These 3 Stocks Can Help Make You Richer by Retirement

Future retirees can be rich in their sunset years with the help of three distinguished dividend-payers on the TSX.

| More on:
retirees and finances

Image source: Getty Images

Many retirees hold positions in dividend stocks because pensions alone won’t guarantee financial security in the sunset years. The usual frequency of payouts is quarterly, although some companies pay dividends every month. Since retirement planning is a long-term goal, investors should add TSX stocks suitable for a retiree’s portfolio.

If you’re years away from retirement, you have a crack at building a substantial nest egg. The Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM), Manulife Financial (TSX:MFC)(NYSE:MFC), and TC Energy (TSX:TRP)(NYSE:TRP) may be considered retirement stocks. All three are established dividend-payers. More importantly, they can help you retire richer with their generous quarterly dividends.

Solid play

CIBC isn’t the largest bank (fifth-largest) in Canada but it packs a mean dividend track record. The $55.3 billion lender started paying dividends in 1868 and continues to do so in the 21st century. At $62.28 per share, you have a solid play in your journey to retirement. The 5.39% dividend yield is the second-highest among the Big Five banks.

Banks could experience earnings drops in the near term due to a potential recession or economic downturn, but CIBC can endure such a scenario. Because the bank stock is down 12.3% year to date, it’s the perfect time to take a position. The bounce back is certain and there should be no issue on dividend safety whatsoever.

Stable despite market volatilities

Manulife Financial also trades at a slight discount (-1.35% year to date), but displays resiliency amid the strong headwinds. The $43.3 billion multinational company has been in the insurance business since 1887 and still stands strong today. At $22.83 per share, the dividend yield is a hefty 6.09%. A nice income stream to consider adding to your retirement planning.

In the first half of 2022, net income attributable to shareholders increased 18.3% year over year to $4 billion despite market volatilities. According to its CEO, Roy Gori, Manulife’s goal is to get half of its profit from Asia by 2025. He adds that the region is the most promising growth driver in the quarters to come.

Dividend growth stock

TC Energy is a solid performer in 2022, notwithstanding the tough market. This year has been favourable to the $59.4 billion pipeline operator due to elevated crude prices. The current share price is $58.74 (+4.06 year to date), while the dividend yield is a fantastic 6.22%. Since our topic is building retirement wealth, a dividend growth stock like TC Energy is a logical choice.

The energy stock has earned dividend aristocrat status for increasing its dividends for 21 consecutive years. According to management, it has an industry-leading secured capital program worth $28 billion in place. TC Energy will sanction approximately $5 billion of projects per year throughout the decade.

Earnings should be visible, while cash flow growth is certain because the secured capital projects are covered by long-term take-or-pay contracts or underregulated business models. In October, management announced the Saddlebrook solar project. Apart from being TC Energy’s first utility-scale project, the $146 million project (81 MW capacity) will be Canada’s first solar power farm.  

Simple advice for retirement planning

The advice of most financial planners to future retirees is simple, “Start saving early and take advantage of the power of compounding.” If time is on your side and you desire to retire rich, use your savings to purchase the best retirement stocks.  

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. The Motley Fool has a disclosure policy.

More on Energy Stocks

Red siren flashing
Energy Stocks

Buy Alert: 4 Reasons Why TC Energy Stock Is a Must-Own Now

A large-cap energy stock is a strong buy today for four compelling reasons.

Read more »

Oil pipes in an oil field
Energy Stocks

Here’s Why Enbridge Stock Looks Like a Great Buy

Consider looking at Enbridge (TSX:ENB) if you seek high-yielding but safe dividends for your self-directed portfolio.

Read more »

oil and natural gas
Energy Stocks

3 Energy Stocks Already Worth Your While

TSX energy stocks could shine for much longer. Here's why Canadian Natural Resources (TSX:CNQ), Parex Resources (TSX:PXT), and another oil…

Read more »

Utility, wind power
Energy Stocks

Brookfield Renewable Partners Stock: Buy, Sell, or Hold?

BEP stock (TSX:BEP.UN) now trades at half its share price back in 2021. So what should investors do with this…

Read more »

Energy Stocks

2 No-Brainer Energy Stocks to Buy With $5000 Right Now

Cenovus Energy is one of two high quality energy stocks that are undervalued and well-positioned for long-term success.

Read more »

Gas pipelines
Energy Stocks

Here’s Why Enbridge Is a No-Brainer Dividend Stock

Enbridge stock has resilient operations, significant competitive advantages and a safe payout ratio, making it a top dividend stock.

Read more »

Solar panels and windmills
Energy Stocks

Buy 849 Shares of This Super Dividend Stock for $3,100/Year in Passive Income

Looking for a super dividend stock to buy now? Here's a discounted top pick that can provide an ample income…

Read more »

Oil pumps against sunset
Energy Stocks

Suncor Stock: A Millionaire Maker?

With a renewed focus on extracting value from its integrated business, we can expect tremendous value creation from Suncor stock.

Read more »