Reliable and high-yield dividend-paying stocks are a great source to boost retirement income. Thankfully, the TSX has several fundamentally strong dividend-paying stocks that offer lucrative yields, making them attractive investments to supplement your retirement income.
With this backdrop, I’ll focus on three Canadian stocks with attractive and well-covered yields and resilient businesses to support higher dividend payments in the coming years.
TC Energy
With a history of consistently growing its dividend for over two decades and a high yield of 6.63%, TC Energy (TSX:TRP) is an outstanding stock to boost your retirement income. TC Energy transports oil and gas, and, to be precise, it has increased its dividend for 23 consecutive years at a CAGR (compound annual growth rate) of 7%.
TC Energy’s high-quality portfolio of regulated and contracted assets witnesses high utilization rates and delivers resilient cash flows to support higher payouts. Further, its utility-like business model, $34 billion secured growth projects to expand its regulated and contracted assets base, and energy transition opportunities augur well for future dividend payment and growth.
Thanks to its resilient business and growing cash flows, TC Energy expects to increase its dividend by 3-5% per annum in the coming years. This implies that retirees can expect a growing dividend income each year.
Enbridge
Like TC Energy, Enbridge (TSX:ENB) also transports oil and gas. Furthermore, it has a stellar history of dividend payment and growth. Enbridge has been paying dividend for more than 68 years. Meanwhile, Enbridge’s dividend has grown at a CAGR of 10% (the highest growth rate among its peers) in the last 28 years.
This energy giant offers a quarterly payout of $0.887 a share, which translates into an attractive dividend yield of 6.69%.
Enbridge’s highly diversified income sources (about 40), ongoing investments in conventional and renewable energy assets, contractual arrangements to minimize price and volume risks, and inflation-protected earnings position it well to drive its distributable cash flows and dividend payments. Furthermore, its multi-billion-dollar secured capital program, along with embedded revenue escalators, bodes well for growth.
As Enbridge generates resilient cash flows, its target payout ratio of 60-70% of its distributable cash flows is sustainable in the long term.
SmartCentres Real Estate Investment Trust
REITs, or real estate investment trusts, are known for their higher payouts, making them an attractive investment to maximize your retirement income. While REITs offer solid income, the credit tightening and rising interest rates have weighed on their financials and stock price. Nonetheless, investors can focus on REITs with a stable tenant base and high occupancy. This way, one can earn a high yield and reduce risk.
One such attractive investment is SmartCentres Real Estate Investment Trust (TSX:SRU.UN) in the REIT space. This fully integrated REIT offers monthly payouts, has a solid tenant base with recession-proof businesses, and a best-in-class portfolio of strategically located income-producing assets.
About 60% of its rents are collected from tenants that are essential service providers like top retailers and banks. Furthermore, its properties have a high occupancy rate of about 98%. This adds stability to its cash flows. Also, SmartCentres’s debt is of fixed rate, protecting it against rising interest rates. Near the current levels, SmartCentres offers a lucrative yield of over 7%.
