Planning for Retirement? Here Are the Best Canadian Dividend Stocks to Buy

Buying two of the best Canadian dividend stocks now for the long term can help you retire without financial worries.

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Everyone wants to spend their post-retirement life without financial worries. But to achieve that goal, you should ideally start planning for your retirement as early as possible. If you have anywhere between 20 and 30 years before retirement, you still have the opportunity to start investing in the stock market and see your wealth multiply over the long term.

However, when investing in the stock market for retirement planning, make sure that you’re not taking unnecessary risks and investing all your hard-earned savings in some fundamentally weak penny stocks with expectations to be super rich overnight. Instead, it could be safer to pick some financially strong large-cap stocks that reward their investors with healthy dividends even in difficult economic environments. These dividends can act as a reliable source of passive income for you after you’ve retired.

In this article, I’ll talk about two such large-cap Canadian dividend stocks you can buy now and hold for years to come.

Bank of Nova Scotia stock

Whether you’re investing for retirement planning or trying to create a reliable source of extra income from dividends to meet your financial needs, Bank of Nova Scotia (TSX:BNS) could prove to be a great Canadian dividend stock to add to your portfolio. It’s currently the fourth-largest Canadian bank based on its market cap of $78.1 billion, as its stock trades at $65.57 per share with a minor 1.2% year-to-date decline. BNS stock offers an attractive 6.5% annualized dividend yield at this market price.

Scotiabank’s long-term financial growth trends look impressive, as its revenue grew by 15.7% to $31.4 billion in the five years between 2017 and 2022. Despite facing coronavirus-related challenges in between, its adjusted earnings during the same five years period saw a 30% increase to $8.50 per share.

Besides its strong financials, Scotiabank’s geographically diversified exposure, key focus on digital banking, and consistently increasing market share in strategically key markets make its stock worth considering for dividend income.

BCE stock

BCE (TSX:BCE) could be another great addition to your retirement portfolio, especially if you’re looking for safe stocks to create a source of passive income. The Canadian communications giant currently has a $55.2 billion market cap as its stock trades at $61.08 per share after gaining 2.7% year to date. At the current market price, the stock offers a 6.3% annualized dividend yield.

Some of the key factors that make BCE stock safe are its large scale and well-diversified revenue streams, including product segments like wireline broadband and TV, wireline voice, wireless, and media. The largest Canadian communications company also has a strong financial position that helps it generate sustainable returns for its loyal investors. Besides that, its great track record of increasing dividends makes it stand out. Notably, BCE raised its dividend per share by 28% in the five years between 2017 and 2022.

As BCE continues to strengthen its 5G footprints across Canada, you can expect its financial growth to improve further, which should help its financial growth advance further in the coming years and its share prices rise.

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.

The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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