In January 2023, Royal Bank analyzed a report that revealed Canadians’ savings stood at $350 billion as of the end of the third quarter of 2022. That means that, on average, Canadians have been able to grow their savings since the COVID-19 pandemic. This is an impressive feat considering the pressure put on consumers from soaring inflation and the subsequent push for higher interest rates from the Bank of Canada (BoC).
Today, I want to zero in on two stocks that savers might want to consider snatching up to prepare for retirement. Let’s jump in.
Why this super utility stock is perfect for a retirement portfolio in 2023
Hydro One (TSX: H) is based in Toronto and operates as an electricity transmission and distribution company in its home province of Ontario. Indeed, it boasts a utility monopoly in the country’s most populous province, making it a quality target for investors. Shares of this top utility stock have increased 6.4% month over month as of early afternoon trading on April 19. The stock is now up 8% in the year-to-date period.
This company released its fourth-quarter (Q4) and full-year fiscal 2022 earnings on February 14, 2023. In Q4 2022, Hydro One delivered earnings per share (EPS) growth of 11% to $0.30. Meanwhile, EPS for the full year climbed 8.7% to $1.75 over $1.61 for the full year in fiscal 2021. Hydro One achieved solid EPS growth on the back of higher approved rates for its transmission and distribution segments. The company reported total revenues of $7.78 billion compared to $7.22 billion in the prior year. Moreover, net cash from operating activities climbed to $2.26 billion over $2.14 billion in fiscal 2021.
Shares of Hydro one last had a solid price-to-earnings (P/E) ratio of 22. The stock offers a quarterly dividend of $0.28 per share at the time of this writing. That represents a 2.8% yield. Hydro One has delivered dividend growth every year since its public listing. This should pique the interest of investors looking to retirement.
Here’s another top stock that can help bolster your nest egg
Suncor Energy (TSX: SU) is a Calgary-based integrated energy company that operates in Canada and around the world. Investors looking for candidates in their retirement portfolio should not exclude Suncor because of its oil and gas roots. On the contrary, the company’s business has the potential to hold strong for many decades down the line. Shares of this top energy stock have climbed marginally so far in 2023.
The company posted adjusted funds from operations (AFFO) of $4.18 billion, or $3.11 per common share, in Q4 2022 — up from $3.14 billion, or $2.17 per common share, in the previous year. It saw production grow to 688,100 barrels per day (bbls/d) in Q4 2022 compared to 665,900 in Q4 of fiscal 2021. For the full year, Suncor achieved adjusted operating earnings of $11.5 billion compared to $3.80 billion in the prior year.
Suncor stock currently possesses an attractive P/E ratio of 6.3. Better yet, it offers a quarterly dividend of $0.52 per share, which represents a strong 5% yield. This is a great target for a retirement portfolio in 2023.
