How to Prepare for Retirement With These Top Canadian Dividend Stocks

Canadians can gear up for their retirement by snatching up highly dependable dividend stocks like Fortis Inc. (TSX:FTS).

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The baby boomer generation has started to steadily slip into retirement. In some cases, this may trigger the anxieties of younger demographic cohorts like Generation X or the Millennials. The decline of defined-benefit pension plans in the private sector means that many more investors will be on their own in shaping their retirement income.

Today, I want to look at three top Canadian dividend stocks that are a nice start for investors building a makeshift retirement portfolio. Let’s dive in.

This undervalued dividend stock is worth stashing for your retirement

Telus (TSX:T) is the first Canadian dividend stock I’d look to add to our hypothetical retirement portfolio today. This Vancouver-based company provides a range of telecommunications and information technology products and services in Canada. Its shares have dropped 8.3% month over month as of early afternoon trading on May 30. That has pushed the stock into negative territory so far in 2023.

This company released its first-quarter (Q1) fiscal 2023 earnings on May 4. Total mobile and fixed customer growth reached 163,000 — up 15,000 compared to the previous year. Meanwhile, operating revenues climbed 15% year over year to $4.92 billion. However, adjusted net income dipped 7% to $386 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 10% to $1.77 billion.

Shares of this dividend stock have dropped 8.2% over the past month. That has thrust Telus into the red in the year-to-date period.

Here’s a Canadian Dividend King that you can trust for the long haul

Fortis (TSX:FTS) is a St. John’s-based utility holding company. This dividend stock has dropped 4.1% month over month at the time of this writing. However, its shares are up 3.1% so far in 2023. Investors can see more of Fortis’s recent performance with the interactive price char below.

Investors gearing up for retirement should target dividend stocks that promise long-term stability. Fortis currently offers a quarterly dividend of $0.565 per share, which represents a 3.9% yield. This company has achieved 49 consecutive years of dividend growth. The stock is on the cusp of becoming the second Dividend King on the TSX. Moreover, Fortis’s aggressive capital-spending plan aims to expand its dividend-growth streak for several more years to come.

This dividend stock has dropped 4.1% over the past month. The stock is still up 3.1% so far in 2023. Retirement investors can feel good about owning this future Dividend King.

One more top dividend stock I’d add to a retirement portfolio

Empire Company (TSX:EMP.A) is the third dividend stock I’d target for retirement investors today. Grocery retailers have proven dependable in the first third of this decade. This Stellarton-based company is engaged in the food retail and related real estate businesses across Canada. Shares of this dividend stock have dropped 2.3% so far in 2023.

In Q2 fiscal 2023, earnings per share rose to $0.73 compared to $0.66 in Q2 fiscal 2022. The company announced that it would sell its retail fuel sites in Western Canada for $100 million. Shares of Empire currently possess a favourable price-to-earnings ratio of 13. Meanwhile, it offers a quarterly dividend of $0.165 per share, representing a modest 1.8% yield.

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.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Fortis and TELUS. The Motley Fool has a disclosure policy.

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