3 High-Dividend Stocks to Buy Today for Early Retirement

Canadians with early retirement goals can buy three high-dividend stocks today and hold them in tax-advantaged savings accounts.

| More on:
Early retirement handwritten in a note

Image source: Getty Images

Early retirement is a pipedream for most people except for a few who can leave the workplace on or before 60 years old. The hurdle in retirement is being financially comfortable for the rest of your sunset years. Canadians have a good chance of making it a reality through tax-advantaged savings accounts.

The Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA) are excellent tools for building retirement wealth or a substantial nest egg. Most RRSP and TFSA investors prefer to hold dividend stocks not so much for capital gains but for reliable passive income streams.

High-dividend stocks are available on the TSX for those with early retirement goals. Furthermore, you can invest in three dividend aristocrats of different sizes, or market values, today.   

Small-cap

Exco Technologies Limited (TSX:XTC) in the auto parts industry has raised its dividends for 17 consecutive years. This $301.5 million company is a designer, developer, and manufacturer of automotive interior trim components and assemblies. The products are primarily for passenger and light truck vehicles.

XTC trades at $7.75 per share and pays a quarterly dividend; the current dividend yield is 5.3%. Management reported impressive results for Q1 fiscal 2023. Its President and CEO, Darren Kirk, said, “Exco’s results showed strong improvement as automotive industry supply constraints continue to ease.”

In the quarter that ended December 31, 2022, consolidated sales and net income rose 37.7% and 66.7% to $139.1 million and $4.5 million, respectively, versus Q1 fiscal 2022. Kirk adds, “While global macro conditions are certainly slowing, we believe our various capital investment and margin enhancement activities will enable our results to continue to improve through the balance of the year.”

Mid-cap

Capital Power (TSX:CPX) in the utility sector is a defensive asset. The $4.9 billion growth-oriented wholesale power producer focuses on sustainable energy. It owns and operates high-quality, utility-scale generation facilities, including renewables and thermal.

CPX has a dividend growth streak of nine years, and at $41.48 per share, you can partake in the 5.61% dividend yield. In 2022, the company’s net cash flows from operating activities reached a record $935 million. Revenues and net income increased 25.3% and 47.1% year over year to $28.5 billion and $128 million, respectively.

Its President and CEO, Brian Vaasjo, said, “Our growth outlook remains excellent given political support for renewable energy both in the United States and Canada.” Management anticipates potential uprates, expansion, and contract extensions for its three natural gas facilities in Ontario.

Large-cap

BCE (TSX:BCE) is a no-brainer buy-and-hold 5G stock. You get value-for-money ($59.17 per share) from this cash cow that pays a mouth-watering 6.44% dividend. The $55.4 billion telecommunications company started paying dividends in 1881 and has raised them for 14 straight years.

While net earnings in Q4 2022 dipped 13.8% to $567 million versus Q4 2021, free cash flow jumped 64.2% year over year to $376 million. The highlight in 2022 was the record 854,000 new direct fibre connections, resulting from BCE’s accelerated capital expenditure program.

Save and invest early

High-dividend stocks held in an RRSP or TFSA can help Canadians retire early because of tax-free money growth. Remember, though, successful early retirees started saving and investing while they were young.

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 positions in and recommends Exco Technologies. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Target. Stand out from the crowd
Dividend Stocks

1 Dividend Stock Down 30% to Buy Right Now

Keyera is an energy infrastructure company that pays shareholders a forward yield of almost 6%. Is KEY stock a good…

Read more »

oil and natural gas
Dividend Stocks

Suncor Stock Is Rallying: Should You Invest?

Energy stocks like Suncor Energy Inc (TSX:SU) are rising with oil pries.

Read more »

A worker gives a business presentation.
Dividend Stocks

TSX Communications in April 2024: The Best Stocks to Buy Right Now

Here are two of the best TSX communication stocks you can buy in April 2024 and hold for years to…

Read more »

Man considering whether to sell or buy
Dividend Stocks

Royal Bank of Canada Stock: Buy, Sell, or Hold?

Royal Bank of Canada (TSX:RY) has a high dividend yield. Should you buy it?

Read more »

Businessman looking at a red arrow crashing through the floor
Dividend Stocks

BCE’s Stock Price Has Fallen to its 10-Year Low of $44: How Low Can it Go?

BCE stock price has dipped 39% in two years and shows no signs of growth in the next few months.…

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

Invest $10,000 in This Dividend Stock for $3,974.80 in Passive Income

This dividend stock gives you far more passive income than just from dividends alone, so consider it if you want…

Read more »

Payday ringed on a calendar
Dividend Stocks

This 6% Dividend Stock Pays Cash Every Month

Can a 6% dividend yield help you build a monthly retirement income? An investment made right can help you build…

Read more »

Payday ringed on a calendar
Dividend Stocks

Passive Income: How Much Should You Invest to Earn $1,000 Every Month?

These three monthly-paying dividend stocks can help you earn a monthly passive income of $1,000.

Read more »