Dividend Stocks for Canadians: A Smart Way to Invest for Retirement

TD Bank (TSX:TD) stock looks like a banking bargain for dividend-hungry investors seeking to invest for retirement!

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It’s hard out there, especially for Canadian investors who are readying up for their retirement years. In many ways, it seems like the goalposts keep moving for retirement, with high inflation and volatility hitting the stock and bond markets. With a recession closing in and layoffs spreading through tech and other industries, retirement dates are bound to be pushed out a bit.

As a retiree, it’s ultimately your call to make. After one of the worst years for the stock-and-bond portfolio, retirement may have gone from a realistic possibility to something that’s starting to get out of reach. Indeed, the recent wave of market turbulence has been a test of discipline and patience. If you’re a relatively young investor who’s more than 10-15 years away from your expected retirement date, though, the good news is that you need not worry yourself about the recent wave of turbulence.

The younger you are, the better your ability to roll with the punches. And you shouldn’t let the latest slate of worries stop you from making the moves to achieve your long-term investment goals. If anything, added market volatility is a good thing for you, provided you’re able to spot the opportunities that come your way.

If you spot a moment of market inefficiency that allows you to buy a stock at a big discount on intrinsic value, you should be ready to swing your bat. Otherwise, you may miss a chance to beef-up and not weaken your investing trajectory.

In this piece, we’ll look at one dividend stock for Canadians to consider stashing in a retirement fund amid the latest wave of volatility.

TD Bank

Here we go again. TD Bank (TSX:TD) got slipped again, thanks to new troubles facing regional banks south of the border. TD’s Charles Schwab exposure is, once again, a pretty sore spot for the well-run Canadian banking behemoth. Undoubtedly, TD should have sold its stake in Schwab a while ago. Of course, hindsight is 20/20. Looking ahead, things look quite rocky for the bank, at least through the eyes of the many short-sellers betting against the banking heavyweight.

I think the shorts will be in for a squeeze, as the U.S. regional bank crisis comes to an end, while TD weighs its options with its proposed takeover of First Horizons. Yes, First Horizons was under added pressure on Tuesday, slipping more than 7.5% on a hectic day for the small bank stocks. Still, First Horizons is no First Republic (an ailing bank that recently got scooped up). And though TD still desires to buy First Horizons, I’d argue that every troubled day for regionals is a good day for TD.


The lower the regionals sag, the likelier TD Bank will be able to get a better agreed-upon price. Indeed, dragging out the deal to wait and see how things unfold could work out heavily in TD shareholders’ favour. Having options is always a good thing. Though walking away from a deal could entail hefty fees, I think that the odds are good that TD winds up getting a good value for money at the end of the day.

The bottom line for retirees

When the market punches come your way, be ready to dodge, weave, and return some shots of your own. In the context of investing, that means being ready to swing your bat when you see the time as right. At this juncture, I view TD Bank as a great bank to buy at a discount while U.S. regional jitters hit it.

These jitters won’t last forever. U.S. exposure could command a hefty premium again once the regional bank crisis winds up in the rearview mirror. For now, TD trades at a mere 9.8 times trailing price-to-earnings alongside a 4.7% dividend yield. TD is still the same robust bank it was back in the glory days of 2021. It’s just facing a new slate of headwinds that, I believe, are overblown by the shorts who may be in for a squeeze if the U.S. regional crisis is in the latter innings.

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.

Charles Schwab is an advertising partner of The Ascent, a Motley Fool company. Fool contributor Joey Frenette has positions in Toronto-Dominion Bank. The Motley Fool recommends Charles Schwab. The Motley Fool has a disclosure policy.

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