscal 2020. CIBC president and CEO Victor Dodig said, “We delivered strong financial performance in 2021 with growth across all of our strategic business units.” He added that with a strong capital position, the bank is well positioned for growth.

According to management, the launching of a new logo in September 2021 symbolizes the opportunities that lies ahead. The rebranding was due to the expanded platform across North America. CIBC will focus on meeting the needs and expectations of clients on both sides of the border.

This year, CIBC should attract ESG investors after it announced a new $100 million key climate tech and energy transition funds. Harry Culham, Group Head at CIBC Capital Markets, said, “With new and intensifying environmental challenges, we believe our bank has an important role to play in supporting the acceleration of climate action.”

Cullham added, “These investments are another way we’re driving growth into new areas of the economy while helping to foster long-term sustainability.” Performance-wise, CIBC rewarded investors with a total return of 41.52% in 2021. The share price is $147.45, while the dividend yield is 4.37% if you invest today.

Multiple growth platforms

TC Energy didn’t disappoint income investors in 2021. Besides the 20.33% overall return, the energy stock raised its dividend, as it has every year since 2000. At $58.83 per share, the dividend yield is a mouth-watering 5.92%. The dividend payouts should grow, given the $22 billion secured capital program and billion-dollar investments in various growth projects.

Management committed to focus on managing and reducing greenhouse gas emissions by building constructive, enduring relationships. TC Energy has established strategic partnerships with Irving Oil (joint development of energy projects) and Nikola Corporation (large-scale hydrogen production hubs).

Furthermore, management’s other plans include modernizing existing systems & assets, decarbonizing its energy consumption, and driving digital solutions and technologies. The compelling reasons to invest in TC Energy are diversified, high-quality assets, multiple growth platforms, and visible dividend growth.

TC Energy’s portfolio of complementary infrastructure assets and $22 billion of secured growth projects should support annual dividend growth of 3-5%, says management.

Early retirement is possible

Blue-chip stocks like TC Energy and CIBC are established wealth builders. Investing in the pair could improve your chances of retiring 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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Dividend Stocks

money cash dividends
Dividend Stocks

This 8.39% Dividend Stock Can Pay $100 Cash Every Month

Consider investing in this monthly dividend stock at current levels to lock in high-yielding monthly distributions to create a good…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

Here’s the Average TFSA Balance in 2024

The Bank of Montreal (TSX:BMO) says that the average TFSA balance is $41,510, far below the maximum.

Read more »

A glass jar resting on its side with Canadian banknotes and change inside.
Dividend Stocks

Investors: Here’s How to Make $1,000 Each Month in Retirement

Here's how you can easily make $1,000 in monthly passive income in retirement in Canada, without taking on too much…

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer TSX Stocks I’d Buy Right Now Without Hesitation

Three TSX stocks that continue to overcome massive headwinds and beat the market are no-brainer buys right now.

Read more »

calculate and analyze stock
Dividend Stocks

TFSA Investors: 2 Top TSX Dividend Stocks to Buy on a Dip and Hold Forever

These top TSX dividend stocks now offer attractive yields and big potential capital gains.

Read more »

grow money, wealth build
Dividend Stocks

1 Dividend Stock to Buy for Growth and Stay for a 5.5% Yield

This dividend stock has been rising higher, but more could certainly be on the way. Now is the time to…

Read more »

A worker uses a double monitor computer screen in an office.
Dividend Stocks

2 Affordable Passive-Income Stocks That Pay Monthly

Are you looking for some passive-income stocks to build a recurring income stream? Here are two great options you can…

Read more »

woman data analyze
Dividend Stocks

Magna International Is Starting to Get Ridiculously Oversold

An undervalued stock with strong fundamentals and visible growth potential is a screaming buy for long-term gains.

Read more »