Retirees: 2 Stocks for Stable Passive Income

Gildan Activewear (TSX:GIL) and another passive-income stock are fit for a retiree’s dividend portfolio.

Retirees are likely feeling a bit rattled by the past two weeks of volatility. Still, now is not the time to panic-sell over some bearish headline you spotted or a talking head on TV who thinks a double-digit percentage drop is on the horizon.

At the end of the day, nobody can predict markets in the near term. Even if the markets turn, there’s a great incentive to consider stable passive-income stocks, given yields tend to rise when share prices fall, provided you’re not punching your ticket to a dividend cutter.

Here we go again! Hot U.S. inflation rattles investors

It was a strong start to the year for the TSX Index and S&P 500, but things are starting to get jittery again, with fears of inflation, once again, troubling investors and causing some to throw in the towel. Undoubtedly, the higher-than-expected January PCE (Personal Consumption Expenditures) numbers in the U.S. applied even more selling pressure to the broader market averages. Indeed, the hot PCE shouldn’t have come as too much of a surprise, given last week’s hot consumer price index.

Just when you thought that inflation was ready to cool down rapidly, a hotter-than-expected number comes up, derailing some of the “Fed pivot” stances that many optimistic investors may have held onto. For retired investors, now is not the time to panic-sell, even if you’re worried that the year-to-date gains could be wiped out.

Sticking with TSX stocks for passive income and value

Like it or not, the TSX Index ended Friday in the green, while the tech-heavy Nasdaq 100 fell just north of 1.7%. Canadian markets remain the place to be if you’re looking for value and are looking to avoid the riskiest parts of the market. Tech and growth stocks led the charge lower again, as fears of higher rates pick up once again.

Indeed, Mr. Market is doing what he does best: overreacting to news events, even those that should have come as no surprise. The real question moving forward is whether January’s U.S. inflation is the start of another inflation surge. It’s hard to tell if disinflationary forces will pick up in February. Regardless, Tax-Free Savings Account (TFSA) investors need to set their sights on the longer term, while using the big swoons caused by Mr. Market’s overreaction to put some money to work in opportunities.

Gildan Activewear

Gildan Activewear (TSX: GIL) is a maker of generic articles of clothing. The company also happens to be an overlooked value play with a sizeable dividend yield. The stock trades at 10.7 times trailing price to earnings (P/E), with a 2.4% dividend yield. The company is also fresh off a challenging fourth quarter that saw sales sink 8%. Regardless, the firm shed light on a retail program that should help it power forward in future quarters.

Though Gildan isn’t an exciting play, I think its low costs of production (in normalized environments) versus rivals is a source of a moat. At these depths, I’d look to be a buyer if you seek deep value and steady passive income.

KP Tissue

KP Tissue (TSX: KPT) is a consumer paper products firm that’s gone virtually nowhere over the last few years. The stock’s sitting on support at $10 and change per share. With a juicy 7% dividend yield and a low 0.56 beta (less correlated to the market), retirees may wish to give the passive-income heavyweight the benefit of the doubt.

Sure, toilet paper and tissues aren’t exciting. But they are necessary products that can help power your portfolio’s income-generating capabilities.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends Gildan Activewear. The Motley Fool has a disclosure policy.

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