Are you a retiree looking for quality stocks that you can buy at reasonable prices?
If so, you’ve picked a good time to go shopping.
Canadian markets have delivered lukewarm returns this year, in contrast to U.S. markets, which quickly got overheated due to tech stock euphoria. As a result, you can now buy Canadian banks and energy stocks at some of the highest yields observed in recent memory. In this article, I will explore three Canadian dividend stocks that would be worthy additions to any Canadian retiree’s portfolio.
Royal Bank of Canada
The Royal Bank of Canada (TSX:RY) is Canada’s biggest bank by market cap. It has over $1 trillion in client assets and counting. The bank has branches all across Canada, as well as investment banking operations in the U.S., and wealth management in the U.S. and Caribbean.
Royal Bank’s most recent quarterly earnings release was pretty strong. The company beat analysts’ estimates on revenue and earnings, and delivered positive revenue growth.
One exciting thing happening with Royal Bank right now is the buyout of HSBC Canada. The deal is worth $13.5 billion and could add $1 billion a year or more in earnings power to Royal Bank. The deal appears to be going smoothly so far, so investors will have a lot to look forward to in the months ahead.
The Canadian National Railway (TSX:CNR) is Canada’s biggest transportation company. It’s a railway company that ships over $250 billion worth of goods each and every year. North America’s only transcontinental railway primarily ships goods from Canada to the U.S. via rail. It also has a truck fleet to help it reach areas that its rail track doesn’t touch.
CN Railway’s most recent earnings release was quite strong. The company beat analysts’ estimates on revenue and earnings, delivering positive growth in both metrics. Company management also signalled optimism for continued growth in the year ahead. On the whole, CNR stock is a worthy addition to any Canadian retiree’s portfolio.
Brookfield Asset Management
Brookfield Asset Management (TSX:BAM) is a Canadian asset management company that manages assets for its clients. It mostly offers private funds to wealthy clients; you can’t buy BAM’s funds on the stock markets like you can exchange traded funds. BAM’s exclusivity is a selling point to wealthy investors, who like the idea of getting in on deals not everybody has access to.
One of the best things about BAM as a company is its asset-light business model. Unlike its parent company, Brookfield Asset Management does not hold assets directly on its balance sheet. Instead, it holds them on its clients’ behalf and collects fees in exchange for doing so. This business model tends to result in low costs and high profit margins for BAM, which is one of the most profitable companies in Canada going by margins.
If you’re retired, dividends are the name of the game. With a good portfolio of dividend stocks, you can bring in consistent income whether the markets go up, down, or sideways. Not all dividend stocks are great, but the ones mentioned in this article should perform reasonably well over time.