Many Canadians used the COVID-19 pandemic as a platform to vault into an earlier-than-expected retirement. Late 2020 and most of 2021 turned out to be a terrific time to liquidate inflated assets. Now, retirees and those gunning for retirement alike are wrestling with higher interest rates and a housing market under strain. Canadian investors looking to bolster their retirement plans should look to utilize the Tax-Free Savings Account (TFSA) in addition to a Registered Retirement Savings Plan (RRSP). Today, I want to target three stocks that offer a great balance of income and growth for your TFSA.
This top energy stock is worth holding in your TFSA for the long term
Suncor Energy (TSX:SU) is a Calgary-based integrated energy company that operates in Canada and around the world. Shares of this energy stock have increased 2.1% month over month as of early afternoon trading on June 9. Suncor stock is still down 1.7% so far in 2023. Investors who want to see more of its recent performance can play with the interactive price chart below.
This company released its first quarter fiscal 2023 earnings on May 8. Suncor delivered adjusted funds from operations (AFFO) of $3 billion, or $2.26 per common share – down from $4.1 billion, or $2.86 per common share, in Q1 2022. Total Oil Sands production was reported at 675,100 bbls/d compared to 685,700 bbls/d in the previous year.
Shares of this energy stock currently possess a very favourable price-to-earnings ratio of 6.8. TFSA investors should also be attracted to its quarterly dividend of $0.52 per share. That represents a strong 5.1% yield. Suncor is perfect for retirement as it offers exposure to the longstanding oil sands business and boasts a strong track record of dividend growth.
Here’s a top telecom that can help secure your retirement future
Telus (TSX:T) is a Vancouver-based company that provides a range of telecommunications and information technology products and services in Canada. Its shares have dropped 8% month over month at the time of this writing. That has pushed this telecom stock into negative territory so far in 2023. Telus offers dependability and a solid dividend history.
In the first quarter of fiscal 2023, Telus reported record first-quarter fixed customer net additions of 58,000. Operating revenues increased 15% year over year to $4.9 billion. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 10% year over year to $1.8 billion.
This stock last had a solid P/E ratio of 24. TFSA investors and retirees alike can rely on its quarterly distribution of $0.364 per share, which represents a very strong 5.7% yield.
One more top stock I’d own in my TFSA to achieve a comfortable retirement
Fortis (TSX:FTS) is the third dividend stock I’d suggest we stash in our hypothetical TFSA to prepare for retirement. This St. John’s-based utility holding company is highly stable and dependable. Its shares have increased 3.7% so far in 2023.
In Q1 2023, Fortis reported adjusted net earnings of $0.91 – up from $0.78 in the first quarter of fiscal 2022. Canadians saving for retirement should be thrilled with Fortis’ $22.3 billion five-year capital plan. That plan is expected to increase Fortis’ midyear rate base from $34 billion in 2022 to $46 billion by 2027. This, in turn, is projected to support dividend-growth guidance of 4% to 6% through to the end of 2027.
Fortis has delivered 49 straight years of dividend growth. One more dividend hike will make Fortis the second dividend king on the TSX. It currently offers a quarterly distribution of $0.565 per share, representing a 3.9% yield.