Retirees: How You Can Earn $705 a Month in Dividends With Less Than $100K in Savings

Dividend investing is a popular strategy among retirees for several reasons. While investing in dividend stocks, you typically gain exposure to a portfolio of profitable companies that allow you to create a recurring stream of passive income. Moreover, investors also benefit from capital gains over the long term.

In 2023, investors have the opportunity to buy several cheap dividend stocks trading on the TSX due to a volatile stock market. A difficult macro environment has driven shares of companies across sectors significantly lower, raising their dividend yields in the process.

Here are three such TSX dividend stocks retirees can consider buying right now to create a passive-income stream.

Enbridge stock

Enbridge (TSX:ENB) is part of the energy sector, which is highly cyclical. However, its robust business model allows Enbridge to generate cash flows across market cycles. In fact, the TSX energy giant has increased dividends each year for 28 consecutive years.

Since the start of 1995, ENB stock has returned a whopping 4,760% to shareholders after adjusting for dividends. It still pays shareholders annual dividends of $3.55 per share, translating to a forward yield of 6.7%.

Over 95% of Enbridge’s cash flows are tied to long-term contracts that are indexed to inflation, making the company almost immune to fluctuations in commodity prices. Further, it continues to invest in capital expenditures, which is a key driver of future cash flows and dividends.

With a payout ratio of less than 70%, ENB stock is on track to increase dividends at a consistent pace in 2023 and beyond.

Slate Grocery REIT stock

A company that offers you diversification to the real estate sector, Slate Grocery REIT (TSX:SGR.UN) primarily invests in grocery-anchored properties south of the border. These properties are occupied by high-quality tenants, allowing Slate Grocery to pay shareholders annual dividends of $1.17 per share, indicating a forward yield of 8.7%.

The REIT went public in April 2014 and has since returned 117% to investors in dividend-adjusted gains. Comparatively, the TSX index has 97% in this period.

Slate Grocery ended 2022 with more than $2 billion worth of properties, up from $1.6 billion in 2021. Due to its widening base of cash-generating assets, Slate Grocery increased rental revenue from $138.27 million in 2021 to $177.48 million in 2022. Its net income also increased from $87.4 million to $139 million in this period.

Fiera Capital

A TSX stock that currently yields a tasty 11.3%, Fiera Capital (TSX:FSZ) is a Canada-based asset management company. It generates revenue from performance fees and management fees, which are, in turn, tied to its assets under management or AUM.

During bear markets, the AUM of asset managers moves lower, as investors shift capital towards low-risk assets, including bonds and gold. The ongoing bear market has dragged shares of Fiera Capital lower by 50%, allowing you to buy the dip.

In addition to its dividend yield, FSZ stock is also priced at a discount of 22% to consensus price target estimates.

The Foolish takeaway

Investing a total of $95,000 distributed equally in the four TSX stocks will help you earn $8,455 in annual dividend income, indicating a monthly payout of $705. If these dividend payouts increase by 7% annually, your dividend income will double in the next 10 years.