Canadians: 3 Easy Stocks to Invest for Retirement

Utility stocks like Algonquin Power & Utilities Corp (TSX:AQN)(NYSE:AQN) are staples of retirement portfolios.

| More on:
Path to retirement

Image source: Getty Images

If you’re investing for your retirement, chances are, you’ve heard about dividend stocks. Perhaps you own some already, either directly or through index funds. Dividend stocks are very popular with retirees, because they transfer some of their profits to their shareholders. Unlike with stocks, that don’t pay dividends, dividend stocks let you profit without selling. So, you can live off of them without drawing down your savings.

In this article, I will explore three dividend stocks that can help you invest for retirement.

Algonquin Power & Utilities

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) is a Canadian utility company that specializes in renewable energy. “Utility” refers to the sector that produces things like electricity and tap water. These companies are heavily regulated by the government, which makes the industry very hard to enter. That tends to result in utility companies being monopolies or near monopolies. All utility companies enjoy this benefit, but AQN has an extra advantage: it’s focused on wind and solar power.

Wind and solar power are renewable energy sources that governments are trying to encourage in order to fight climate change. Whereas coal-based utilities are vulnerable to carbon taxes or even being phased out entirely, renewable utilities often enjoy special help from the government (e.g., subsidies). As a result, they have a big advantage when it comes to long term growth. AQN lets you get a piece of this government-approved revenue, with a 5.6% dividend yield.

Royal Bank of Canada

Royal Bank of Canada (TSX:RY)(NYSE:RY) is a Canadian bank stock that has a 4.15% yield. It has paid a dividend for more than 100 consecutive years! Not many companies can boast that kind of dividend track record, but it’s not hard to see how Royal Bank pulled it off. Canada’s banking sector is heavily regulated, which leaves little room for small upstarts to enter the industry. The result is a very stable industry that deliveries “slow and steady growth.”

That’s not to say that Canada’s banks are necessarily “slow-moving” companies. Over the last half-decade, Royal Bank has grown its earnings per share (EPS) by 8.4% per year, which is faster than the inflation rate. So, when you buy Royal Bank of Canada at a fair price, you’re buying a company that has given investors positive real returns.


Apple (NASDAQ:AAPL) is one of the world’s most proven, entrenched, and profitable technology companies. The company has over 1.5 billion people using its hardware worldwide, and it’s always adding more. Apple’s revenue only grew at 2% in the last quarter, but it could ramp up in the future. The iPhone is gaining in popularity. Recent studies showed that 87% of Gen Z members had an iPhone, 88% wanted one for their next phone, and that 50% of China’s high-end smartphone market was made up of iPhones.

Today, Apple’s dividend yield is only 0.61%. That might seem low, but remember that this company has been raising its dividend by about 8.5% per year on average. If you buy today, your “yield on cost” (dividends divided by purchase price) could rise.

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 Andrew Button has no position in any of the stocks mentioned. The Motley Fool recommends Apple. The Motley Fool has a disclosure policy.

More on Investing

Arrowings ascending on a chalkboard

I Think They Can: 3 Stocks That Can Keep Chugging Higher

CN Rail (TSX:CNR) and other transport plays have what it takes to chug even higher from here!

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

Better Buy: Dollarama Stock or Alimentation Couche-Tard?

Take a closer look at these two defensive retail stocks to determine which might be a better holding to protect…

Read more »

Growing plant shoots on coins
Dividend Stocks

TFSA Dividend Stocks: How You Can Earn $400 Per Month of Growing Passive Income

Here's how you can buy top Canadian dividend stocks in your TFSA to build a rapidly and consistently growing passive-income…

Read more »

top TSX stocks to buy
Dividend Stocks

GICs vs. Dividend Stocks: Where to Invest for Passive Income in 2024?

Income-seeking investors can consider holding instruments such as GICs and dividend stocks to create a recurring revenue stream.

Read more »

Dollar symbol and Canadian flag on keyboard

If You Don’t Own This Canadian Stalwart Stock, You’re Missing Some Serious Stability

Here's why Royal Bank of Canada (TSX:RY) remains a stalwart long-term investors have done well to make a core holding.

Read more »

Payday ringed on a calendar
Dividend Stocks

Got $10,000 to Invest? How to Turn it Into Monthly Income

Canadians can produce recurring monthly income streams from a $10,000 investment in two high-yield real estate stocks.

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

How to Build a Bulletproof Dividend Portfolio Starting With Just $10,000

Want to earn a growing stream of dividend income? Here's how to invest $10,000 for a great combination of income…

Read more »

Wireless technology
Tech Stocks

Got $5,000? 2 Tech Stocks to Buy and Hold for the Long Term

Here are the best tech stocks to buy, with one offering long-term growth and the other offering strong business as…

Read more »