The Passive-Income Portfolio for a Comfortable Retirement

Here are some stocks for retirees to consider, even during volatile times.

A comfortable retirement. That really is all that every investor wants to attain in the limited number of working years we have. Fortunately, the market provides a combination of well-diversified stocks to consider investing in. Here are some to consider, even during volatile times.

Income on autopilot

One of the main points about attaining that comfortable retirement portfolio is identifying some great passive-income candidates. After all, selecting investments that need to be constantly tweaked and re-allocated doesn’t exactly sound like passive income or make for a very comfortable retirement, does it?

That’s the idea behind selecting Bank of Montreal (TSX: BMO)(NYSE: BMO) as the first stock on your way to a comfortable retirement.

BMO is one of Canada’s big banks and has been paying a handsome dividend longer than any other Canadian stock on the market. Apart from its strong presence in Canada, BMO has expanded out to the U.S. market. In fact, BMO announced its latest acquisition in the U.S. last December in a deal to acquire Bank of the West.

Today, that dividend works out to a handsome 3.95% meaning that a $40,000 position will earn a passive income of $1,580. Factor in annual increases, reinvestments, as well as future growth potential, and that income will grow substantially.

An unlikely source of defensive income

At first glance, few people see railroads as viable long-term investments. Instead, most see a slow-moving freight relic from the last century. The reality is that railroads are superb investments for both income and growth.

Canadian National Railway (TSX: CNR)(NYSE: CNI) is the largest railroad in Canada. CN operates a coast-to-coast network that also stretches down the U.S. Midwest to the Gulf Coast. This makes the railroad the only one on the continent with access to three coastlines.

That access is key as the railroad hauls over $250 billion worth of goods each year between factories, warehouses, ports, and refineries. Those goods are well diversified, covering everything from automotive components and chemicals to crude oil, wheat, and raw materials.

In fact, the sheer necessity of the railroad makes it somewhat of an arterial vein of the entire North American economy. That appeal is elevated further by the defensive moat that comes from that massive network that connects every major metro area on the continent. Even the thought of a would-be competitor emerging to counter that supremacy would cost billions and decades of construction.

Turning to dividends, CN boasts a 1.95% yield. That may not be the highest yield on the market, but it is stable and growing. In fact, CN has provided consecutive annual upticks to that dividend going back over a decade.

A similar $40,000 investment allocated to CN will help attain a comfortable retirement with a first-year income of $780. Again, reinvestments, growth, and time will see that figure grow considerably.

Harness the power of renewables

Renewable energy stocks have grown in popularity over the past decade. They are no longer viewed as expensive, inefficient, and unnecessary. This makes the growing number of renewable energy stocks viable long-term investments to help get to a comfortable retirement.

That’s just one reason why TransAlta Renewables (TSX: RNW) is a stellar long-term option for any portfolio. TransAlta has a growing number of facilities located across Canada, the U.S., and Australia. The facilities also encompass different energy types, including natural gas, solar, wind, and hydro.

Keep in mind that renewable energy utilities adhere to the same lucrative business model that their traditional fossil fuel peers follow. The only difference is that unlike traditional utilities, renewable stocks like TransAlta need not worry about immense transitional capital costs.

TransAlta can instead focus on growth and paying out its generous dividend.

That dividend currently carries a yield of 5.27% and, unlike the other investments on this list, is paid out on a monthly cadence. This means that a $40,000 investment in TransAlta will provide an income of $175 each month.

Comfortable retirement is within reach

While every investment carries risk, attaining a comfortable retirement is possible. In my opinion, all of the stocks noted above represent unique opportunities for income and growth-seeking investors.

Buy one or all of them and watch your portfolio grow.

Fool contributor Demetris Afxentiou has positions in Canadian National Railway. The Motley Fool recommends Canadian National Railway.

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